Piece-rate wage system and its varieties. How is the piece rate determined? Negative aspects of the system

- This is a payment method in which the amount of earnings of each hired employee is directly dependent on the amount of work performed. This takes into account the complexity of production, the working conditions provided, and also, of course, the quality of each unit produced. In other words, this method of payment can be characterized as the most effective and rational combination of interests of both the employee and the employer. The piecework form of remuneration has a fairly clearly defined focus. The presented payment method is often used when it is necessary to improve the quantitative indicators of product output.

Let's look at the varieties available today. The following main categories are distinguished:

This is one of the simplest types. Its essence lies in the fact that the amount of earnings is calculated depending only on the volume of production and the qualifications assigned to the employee. Unfortunately, this particular payment method cannot interest an employee and stimulate him to improve both overall performance and quality results.

2. Piece-progressive type of payments

This concept implies two tariffs at which wages are calculated. The first applies to the production of products within certain standards. All units produced in excess of the existing limits are paid at an increased rate. However, this piecework form of remuneration has some peculiarities. For example, the earnings of each individual employee may increase faster than overall productivity. Consequently, it will be more rational to use such a system in cases where it is necessary to produce a large volume of products in a short time.

3. Piece-premium form

It is similar in structure to the first type, but also includes various bonuses that are paid to employees for improved qualitative and quantitative indicators, as well as for exceeding production standards.

4. Indirect piecework form of remuneration

Used to reward workers for maintaining equipment. The calculation and accrual of earnings for such employees is carried out depending on the results achieved by the piece workers they serve.

5. Lending form of payments

It implies rewarding labor for completing a specified amount of work. In this case, accruals can be made to several persons. The amount of money that is distributed accordingly among employees is calculated by taking into account how long each team member worked. This method of payment is widely used in cases where labor cannot be standardized. Common examples include construction, repair work, etc.

Remuneration is a financial system that regulates monetary relations between employer and employee. According to established legislation, payments must be made on time and in the prescribed amount. Article 129 of the Labor Code of the Russian Federation contains basic information about the rules for making payments.

Tariffs and wages are regulated by various legal acts and agreements. In controversial situations, federal legislation is recognized as dominant and decisions are made in accordance with it. For example, instructions for calculating the tariff rate are contained in Art. 143 Labor Code of the Russian Federation.

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Piece wages

Piece wages – This is one of the types of wages, which involves the dependence of the amount of money on the quantity or volume of work delivered.

The volume of work delivered may be calculated in terms of the number of units produced, the number of tasks completed, or some other measurement. This takes into account the quality of work, the complexity of the task, working conditions and the required level of qualifications.

Advantages of piecework payment

From the employer's side:

• The employee's interest in performing the maximum amount of work.
• The employee is also responsible for fluctuations in output.
• There is no need to control the work process, since payment is made after the fact and before that it is possible to assess the volume of work and its quality.
• It is believed that if an employee is ready for piecework payment, he knows how to work productively.

From the employee's side:

• Has the opportunity to independently control your earnings and increase it by increasing the volume of work.
• Work on a piecework basis is available even to novice specialists and workers without a reputation.

Disadvantages of piecework wages

From the employer's side:

• Possible reduction in product quality to increase production volumes.
• Often the costs of product quality control are equal to the total costs of control in other production areas.
• Often, workers are in a hurry and violate safety regulations or rules for handling equipment, which leads to injuries and breakdowns.
• Workers don't care much about production costs.
• Psychological factor - the employee does not feel like he belongs to the company’s team and does not work for a common result, but only for his own enrichment.
• Some types of work are quite difficult to measure in all respects; accordingly, difficulties arise in determining the volume of work performed.
• High staff turnover, which stems from a psychological factor, rarely employees are focused on the prospect of long-term cooperation.
• The need to introduce any compensating payments to smooth out possible fluctuations in earnings.

From the employee's side:

• Earnings are unstable, this fact frightens many workers who do not like risks.
• The employer is not always able to take into account all the factors that influence the result, but often do not depend on the employee.
• The rate of wages may be lowered as output increases, so that the amount of work is not directly proportional to the amount of earnings.

Types of piecework payment

Payment at piece rates is divided into:

1. Direct piecework. It provides a direct relationship between the volumes completed and the amount of earnings. The prices (rate) are fixed, depending mostly on the specifics of the work, its conditions and the qualifications of the employee.

   It is worth noting that when using this type of payment, the employee is least interested in the company’s production growth and improving overall performance indicators. So this type of payment is more suitable for hiring temporary workers.

2. Piece-bonus. In essence, this is the same as direct piece payment, however, it implies the presence of incentive payments for work above the plan or for the high quality of the product produced.
3. Indirect piecework. It helps calculate wages for maintenance personnel involved in maintaining equipment or working places. It is quite difficult to determine the volume and quality of work performed. To calculate wages, you need to divide the rate by the production rate of workers using the equipment being serviced. Bonuses under such a system are usually awarded for trouble-free operation of equipment.
4. Chord. Such a system is designed to complete work with a limited time frame. Then the worker knows the price for the entire volume and knows in what period of time he needs to complete the work. If the task takes a long time to complete, an advance is paid. It is a common practice to pay bonuses for completing work ahead of schedule. It is used mainly in those areas where it is difficult to standardize labor in any other way: during repairs, construction.
5. Piece-progressive. Such a system involves paying for production norms at standard prices, and after exceeding the plan, prices increase. Typically, increased prices do not exceed standard prices by more than 100%. Typically, a progressive piece-rate system is introduced for a certain period of time in those areas of production where maximum performance is required. This payment method is quite expensive for the employer.

How is piecework wages calculated?

When making calculations, a system of fixed prices per unit of production or fulfillment of an agreed volume is usually used. This approach allows you to take into account the maximum number of factors and set a stable price for labor.

Prices directly depend on temporary production standards, tariffs and type of work. To calculate the final price, divide the hourly rate (or daily or standardized) by the production rate for the same period of time. Payments can occur either individually or to a group of workers.

With a direct piece-rate wage system, calculate wages using the formula: Wages = Piece rate per unit of product (type of work) x Number of manufactured products (work performed)

Piece work and time work: what is the difference?

In fact, piecework and time-based payment are polar approaches to remuneration and, accordingly, to its evaluation.
Time-based pay assumes that the employee spends his time in the most efficient way. The employer hopes that the result of the employee’s work will be more valuable than the time purchased.

When using piecework payment, time spent is not recorded. Often, the employer does not know how many hours it took to produce the product and has difficulty determining its cost. The employee bears all responsibility for the effective use of time, and bears the costs associated with irrational time management. Often, workers themselves set piece rates for their work.

Types of remuneration

At the moment, the legislation provides for several types of remuneration:

1. Main. It consists of:
   • payment for a specified period of time, payment for a specified amount of labor, subject to the calculation of payments according to the piecework system, as well as time-based or progressive payment;
   • overtime payments for work longer than the established period, for night work, for any work performed in excess of the norm specified in the contract;
   • payments for production downtime that occurred due to reasons beyond the employee’s control;
   • bonus payments, as well as incentives and incentives.
2. Additional. It consists of:
   • payment for time not worked for reasons beyond the employee’s control in cases where such a possibility is provided for in the contract and legislation;
   • vacation deductions;
   • payments to employees on maternity leave and nursing mothers;
   • teen benefits;

In addition to species, classification by form is also used. These include:

Time payment is based on the amount of time which the employee spent at work. Usually the contract specifies the number of working hours.

Time payment may include:

• hourly pay;
• tariffs (daily or hourly);
• a certain norm established by agreement and helping to make a different measurement of time worked.

Time payment consists of:

• simple– assumes that the worker is paid for a certain amount of time that he spent on the work process, regardless of how many and what kind of labor products were produced;
• premium– assumes that in addition to payments based on time worked, bonuses are provided for high quality work.

Piecework payment is divided into several subtypes. Read more about each type of payment below.

Legal norms

Guarantees for timely and complete transfer of payments are established by Article 130 of the Labor Code of the Russian Federation.

According to the law, the state provides guarantees for:

• minimum wage level;
• control of the level of salaries of employees of budgetary institutions;
• regulation of the amount of tax deductions for wages;
• introducing restrictions on wages in kind;
• regulation of federal legislation in accordance with the interests of workers;
• exercising state control over the fulfillment of labor remuneration obligations;
• holding unscrupulous employers accountable;
• establishing rules regarding the timing and order of payments;
• control over the implementation of legislation.

One of the categories of the established wage system is piecework. Its main essence is to take into account the labor costs of the employee himself, which can be expressed, for example, in the number of units of manufactured products, services provided for a certain period, etc.

This system is practiced by many employers, most often in factories, as well as in other organizations involved in the manufacture of certain products. In addition, it can often be found in construction companies.

Important Features

The piecework system appeared quite a long time ago, and is still successfully used in a wide variety of enterprises. However, it will be truly effective if the head of the organization has a full opportunity to regularly record the achievements of all employees. Actual labor costs are determined based on the following indicators:

• current production standards in the organization for a certain period - for example, per hour or full shift;
• exact duration of the working day;
• other available tasks that employees must perform.

The final amount of piecework wages may be influenced by various additional factors, for example, the level of complexity of production tasks, the presence of special working conditions, etc.

Main pros and cons

The piecework system has an undoubted advantage - in this way the employer can encourage employees to work faster and complete all assigned tasks. But this also entails a minus: with such a system, the quality of the product itself often suffers, because all the employee’s goals are aimed at achieving a certain number of performance results.

If the enterprise does not have the opportunity to increase production standards, the use of a piece-rate wage system is unlikely to be appropriate and can bring positive results.

All provisions regarding the piecework system must be spelled out in the employment contract or in a separate provision. It indicates the tariffs in force within the organization, daily production standards, as well as other conditions related to the procedure for calculating wages.

Subtypes of the piecework system

There are quite a lot of subspecies in the piecework system, let’s consider the main ones:

Simple

Such a system can be installed within organizations in which it is quite easy to keep regular records of the output of each employee. The principle here is as simple as possible: an individual approach is applied to each employee, the higher his productivity indicators, the greater the regular income.

The calculation will also consist of a simple formula:

T(s) x K, where: T (c) is the tariff in force within the organization for one manufactured unit of product or, for example, for one service provided, K is the number of services or manufactured products.

Let's look at an example:

A post office specialist processed 650 parcels in one working month. The organization has a constant tariff for parcels - 50 rubles per 1 piece. Accordingly, the amount of his piecework salary will be: 650x50=32,500 rubles.

Piece-bonus system

Its main difference is that if results are achieved that exceed the original plan or norm, the employee receives an appropriate bonus. Moreover, its size can be either fixed or expressed as a certain percentage of the total amount of the regular salary.

In this case, the formula used for calculations will look like this:

NW+W, where: SZ is the amount of regular earnings in accordance with the tariffs in force within the organization, Z is the amount of the bonus for exceeding established standards.

Let's look at an example:

Engineer Ivanov works at the plant on a piece-rate wage system, which also involves paying bonuses to employees. The premium amount is fixed - 5,000 rubles. Over the past month, he exceeded the plan for manufactured parts by 100 pieces. The amount of his salary for a given month, based on individual production indicators, amounted to 30,000 rubles. Thus: 30,000+5000 =35,000 rubles - salary amount.

Piece-progressive

This system involves a constant increase or decrease in wages in accordance with the dynamics of each employee’s performance in relation to the work performed by him. For example, if by a certain date of the month an employee shows clear progress, his wage rates will also increase.

The formula for calculations will look like this:

SZ(pss)+SZ(psr), where: SZ(psr) is the amount of earnings in accordance with the current piecework system, SZ(psr) is the amount of wages in accordance with progressive performance indicators.

Turner Petrov works at a factory where there are not only fixed bonuses for exceeding work standards, but also additional bonus payments. Over the past month, Petrov produced 600 parts against the current norm of 400. In addition, he earned additional bonuses in the amount of 4,000 and 2,000 rubles. In this case, the total salary will be: 600x50 (price for one part) = 30,000 rubles - the amount of earnings in accordance with the current wage system without bonuses.

30,000 + 4000 + 2000 = 36,000 rubles.

Indirect piecework system

The very name of this system suggests that it is designed for support workers whose salary is directly dependent on the performance of another person assigned to the role of manager. In this case, the calculation formula will look like this:

T(kd.sd.) x OR, where T(kd.sd.) is the tariff in force within the organization for indirect work, OR is the exact amount of work of the auxiliary facility.

Let's look at an example:

At the plant, turner Petrov is assisted by loader Andreev, who delivers manufactured parts to cars approaching the plant. An individual tariff has been established for Andreev - 35 rubles for loading one part. In the last month, the turner produced 500 of these parts. Therefore, Andreev’s salary will be equal to: 500 x 35 = 17,500 rubles.

Chord

This system involves the signing of a special agreement between the employer and his employee regarding the timing of certain work, as well as the procedure for calculating payment for the completed norm. All these provisions must be drawn up in the form of a separate document, which is presented to one employee or the entire team before any work begins. Each employee must carefully read the provisions of the contract and then sign it. In this case, the calculation formula will look like this:

SZ(sd) + P(ak), where: SZ(sd) is a fixed amount of earnings if the employee successfully completes the full amount of work within the established time frame, P(ak) is the bonus that will be paid to the employee if he completely completes the work before the established deadlines.

Let's look at an example:

The builder Vasiliev received from the manager an agreement to carry out reconstruction work on the premises within the next 5 days. The total payment for construction work is 10,000 rubles. At the same time, the manager indicated that, in case of early completion of work by more than one day, he would pay a bonus in the amount of 3,000 rubles. Vasiliev completed all the necessary work in 4 days.

In this case, his salary will be: 10,000 + 3,000 = 13,000 rubles.

As can be seen from the above, the piecework wage system in some cases can indeed be very convenient. It is this that allows you to evaluate the employee’s work as accurately as possible and thank him for exceeding the established indicators. In addition, the piecework system has many varieties, so each employer can choose exactly the option that suits him completely.

However, it should also be remembered that in certain cases it is better not to give preference to the piecework wage system. First of all, it will not be suitable if the enterprise does not have a clear system for recording the performance indicators of each employee. In this case, the employer will certainly have difficulties with correct calculations, which ultimately can lead to numerous claims from employees and even legal disputes.

Piecework salary is a clear and very profitable option for the relationship between the employee and the enterprise. And for the employer one of the best staff motivation tools. Our article will tell you what this concept means, what the advantage of this scheme is and what types of piecework payment there are.

When there is no permanent salary, is this a piecework form of payment or not?

Piece systemwages always presupposes the existence of a relationship fixed in the labor/collective agreement between the volume of products produced by the employee or work performed and the amount of his wages. In other words, if your wages are calculated in proportion to the products produced - this is a piecework salary.

Its fundamental differences are the presence of production standards per unit of time (or staffing unit) and piece rates per unit of output. Wages are determined as the quantity of products produced multiplied by the unit price.

Throughout the world, this remuneration system is recognized as one of the most flexible tools for motivating staff. Besides, piecework wages are a way to reduce an enterprise’s labor costs if its activities are seasonal.

Along with ease of calculation piecework wages (this is and a calculation that is understandable for the employee, and ease of checking the correctness of the accrued payment), the piecework wage system offers several types of accrual. All of them are based on taking into account the results of the employee’s work and differ from each other only in that they offer options for implementing this system in various situations.

Types of piecework payment systems (piecework-bonus, piecework-progressive, piecework

There are many different types of piecework wages. Previously, we looked at the simplest option: when you can easily measure the volume of products or work produced by one employee (individual norms and prices) or a team (collective norms and prices). This is piecework wages with direct prices.

But there are also indirect prices and an indirect piecework wage system. This labor system is established for workers involved in the production process, but not directly involved in the creation of products. These could be, for example, technicians or workers involved in the repair of work equipment, that is, those on whose work the volume of production depends, but not directly.

Both direct and indirect piecework wage systems may involve bonuses for workers producing products for exceeding production standards or plans. This is a piece-rate wage system.. To the benefits piecework wages this condition adds a vested interest in increasing output beyond the norm.

The piece-rate system is another option for stimulating workers to increase productivity. For those products that are produced within the established standards, the established price is applied, and for products produced in excess of the standards, an increased price is applied.

The lump sum system of remuneration also refers to piecework, however, it does not have standards and unit prices: payment is established for a certain amount of work, after completing which the employee will receive payment.

Thus, there are quite a lot of types of piecework wages, and the payment received by workers for any of them is this is piecework wages.

Hello! In this article we will talk about piecework wages.

Today you will learn:

1. What is piecework wages and where is it applied?
2. What types of piecework wages exist;
3. What are the prerequisites for transferring to piecework wages;
4. Advantages and disadvantages of this type of payment.

One of the most important aspects of organizing work activities in a company is the choice of the form of monetary remuneration for employees. We are most familiar with the time-based form, when salaries are calculated depending on the salary and the number of days worked. However, such a scheme is not suitable for many types of activities where it is extremely important for the employer to motivate the employee to increase productivity, and also where it is possible to keep quantitative records of the work performed. Then another common form is used – piecework wages.

What is piecework wages?

Piece wages – This is a type of monetary remuneration for an employee where his earnings directly depend on the units of production he produces or on the volume of work performed, provided that the result of his work can be calculated and the quality can be tracked.

• Download a sample piecework wage agreement

For most types of work, only one of two forms of payment is possible. For example, administrators, doctors, accountants, security guards, and teachers are on temporary duty. Piecework wages are typical for such professions as turner, welder, taxi driver, and member of a repair team.

However, there are often cases when, to further motivate an employee, an employer uses a calculation procedure that is characteristic of both forms. The employee is paid a monthly fixed salary, most often small but guaranteed, so that the employee has something to live on in case of the “off season”. In addition, the employee receives payment per unit produced or a percentage of sales.

Example. In many clothing or electronics stores, where sales volumes largely depend on the active work of the sales assistant, the company, in addition to the salary, may pay him a certain percentage of the cost of the goods sold. Owners have long come to the conclusion that using the carrot of a monetary reward is much more effective than threatening them with the stick of dismissal for being idle on the sales floor.

Concepts inextricably linked with the word “piecework”

Production rate - the number of units of products established by the company that must be manufactured within a certain time frame. Usually they talk about hourly, daily and monthly norms.

Tariff rate (salary) – minimum guaranteed monthly wage for a given skill level. Indicated in . The salary is only part of the salary, which, in addition to the salary, may include all kinds of bonuses and social benefits.

Price - this is the amount of earnings for one unit of work performed or products produced. It is calculated through the ratio of the tariff rate to the production rate.

Tariff schedule - tariffication of wages based on the complexity of the work and the qualifications of the employee. There are ranks or categories (for example, engineer of the first category or piece worker of the 5th category).

Calculation of piecework wages

Let us give two examples of such calculations.

Example 1. The daily rate of processing parts on a milling machine for a milling machine operator is 120 pieces. The daily rate for the tariff is 1200 rubles. In one month, the employee processed 2,400 parts.

The piece rate is calculated by dividing the daily tariff rate by the daily rate for parts:

R = 1200/120 = 10 rubles/pcs.

In this case, the monthly salary of the master will be:

Z = 10*2400 = 24000 rub.

Example 2. The calculation looks somewhat different when the standard determines not the number of products, but the time period.

The time limit for using the machine is set at 30 minutes per operation. The hourly tariff rate is 150 rubles. During the month, the employee performed 600 operations.

We calculate the piece rate:

R = 150*30/60 = 75 rubles/operation

Monthly earnings will be:

Z = 75*600=45000 rub.

Types of piecework wages for workers

The existence of several types of this payment is explained by the diverse specifics of existing work where piecework payment is used.

Let's look at its main types with examples:

The procedure for transferring to piecework wages

An enterprise can switch to piecework wages if the necessary prerequisites are met:

• Well-established accounting of manufactured products or services provided;
• Presence of an uninterrupted supply of materials and everything necessary for work;
• Effective quality tracking;
• Developed logical tariff systems and local standards;
• The ability to take into account quantitative data on the performance of each employee separately;
• The existing need at this level of company development is to increase the level of production (sales) many times over.

The conditions for piecework wages are specified in individual and collective labor contracts, work acceptance certificates, work orders, as well as in the Regulations on remuneration. The latter is understood as a normative act that is valid only within the enterprise, which stipulates the procedure for calculating wages, the timing of payment of remuneration to employees, the rules for paying bonuses and allowances.

When approving such a document, the employer proceeds from the financial capabilities of his organization and also takes into account the norms of the Labor Code.

All important information should be specified in the Employment Contract, preferably in as much detail as possible.

Advantages and disadvantages of piecework wages

If an employer transfers his workers to piecework, he must be prepared for some difficulties. However, the advantages of this form are also undeniable.

Let's look at them:

There is no ready answer as to what form of wages or what type of piecework will be best. Everything is very individual and, above all, depends on the type and conditions of the organization’s activities. The same system can work differently in two teams. It seems to us that only with experience, through trial and error, will the employer be able to develop the necessary scheme of monetary motivation for his employees.