merrick differential peice rate plan..(piece wage plan)

I kulmit singh of guru nanak khalsa college, matunga, mumbai, is uploding this Ppt for my friends in need....

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2. Class: FY BAF SUBJECT : Cost accounting Chapter : labour costing 2

3. Group members: Kulmit singh banged - (4) Kiranjeet kaur gahunia - (15) Satnam singh saini - (46) 3

4. Merrick’s Differential piece rate plan Topic: 4

5. Differential piece rate plans are as follows…. 5

6. Content : Meaning Rates applied Advantages Disadvantages Conclusion 6

7. Content : Meaning Rates applied Advantages Disadvantages conclusion 7

8. Here is an example with a video….. What actually piece rate is ….? 8

9. Merrick Differential piece rate system 9 This system made by Mr. Merrick, is a modification of Taylor’s differential piece rate system. Under Taylor’s differential piece rate system, workers by whom 100% efficiency cannot be attained are penalized, whereas under Merrick system, there is no imposition of such punitive lower rate upon them; whereas, those by whom certain percentage or more, of efficiency can be achieved, are rewarded by higher differential rates. 

10. 10 It is an output based system

11. Content : Meaning Rates applied Advantages Disadvantages conclusion rates Applied 11

12. Up to 83% efficiency               Normal rate is applicable  Between 83% & 100% of efficiency         of normal rate is allowed  Above 100% efficiency        of normal rate is allowed  Rates applied are as follows : 110% 120% 12

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14. 14 A produced…. B produced…. C produced….. D produced….. The piece rate and Standard output are Level of performance can Be calculated by So level of performance of A , B , C , D are….. For example….

15. Rates applied are as follows A’s level is Which is less than 1oo% But more than 83% So here rate applied will be… That is…. And so A’s earning is…. Now B’s level is… Which is more than 100% So rate applied will be… Which is… And thus B’s earning is… C’s level is only… Which is even less than 83% Therefore normal piece rate Will be applied here… D’s level is more than 100% So same rate of B will be applied here… 15 So C will earn … And thus D will earn …

16. Content : Meaning Rates applied Advantages Disadvantages conclusion 16

17. Advantages of merrick’s piece rate system: 1.  There is a direct connection between  effort and reward .   Efficient workers are paid according to their performance  and hence a sense of competition is created among workers. 17

18. 2.  There is a direct incentive to work  . 3.  decreased cost of production  specially overhead cost per unit. 18 Advantages of merrick’s piece rate system:

19. 4. Since the  cost per unit is fixed  computation of labour costs of production in advance is possible.   5. Worker assumes the  responsibility of his time and output  so there is considerable scope of   reduction in managerial cost.   6. Since the  payment is linked with results  the idle time  costs  are reduced to minimum. 19 Advantages of merrick’s piece rate system:

20. Other reason why differential piece rate is better than time rate…. 20

21. Content : Meaning Rates applied Advantages Disadvantages conclusion 21

22. 1. Setting of piece rates or standard hours involves lot of difficulties   It is difficult to establish fair standard- If high standard or rates are established, it Is very difficult to reduce them subsequently. 2.   Quality of work  is another casualty of this system. Since the payment   is made on the basis of output, every  worker  tempts to produce more and more irrespective of quality  of product. 3.  For the maintenance of quality of standards a rigid system of supervision and inspection is necessary . 22 There are certain disadvantages of piece rate system:

23. 4.  The  workers tend to work for longer hours in temptation to earn more  This leads to excessive fatigue, ill-health and risk of accident. 5.  There is always danger to the flow of production and regularity of  minimum wage  to the workers. 6.  uniform rate is paid regardless of quality and quantity of work . There is no special incentive for exceptionally   good workmanship and expertise. 23 There are certain disadvantages of piece rate system:

24. Content : Meaning Rates applied Advantages Disadvantages Conclusion 24

25. 25 Other differential piece rate plans are…….

26. Minimum wage level in India and China 26

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