Piece rate

... Piece rate can be defined as a fixed rate of pay for a particular amount of work done. Piece rate pay gives a payment for each item produced; it is therefore the easiest way for a business to ensure that employees are paid for the amount of work they do. Piece rate pay is also sometimes referred to as a "payment by results system". Piece rate have been the focus of several important theoretical studies, nearly all of which concentrated on the implications of piece rate use for incentives, productivity and labour costs. These studies suggested that a piece rate is used mainly to increase workers' incentives and to eliminate the uncertainty about workers' efforts that employers face when paying a wage. Under this method in contrast to time wage the performance of the worker is measured at frequent intervals and he or she is paid accordingly. This worker thus

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