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Unit 7: Remuneration and Incentives
workers. Non-monetary plans may be entirely free by the industry or organisation. They Notes
are wide in number and may include:
z Canteen-free or subsidized basis,
z Entertainment facilities,
z Health and safety facilities,
z Club facilities,
z Housing facilities,
z Educational and training facilities, and
z pension, provident fund schemes facilities.
Comparison of Halsey and Rowan’s plan:
points of Similarity:
(a) The time rate is guaranteed in both the schemes.
(b) In both the schemes, the standard time for completing a job or operation is fixed.
(c) Bonus is dependent upon the time saved out of the allowed standard time.
(d) The benefits of saving in time are allowed to both the employer & employee.
(e) Higher output & lower rate of fixed overhead per unit is provided by both the schemes.
(f) When the worker takes ½ of the time allowed to finish the job, bonus hours in that case are
same in both the schemes.
points of Dissimilarity:
(a) If the time saved is less than ½ of the time allowed, better bonus is provided by the Rowan
scheme than the Halsey scheme. On the other hand, if the time saved is more than ½ of the
time allowed, the Halsey scheme provides better bonus than the Rowan scheme.
(b) The bonus hours, under the Halsey scheme, are equal to 50% of the time saved by the
workers, whereas, under the Rowan scheme, the bonus hours are that proportion of time
taken as the time saved bears to the time allowed.
(c) Under the Halsey scheme, more the time saved more will be the bonus; which is not true,
under the Rowan scheme, if more than ½ of the time allowed is saved by the worker.
Example: The time allowed for a completing a job is 24 hours. The hourly rate is $. 4. For
every 4 hours saved progressively, prepare a statement showing the bonus earned, earnings per
hour & total earnings under Halsey system (50% to worker) & Rowan system of premium bonus
& comment on comparative findings in the two systems.
Solution: Bonus under Halsey Scheme=1/2*(Time saved * Time rate)
Bonus under Rowan Scheme= (Time saved/Time allowed) * Time taken * Time rate
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