Piece work
Piece work or piecework is any type of
Context
When paying a worker, employers can use various methods and combinations of methods.[2] Some of the most prevalent methods are: wage by the hour (known as "time work"); annual salary; salary plus commission (common in sales jobs); base salary or hourly wages plus gratuities (common in service industries); salary plus a possible bonus (used for some managerial or executive positions); salary plus stock options (used for some executives and in start-ups and some high tech firms); salary pool systems; gainsharing (also known as "profit sharing"); paid by the piece – the number of things they make, or tasks they complete (known as ‘output work’); or paid in other ways (known as ‘unmeasured work’[a]).[4]
Some industries where piece rate pay jobs are common are agricultural work, cable installation, call centers, writing, editing, translation, truck driving, data entry, carpet cleaning, craftwork, garment production, and manufacturing.[5] Working for a piece rate does not mean that employers are exempt from paying minimum wage or overtime requirements, which vary among nations and states.[6]
Employers may find it in their interest to use piece rate pay after examining three theoretical considerations; the cost and viability of monitoring output in a way that accurately measures production so that quality doesn't decrease is first. Variable skill level is second, where piece rates are more effective in a more homogenous workforce. Thirdly, there may be more invasive managerial relations as management attempts to test how fast the workers can produce.[7]
Employees decide whether to work for piece rate pay if the relative earnings are high, and if other physical and psychological conditions are favorable. Some of these might be job stress, physicality, risks, degree of supervision and ability to work with peers or family members.[7] Employees may also be more or less welcoming to performance pay depending on the leverage and risk. Leverage was defined as ratio of variable pay to base pay, and risk is the probability the employee will see increased benefits with effort. Workers tended to be suspicious of pay packages that were too heavy on variable pay and were concerned it might be a concession to remove cost-of living wage adjustments or to secure wage rollbacks.[8]
Establishing a fair rate
Under UK law, piece workers must be paid either at least the minimum wage for every hour worked or on the basis of a ‘fair rate’ for each task or piece of work they do. Output work can only be used in limited situations when the employer doesn't know which hours the worker does (e.g. some home workers). If an employer sets the working hours and the workers have to clock in and out, this counts as time work, not as output work.
The fair rate is the amount that allows an average worker to be paid the minimum wage per hour if they work at an average rate. This must be calculated in a set way, a control trial is run to determine the average items produced by equivalent workers, this is divided by 1.2 to reach the agreed average figure, and the fair rate is set to ensure each worker achieves the minimum wage.[9][b]
There are several software programs that determine the time that a trained operator should take to perform an operation. These make unit estimations based on the individual motions that an operator is required to make to complete a task. In a service setting, the output of piece work can be measured by the number of operations completed, as when a
History
Guild system
As a term and as a common form of labor, 'piece work' had its origins in the
Industrial Revolution
Piece work took on new importance with the advent of machine tools, such as the machine
Criticism
In the mid-19th century, the practice of distributing garment assembly among lower-skilled and lower-paid workers came to be known in Britain as the
There can be improper record keeping at the hands of supervisors attempting to cheat employees, to build piece rate systems that prevent workers from earning higher wages. That is often at the cost of both the worker and the enterprise, however, as the quality and the sustainability of the business will be threatened by decreases in quality or productivity of workers attempting to stay afloat. Put another way, if the payment for producing a well-made item is not enough to support a worker, workers will need to work faster, produce more items per hour, and sacrifice quality.[11]
Today, piece work and sweatshops remain closely linked conceptually even though each has continued to develop separately.[citation needed] The label "sweatshop" now refers more to long hours, poor working conditions, and low pay even if they pay an hourly or daily wage labour, instead of a piece rate.[citation needed]
Minimum wage
In the United States, the
Advantages of Piece Rate Pay:
Incentivizes Productivity: Piece rate pay encourages workers to increase their output as they directly benefit from producing more.
Flexibility: Piece rate pay can offer flexibility to workers as they can often choose their own hours and work at their own pace, especially in jobs such as freelance writing or data entry.
Potential for Higher Earnings: Skilled workers who are efficient in their tasks can potentially earn more through piece rate pay than through traditional hourly wages.
Disadvantages of Piece Rate Pay:
Quality Concerns: Workers may sacrifice quality for quantity to maximize their earnings, leading to potential issues with the quality of goods or services produced.
Risk of Exploitation: Some employers may set piece rates unfairly low, leading to workers being underpaid for their labor, especially in industries with low barriers to entry.
Lack of Stability: Piece rate pay may not provide a stable income, as earnings can fluctuate based on factors such as demand for the product or service and individual productivity levels.
See also
References
Footnotes
- ^ Paid in other ways (unmeasured work):If the work isn’t covered by any of the other types of work, it’s ‘unmeasured work’. Unmeasured work includes being paid a set amount to do a particular task, e.g. being paid £500 to lay a patio, regardless of how long it takes. To work out the minimum wage for unmeasured work, either every hour worked must be recorded to make sure the worker gets the minimum wage, a ‘daily average agreement of hours’ is agreed.[3]
- ^ Example: Workers are paid for each shirt they make. They can produce on average 12 shirts per hour. This number is divided by 1.2 to make 10. Andy is 21 and is eligible for the minimum wage rate of £6.19. This means he must be paid at least 62p per shirt he makes (£6.19 divided by 10, rounded up).[9]
Citations
- ^ "The piece work principle in agriculture". Journal of the Statistical Society of London. 28: 29–31. 1865.
- doi:10.5465/3069283 (inactive 2024-03-21).)
{{cite journal}}
: CS1 maint: DOI inactive as of March 2024 (link - ^ "Minimum wage for different types of work". HMG :Published under Open Government licence. 2013. Retrieved 8 June 2013.
{{cite web}}
: External link in
(help)|publisher=
- ^ "Minimum wage for different types of work". HMG :Published under Open Government licence. 2013. Retrieved 8 June 2013.
{{cite web}}
: External link in
(help)|publisher=
- S2CID 155306839.
- ^ "Piece Rate Pay System law & Legal Definition" http://definitions.uslegal.com/p/piece-rate-pay-system//
- ^ JSTOR 1243991.
- S2CID 154852551.
- ^ a b "Paid per task or piece of work done". HMG :Published under Open Government licence. 2013. Retrieved 8 June 2013.
{{cite web}}
: External link in
(help)|publisher=
- ^ J.C. Spender. (2006). "Frederick W. Taylor and John R. Commons: Two Views of Scientific Management". http://www.jcspender.com/uploads/Taylor___Commons_n29.pdf
- ^ Gregorio Billikopf "Designing an Effective Piece Rate". Agricultural Labor Management, University of California. http://nature.berkeley.edu/ucce50/ag-labor/7research/7calag06.htm
- ^ Colacicco, Linda. "Key Things Every Farmer Should Know About Piecework Pay". Abacus Payroll. Retrieved 21 April 2015.
- ^ "Fact Sheet #12: Agricultural Employers Under the Fair Labor Standards Act (FLSA)". US Department of Labor. Retrieved 21 April 2015.
Bibliography
- Chapman, Sydney J (1904). The Lancashire Cotton Industry- A Study in Economic Development (Reprints of Economic Classics- 1973 Augustus M Kelley ed.). Manchester: At the University Press. pp. 309. ISBN 0-678-00896-5.
External links
- Piece rate pay design - University of California