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Explain Halsey Premium Plan with its merits and demerits
Posts: 3,310
Threads: 505
Joined: Sep 2010
A mechanical engineer F.A. Halsey devised this plan. It is a simple combination of the time-speed basis of payment. The worker gets his wages for the time he works. For the calculation of premium, a standard time is fixed for each job on the basis of past performances. If the worker finishes the job before this standard fixed time, he gets bonus for the time saved by him.
The rate of bonus is 30% to 50% of the wage payable for the time saved. Suppose a worker gets his wages @ 60 paise per hour. He finishes his work in 15 hours for standard time fixed is 20 hours. Thus he saves 5 hours. He will get a total wage of Rs. 10.50. This is worked out as below :
Wage for 15 hours @ 60 paise = Rs. 9.00
Wages for 5 hours (the time saved) @ 50% of the usual hourly rate = Rs. 1.50
9+1.5= Rs. 10.50
He will get Rs. 10.50 and will also earn something more by utilising the time saved i.e., 5 hours.
Merits
The chief merits of this plan are:
(1) Slow workers are guaranteed a fixed time wage.
(2) Efficient workers get extra wage.
(3) It is an easy and simple device of introducing efficiency.
Demerits
(1) But the worker gets only 50% benefit of his efficiency. It is said that he can earn in the saved time, but where is the work.
(2) The quality of the work is not cared for and the waste of material increases.
