Mr. A is working by employing 10 skilled workers. He is considering the introduction of some incentive scheme — either Halsey Scheme (with 50 per cent bonus) or Rowan Scheme — of wage payment for increasing the labour productivity to cope with the increased demand for the product. He feels that if the proposed incentive scheme could bring about an average 20 per cent increase over the present earnings of the workers, it could act as sufficient incentive for them to produce more and he has accordingly given this assurance to the workers. As a result of the assurance, the increase in productivity observed as revealed by the following figures for the current month:

REQUIRED:

(a) Calculate effective rate of earnings per hour under Halsey Scheme and Rowan Scheme.

(b) Calculate the savings to Mr. A in terms of direct labour cost per piece under the schemes.

(c) Advise Mr. A about the selection of the scheme to fulfill assurance.

Transcribed Image Text:

Hourly rate of wages (guaranteed) Average time for producing 1 piece by one worker at the previous performance (This may be taken as time allowed) (hours) Number of working days in the month Number of working hours per day for each worker Actual production during the month (units) *20 2 25 1,250