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What are the types Individual Incentive plans?

 Incentive is a reward for working efficiently and to motivate the workers to work efficiently in future incentives are given to them. It is given with salary to workers. There are different types of incentive plans are given which are classified into two parts that is: Individual incentive plan and Group incentive plan:

In individual incentive plan different incentive plans are introduced by different people. Some of the incentive plans are as follows:

·        Halsey premium plan: It is invented by F.A. Halsey in 1981.In this plan standard time and standard work are fixed. If the workers completed standard work in standard time they will be rewarded by incentives. And the incentives are calculated by time saved multiply with wage rate and the result will multiply with bonus percentage. If the bonus percentage is not given then in that case 50% of bonus is provided to them. This plan is not suitable when quality of product is more important. If the workers are not able to work standard work in standard time then those workers get wages according to their working hour to complete the given work.

·         Rowan premium plan: It is invented in 1898 by James Rowan. This plan is similar to Halsey premium plan but there is a slight difference in this plan that is instead of 50% bonus, the bonus is calculated. To calculate the bonus time saved is divided by standard time and the result is multiplied with time taken and then the result of it multiplied with rate per hour to get the final result.

·        Taylor Differential piece rate plan: It is introduced by Mr. F.W.Taylor. In this plan 2 piece rates is fixed that is high wage rate and low wage rate. The standard work is also fixed. The bonus is not given to workers instead of it workers get higher wage rate if they work efficiently. There is no guarantee of minimum wage is given to workers. If the workers complete the standard work then they get 80% of normal wage rate and if the workers complete the standard work higher than standard then they get 120% of normal wage rate.

·        Merrick Multiple Piece rate system: It is similar to Taylor piece rate but under this system 3 piece rate is fixed instead of 2. Those workers who meet less than 83% of standard output, they get wages at ordinary piece rate. And those workers whose performance level is 83% to 100% of standard output in that case those workers get wages at the rate of 110% of ordinary piece rate. And the workers whose performance level is more than 100% of standard output, they get wages at the rate of 120% of ordinary piece rate.

·        Gantt Bonus plan: Under this plan guarantee time rate wage and bonus is given. In this plan high rate and differential piece rate is also included. If the workers work less than standard output than they get wages according to time rate and if the workers meet the standard output than they get 20% bonus of time rate with wages. And if the workers work more than standard output than they get wages according to output produced at high piece rate.


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