Solution:

Methods of financial incentive system:

(1) Piece rate system:

• Under this system piece rate for completion of the job is fixed.

• If a worker, completes the job earlier, he can save his time, he can make more jobs and whatever the extra money he gets for the extra work, wholly goes to him.

• The employee will also be benefited by the savings in overheads for the extra output.

(2) Cent per cent premium:

• In this the standard time for completion of the job is fixed and its rate of completion during this period is also fixed.

• Now the worker completes the job in time is not given any incentive, but those who completes the job earlier, get full payment for the time saved.

(3) Will premium Plan:

• This is similar to Halsey premium plan, but in this worker gets upto 50% of his extra output along with standard day rate.

(4) Bedaux Premium Plan:

• This is also like Halsey and Will premium plans. But in this workers are given at the rate of 75% of their extra output along with standard day rate.

(5) Rowan Premium Plan:

• In this, worker is again guaranteed his daily or hourly rate, A standard time is also fixed for job. /a premium is given to workers those who saved the standard time.

• In this system, the increases up to certain output but decreases in the same ratio afterwards. The worker gets maximum incentive, when he completes the tasks in half the standard time.

• In this system, the increases up to certain output but decreases in the same ratio afterwards. The worker gets maximum incentive, when he completes the tasks in half the standard time.

(6) Gantt’s task and bonus system:

• In this system, a careful study of the job is made and from that study best conditions for the performance of the job are determined.

• On the basis of these performances standard output to a given time is set. Now if a worker completes the job in a given standard time, he receives bonus equals to 25% of the time taken.

• When a worker fails to produce the required output he only gets his time rate without any bonus.

(7) Merric’s multiple piece rate system:

• Merric divided the workers into three categories, namely, beginners, averages and first class workers.

• The higher rates are paid to those who reach the standard, second rates for those who reach 80% of the standard, and a third rate is below the 80% output.

(8) Halsey Premium Plan:

• In this system, an hourly rate or daily rate is guaranteed to the workers. A standard time is also fixed for the performance of each job.

• If a worker saved the standard time, then he will be paid hourly rate or daily rate plus 33.33% of time saved as incentive.

• In this plan, incentive goes on increasing as the output increases. Here a part of the saving goes to the worker and remaining part of the saving to the employee.