An incentive plan where a job completion time is set and a bonus is paid based on the exact percentage of time saved is designated as_________________?
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Answer: E. Rowan Plan
Explanation
The Rowan Plan specifically calculates worker bonuses based on the exact percentage of time saved. Workers under this scheme receive additional pay proportional to the fraction of standard time saved. This method prevents excessive bonus payouts while still rewarding workers for high operational efficiency. Wage incentive plans aim to motivate workers to increase productivity and complete jobs faster. James Rowan introduced this specific premium system in the early twentieth century for manufacturing shops. The bonus formula multiplies the time taken by the ratio of time saved to standard time.
Industrial engineers implement such incentive structures to balance labor productivity with manufacturing cost controls. Fair wage plans improve worker morale and reduce turnover in labor-intensive industrial production environments. Payroll departments rely on precise time study data to calculate accurate incentive bonuses weekly. The Halsey Premium Plan shares only a fixed percentage, usually fifty percent, of the time saved. The Taylor Plan utilizes differential piece rates based entirely on whether workers meet standard output quotas. The Bedaux Plan measures work in standard rating units called points rather than direct time percentages.
- Subject
- Engineering
- Category
- Mechanical Engineering
- Topic
- —
- Difficulty
- medium
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