Question

Mweene Plc is a manufacturer of a product used in the sports industry. The product is assembled from various parts and the production operatives are paid on a piece work basis. The piece work scheme to be applied to products in a week is as follows: 0 – 100 units K4/unit 101 – 200 units K4.8/unit 201 – 200 units K5.6/unit Over 300 units K6.4/unit It should be noted that only additional units qualify for the higher rates. The following output was achieved by three operatives during the week ending 31st May, 2018. Operative Elude Sanks Joy Units Units Units Output 520 600 480 Required: (a) Calculate separately the earnings of each operative Elude, Sanks and Joy for the week ending 31st May, 2018. (b) State two (2) advantages and two (2) disadvantages to an employer if they use a piece work scheme. (c) List any four causes of labour turnover .

Answer 1

Earnings for each operators

Elude

Output unit=520

Units Rate Earnings

For the first 100    100 * 4 400

For the next 100 units 100 * 4.8 480

For the next 100 units 100 * 5.6 560

For the rest (520-300) 220 * 6.4 1408

Total     520 2848

The additional units are qualified for the higher rates so for the first 100 units the rate is 4, for the next 100 units the rate is 4.8 and for the next 100 units the rate is 5.6 and any units additional of 300 will be earned at the rate 6.4.

Sanks

Output units 600

Units Rate Earnings

For the first 100    100 * 4 400

For the next 100 units 100 * 4.8 480

For the next 100 units 100 * 5.6 560

For the rest 300 units 300 * 6.4 1920

Total 600 3360

The additional units are qualified for the higher rates so for the first 100 units the rate is 4, for the next 100 units the rate is 4.8 and for the next 100 units the rate is 5.6 and any units additional of 300 will be earned at the rate 6.4.

Joy

Output units 480

  

Units Rate Earnings

For the first 100    100 * 4 400

For the next 100 units 100 * 4.8 480

For the next 100 units 100 * 5.6 560

For the rest 180 units 180 * 6.4 1152

Total 480 2592

Advantages and Disadvantages of employer using piece work scheme

Advantages

The employees will be encouraged to work more and increase production as their earnings is linked to the units of production.

There will be increase in production and better utilisation of available resourses such as machine and equipments.

Disadvantages

There are chances that workers will focus only on increasing quantity of production so quality may be deteriorated.

It will be difficult to fix a suitable piece work rate. Lower piece rate will frustrate the workers and will not provide any increment in production.So equitable piece rate need to be fixed in order to be successful.

Causes of labour turnover

Dissatisfaction with wages

Dissatisfaction with working environment

Dissatisfaction with incentives, working hours.

Retirement or death