There are many forms of remuneration, but all of them are based on piecework or time-based. These two forms have their pluses and minuses.
In itself, wages fulfill many important functions. These functions are implemented in the payment system, which may be beneficial to the employer, employee or both of them at the same time. The interests of the parties may coincide, but they may also diverge. The interests of workers are realized by the reproductive function of wages, and by the employer - stimulating.
Piecework pay
It is different. Indirect piece-rate wages are used to remunerate people engaged in the maintenance of jobs, equipment and other things. It is calculated at the tariff rate. Direct piecework wages are calculated based on the direct volume of work performed.
It may seem that for any worker it will be the most profitable and convenient. It may also seem that it is beneficial to the employer, as the amount of payments will directly depend on how much was made by the worker. Piecework pay has its advantages. Perhaps the main one will be that the payment depends on the result. The employee is interested in the speed of production, which means that the interests of the employer are realized very, very successfully. The worker does not need to be controlled much, since, having done little, he will simply receive less than usual. In some cases, piece-rate wages really attract workers who agree to work at a pace, efficiently and responsibly.
An employee always has the opportunity to increase his income by exceeding the norm. It is worth noting that such a job is taken without any special checks and often without paperwork.
Studies have shown that an employee on a piece-rate wage works harder than an employee on a time wage basis. The pace of production in the transition to piece-rate pay may increase markedly.
There are really many pluses. Some of them seem obvious. However, it is worth noting that after all, today many employers prefer to use time-based wages. Yes, there are plenty of minuses for piecework.
The disadvantages include the fact that the employer is not always able to take into account factors that are in no way dependent on workers, but they affect production. In the event that the earnings do not depend on the results, it is unlikely that someone will be zealous. In a poorly equipped workplace, it is sometimes difficult to do even basic work. Any downtime due to equipment breakdowns, of course, are not paid. This means that at the end of the working day a person can leave their place of work with an empty pocket.
It is important to note that the interests of employers and people working on the job often do not coincide. The former want to receive the highest quality product, while the latter try to do as much as possible, but do not pay attention to the quality. Piecework wages lead to the fact that the employer has to spend money on additional quality control of products.
Collective motivation may suffer. Piecework pay leads to the fact that a person works exclusively on his own, not thinking about the success of the team or the success of the entire enterprise. Incentives for achieving results in the long run are also absent.
Excessive rush can lead to too frequent equipment breakdowns. Inaccuracy, fuss, careless handling - all this leads to the fact that the equipment simply fails too early.
Workers who have good skills in a particular area of production will sooner or later realize that piece-rate pay gives too few guarantees for tomorrow.