The pay plan has long been popular as a means of compensating production workers by paying a fixed sum for each unit of production completed. Group of answer choices profit sharing piece-rate competency-based gainsharing merit-based

Piece rate pay plan

Explanation:

The piece rate pay plan is used by a business or organization that wants to pay its workers based on the number of production units that the workers complete. Using the piece rate pay plan as a form of pay plan helps in the conversion of compensation into a cost which varies directly with sales with the assumption that all the goods produced are sold immediately.

The piece rate pay plan is calculated by multiplying the piece rate by the number of production units of work completed by a employee. For example, if an employee is paid $2.00 per unit of production and has completed 300 units of work for a week, the employee's regular earnings will be equal to $600.

Piece-rate

Explanation:

The piece-rate pay plan has long been popular as a means of compensating production workers by paying a fixed sum for each unit of production completed.

Piece rate pay plan is the payment of employees based on the quantity of product they produce. A piece-rate pay system means that the worker is paid per unit of production.

Advantages of piece rate pay plan;

1. Increase in output. Since workers are paid according to quantity they produce, they direct more effort to production so as to earn more.

2. It saves time. Employees tend to spend less time producing a unit so as to be able to produce more units for higher payment.

3. Cost per unit can be calculated easily

Disadvantages of piece rate pay plan;

1. Quality of products tend to reduce because workers focus more on quantity produced.

2. Welfare of workers might be affected. Workers always wants to earn more, so they continue producing even when they are ill.