Pay for piecework and progressive increases the motivation of workers

News and Society

Our civilization is called "societyconsumption, "and if the buyer is on one side of the balance, then the seller is on the other. In a situation where the market for goods and services is full, as we can see today, for the business owner, the main issue is not "how to produce" but "how to sell." Of course, this helps advertising and various marketing tricks, but much depends on the correct motivation of the seller.

The Soviet past

Once the sellers received a fixedsalary, and all this suited. But this kind of calculation is effective only in the situation when there is a certain deficit on the market, and buyers simply do not have a choice. Now at every step we see shops, shelves which are bursting from the goods, and numerous firms providing any, even the most exotic services, so the seller must be competent and active, so that the buyer does not go to the neighbors. Of course, it is necessary to train personnel, and create a positive reputation for the employer, but motivation comes first. Therefore, to replace the Soviet fixed rates came piecework wages, in which the staff receives as much as they really earned.

piecework and progressive pay

Interest from sales

So, economic development requires new approaches tocalculation of wages. Let's figure out what pay is a piece-progressive. Piece - means, the payment depends on the "transaction", that is, on the volume of sale or production. Progressive - the higher the revenue, the higher the payment for each unit. Let's look at an example.

Piece-rate work:

Say, the seller of clothes receives 10% of the proceeds. Then:

- Sales of 300 thousand rubles. = 30 thousand salary.

- Sales of 500 thousand rubles. = 50 thousand salary.

Piece-progressive pay: the percentage of payroll increases with revenue growth. For example, for an additional 100,000, 5% is added, 200 thousand above the norm - 6%, etc.:

- Sales of 300 thousand rubles. = 30 thousand salary.

- Sales of 500 thousand rubles. = 62 thousand rubles.

piecework progressive payment

We complicate the problem

There is also a more complex (and interesting)piecework and progressive form of payment. At the same time, the increased interest is calculated not only from additional revenue, but also from the main revenue. That is: we will take all the same rate of 10% and a premium of 2, 3, 4%, etc. for every following additional 100 thousand, but this allowance will already work for the full amount:

- Sales of 300 thousand rubles. = 30 thousand salary (10%).

- Sales of 400 thousand rubles. = 48 thousand salary (12% of the total amount).

- Sales of 500 thousand rubles. = 65 thousand salary (13% of the total amount);

Of course, in a large enterprise calculatepiece-progressive pay will not be easy, and this is the main reason why such a scheme is used primarily in the sale of goods and services. A little later we will consider a formula that can be used in a manufacturing enterprise.

calculate the piece-progressive payment

Why this is necessary

It would seem that the usual piece-rate payment is also not badworking. So what is the best piece-work payment? Of course, motivation! If the employer pays a fixed rate, the risk is high that the employee will not particularly try: he knows for sure that he will receive the same amount in any case. With a simple piece-rate salary, there is already a motivation, but numerous observations of personnel in different spheres have shown that many workers set a bar for themselves ("Well, I have worked for 30 thousand, and you can relax"). But the piecework and progressive pay constantly motivates to work more and more, because after applying the same efforts, you can get not 50 but 60 thousand. Especially if the option is used, when the growing coefficient is applied to all revenue (or development), and not just to the amount above the norm. In this case, it is felt that, without making an additional output, the employee seems to lose some of the salary that he could get.

piece-progressive wage formula

Underwater rocks

Despite the fact that the piece-progressive systemremuneration is well proven, it is used less frequently. The main reason for this is the unwillingness of many managers to change something. It’s really not so easy to introduce a new system, for this you need to perform a series of actions:

  1. Monitor the company to make sure that the stop in development is associated with a lack of motivation among employees.
  2. Calculate the ratios so that they are sufficiently tangible for employees and at the same time do not exceed the allowable expenditure rate for the employer.
  3. Explain to employees a new payment system, show its goals and benefits.
  4. Make sure that the accounting department knows how to calculate the piece-progressive wage.

The first two points are very important as it is possible.a situation where problems lie at all not in the absence of motivation, but in the lack of professionalism of the sellers or the shortcomings of the products / services. In addition, it is sometimes easier and more useful to hire an additional employee, instead of raising wages to everyone. New personnel often themselves become a good motivation, as competition increases (besides, there are suspicions that layoffs are coming).

piece-progressive form of remuneration


Above, we have reviewed examplespiece-progressive salary only in sales. This is not accidental, since in other areas of the economy this type of calculation is more difficult to apply for several reasons:

  1. Significant increase in settlement volume: whereas in sales today, managers often fill in preliminary calculations themselves, and, as a rule, departments have a relatively small number, in the production of accounting, they are forced to fully calculate wages for a large number of employees.
  2. The volume of production depends on the capabilities of the equipment, the supply of raw materials and the time required to produce a unit of production.
  3. The risk of increasing marriage.
  4. The risk that the employee will stand idle due to breakdowns or other circumstances beyond his control and will not be able to work out an increased rate.
  5. With the growth of production and variable costs grow.

Nevertheless, the piece-progressive labor wage is applied both at industrial enterprises and in agriculture, although it is often not quite in the same form as in sales, and not so often.

calculation of piece-rate progressive wages

Types of calculation

Payments for piecework-progressive may have several forms that are used to simplify calculations or reduce risks:

  1. Bonus: for additional output or revenue, the employee receives a premium, the size of which is the higher, the greater the excess of the norm. This method is simpler, since the amount of the premium is clearly written in the documents in advance and does not require additional calculations.
  2. Time and time: it is applied on those productions where the risk of idle time is great. Here, the salary is conditionally divided into three parts: the main piecework + progressive (subject to exceeding the norm) + time-based payment for those periods when the employee was unable to perform his duties for reasons beyond his control.
  3. Indirect: great option for payroll to employees of auxiliary departments (for example, repair crew) or management. Their payments will directly depend on the amounts that will be accrued to the main production. Thus, repairmen will be interested in the fact that the damage was as small as possible.
  4. Accord: it is applied to the crews which are carrying out single works: construction or harvesting. If the work is performed before the deadline or in excess of the amount, the employer issues a bonus for the whole team, and then this bonus is distributed among the employees depending on the contribution of each of them.

piece-progressive wage system

Exact calculation

Since in each case may applydifferent principles on which the piecework progressive wage is calculated, the calculation formula will also have its own each time. In large-scale industries, where the indicator such as standard-hours is introduced, the following formula is often used:

ZP (general) = ZP (sd) + (ZP (sd) x (Pf - Mon) x K) / Pf, where:

- ZP (general) - final wage;

- ZP (sd) - payment at the basic rate for the entire production;

- PF - the actual production;

- Pb - regulatory production;

- K - progressive coefficient.

Approval in documents

In general, piecework-progressive paymentlabor provides for payment, the growth of which directly depends on exceeding the established norm of work efficiency, but the rate, like the form of calculation, may be different. Therefore, each company makes its own decision on the principles of calculating payments, increasing coefficients, bonuses and so on. If you decide to introduce a piece-progressive salary, then you need to:

  1. Develop a whole system of norms.
  2. Describe in detail the accrual system in the Regulations on wages and in labor agreements with employees.
  3. Provide a working environment in which staff will not stand idle through no fault of their own.
  4. Establish a system of quality control of work, so that in the pursuit of quantity the defect rate does not increase or sellers do not begin to use incorrect sales methods.

Enter or not enter

Piece-rate progressive payment is recognizedmodern economists of one of the best systems, since, on the one hand, it allows you to more equitably distribute the wages, on the other - serves as a simple, but very effective motivation.

Of course, this form of calculation has its drawbacks: difficulties in accounting, the risk of aggressive behavior of employees or loss of quality, as well as an increase in salary costs, but with the right approach, it all pays off. A good option would be to use two systems simultaneously: a piece-progressive payment along with premiums for high quality products or polite treatment of customers. For large enterprises, indirect calculation may be particularly interesting, when the salary of auxiliary units depends on the production of the main departments, this helps to get rid of problems with supplies or long repairs.

The main thing is to remember that the profit of an enterprise depends on a variety of parameters. And before you enter the piece-rate progressive payment, make sure that all other problems in the enterprise are resolved.

Comments (0)
Add a comment