DIFFERENTIAL PIECE WAGE SYSTEM
Taylor was a strong advocate of piece wage system. He wanted to differentiate between efficient and inefficient workers. The standard time and other parameters should be determined on the basis of the workstudy discussed above. The workers can then be classified as efficient or inefficient on the basis of these standards. He wanted to reward efficient workers. So he introduced different rate of wage payment for ? According to Taylor, the difference of Rs. 190 should be enough for the inefficient worker to be motivated to perform better. From his own, Taylor gives the example of a worker named Schmidt who was able to earn 60% more wages from $1.15 to $1.85 on increasing pig iron loading from 12.5 tons per man per day to 47 tons per man per day in box cars at Bethlehem Steel works by following scientific management techniques. It is important to have a relook at the techniques of scientific management as comprising a unified whole of Taylor’s prescription of efficiency. Search for efficiency requires the search for one best method and the chosen method must lead to the determination of a fair day’s work.
There must be a compensation system that differentiates those who are able to accomplish/exceed the fair day’s work. This differential system must be based on the premise that efficiency is the result of the joint efforts of the managers and the workers. Thus, rather than quarrelling over the share in the resultant surplus, the workers and managers should work in harmony for maximising the output rather than restricting it. Clearly the sum and substance of Taylor’s ideas lies not in the disjointed description of principles and techniques of scientific management, but in the change of the mindset, which he referred to as mental revolution. Mental revolution involves a change in the attitude of workers and management towards one another from competition to cooperation. Both should realise that they require one another. Both should aim to increase the size of surplus. This would eliminate the need for any agitation. Management should share a part of surplus with workers. Workers should also contribute their might so that the company makes profits. This attitude will be good for both of them and also for the company. In the long run only worker’s well-being will ensure prosperity of the business. Now, having studied the elements, principles and techniques of scientific management we can consider the practical applications of the same at the time of F.W. Taylor and in the present. We can also examine the present status of scientific management. Today, many new techniques have been developed as a sequel to scientific management.