Features of time-based and piecework wages. Example of calculation based on piece-time pricing

The time-based wage system can be effectively used at any enterprise, especially at a high-tech one, as the most promising for the purposes of further development of the enterprise. The time-based remuneration system is most suitable for enterprises that have strategic development plans and ambitious leadership goals. But also for weak enterprises time system remuneration will be economically more profitable than the piecework system of remuneration.

The time-based remuneration system, as the name suggests, implies a direct dependence of the employee’s remuneration on the time spent at his workplace.

The economic dictionary gives the following definition: a time-based wage system is a form of remuneration based on the principle that the amount of wages depends on the amount of working time, hours worked.

There are several types time payment labor:

simple time-based - wages are paid for a certain amount of time worked, regardless of the volume of work performed in accordance with the tariff rate or official salary(also called: time-based with a salary part);
time-based bonus - not only wages are accrued for time worked, but also a bonus for achieving certain quantitative and qualitative indicators;
time-based with an established standardized task - a work plan is established that must be completed within a certain period of time, earnings consist of two parts: a time-based part and an additional payment for completing the task;
piece-time - refers to a mixed remuneration system and combines fixed payment for time worked and remuneration for the volume of work performed.

The time-based wage system has a number of generally recognized advantages.

Firstly, it is very easy to administer.

The time-based wage system is directly related to the employee’s working time, which is recorded in the corresponding timesheet of the enterprise department. The employer, according to current legislation, is obliged to report time sheets on all its employees. Therefore, these costs are already included in the cost of the products they produce and maintaining timesheets does not require additional costs. With modern accounting software When closing the timesheet, calculating the wages of each employee is a matter of a few seconds.

Tariffs, salaries, allowances, bonuses of an employee must be determined before hiring him and recorded in the employment contract, which is also the responsibility of the employer. The procedure for calculating bonuses and other payments must be specified in the “Regulations on bonuses” or in the “Regulations on wages"at every enterprise. This established order is translated into mathematical formulas in the appropriate payroll program and, when calculating wages, easily calculates these payments without requiring additional effort from the accountant.

If the enterprise pays one-time bonuses and/or their size is set directly by the manager or a specially formed commission based on certain criteria, then in this case, additional costs for such administration are either absent or negligible compared to the general payroll of the department or the entire enterprise.

Secondly, With a time-based wage system, it is easier to monitor employees’ compliance with production technologies, regulations, equipment maintenance and repair schedules, etc.

When an employee’s salary is not directly “tied” to the volume of work he performs, and he does not need to “drive output” by any means to receive the material reward he plans, it is much easier to force the employee to strictly fulfill technological process and all routine maintenance. With strict sequential observance of all technological operations, including technical specifications such as, for example, processing modes and temporary ones, for example, when reconfiguring equipment for the new kind products, employee productivity will correspond to planned indicators, and product quality will correspond to the technological level of production. In other words, with a time-based wage system, it is possible to create conditions under which the actual volume of output will be equal to the planned and, therefore, the maximum possible for a given production, and the quality will be stable and pre-established by the level of technology.

In high-tech industries, where the quality of products is often more important than their quantity, and losses (reputational, financial) from possible defects are very high, only a time-based wage system can guarantee strict adherence to production technologies by all employees, with appropriate control, and allows for the creation of rhythmic production with synchronization of all production processes.

Third, With a time-based wage system, there are no prerequisites for competition between workers.

Competition is only good in the environment external to an enterprise, that is, between enterprises. Competition within the team is unacceptable. Competition, in contrast to competition, which is aimed at winning by improving one’s own performance, presupposes victory at any cost, including by deteriorating the opponent’s performance and causing direct harm to his work. Moreover, it is much easier and simpler to harm an opponent than to improve your own work. Therefore, an enterprise’s internal competition always worsens its external competitive advantages.

With a time-based wage system, competition is also possible. But its main difference from the piecework wage system is that competition is not its basic principle. Therefore, with a time-based wage system, there may or may not be competition within the enterprise, it all depends on the will of the manager. But with a piece-rate wage system, there is always competition and the management of the enterprise can only influence its intensity and forms of manifestation.

Fourthly, The time-based remuneration system motivates workers to improve their skills.

With a time-based wage system, the size of the employee’s tariff or salary depends on his qualifications, or at least this should be the case. Therefore, in order to increase his salary, an employee needs to work on improving his qualifications. This is the only way to increase wages (options for increasing an employee’s wages under the patronage of a manager are not discussed in this article).

Not only the employee, but also the normal employer is interested in improving the skills of employees. Now all managers complain that it is very difficult to find workers with the required qualifications. With a time-based wage system, the employer has the opportunity to “grow” the necessary personnel in his team. Moreover, these employees will be very loyal to their employer, which is very important for any enterprise, especially for a high-tech one.

Fifthly, The time-based wage system guarantees the employee a constant income.

That is, the employee always knows exactly what salary he will receive next month, in six months, in a year. Currently, there is continuous change and instability in the world - this is very important for every person. In this case, you can at least somehow plan your life for a fairly long period. This is especially true for young families.

For a manager who really works for the future and has ambitious plans for his enterprise, it is important to have a stable, efficient team. Personnel turnover for such an enterprise is big problem and has negative long-term consequences. In this case, the time-based wage system can serve as a factor that “cements” the team.

Here are just a few of the main advantages of the time-based wage system. It is obvious that the time-based wage system is only a necessary condition for the implementation of the positive preconditions that are inherent in it. In order for these opportunities to turn into real results, the management of the enterprise needs to make great efforts, otherwise all this will remain only good wishes. The time-based wage system requires constant work to improve the efficiency of enterprise management. But the return from such work will be many times greater than the effort expended, if, of course, it is applied in the right place and in the right direction.

Some experts in the field of personnel policy and staff motivation advise establishing a time-based wage system only in those industries where it is difficult or impossible to charge the volume of work performed, or in enterprises where the employee cannot influence the volume of output.

The main disadvantage of the time-based wage system is that it does not encourage workers to work intensively and requires additional costs for monitoring their productivity.

But is it?

Let's start with “strengthened” control over employees.

On any manufacturing plant control over the productivity of workers, or rather, over the implementation of the production plan, is carried out directly on the ground: foremen, foremen, site managers, shop managers, and in the enterprise as a whole: the production manager, the planning department. At individual enterprises, this group of people may be different, other divisions may be added, the names of departments may change, but in general, in any, even the smallest enterprise, there are always employees who control the timing and order of order fulfillment. Such a control system exists at any enterprise, regardless of the form of remuneration of workers: piecework or time-based.

Moreover, the quantitative composition of control bodies at similar enterprises is approximately the same and depends to a greater extent on the size of the enterprise itself than on the form of remuneration of workers.

It would be naive to believe that in enterprises with a time-based wage system, each or a group of workers should be assigned a controller who would vigilantly monitor their work and push them when they shirk their duties. And with piecework payment, all workers are left to their own devices like robots and rush around the workshop in autonomous mode, executing the programs embedded in them. Everywhere we need foremen, foremen, and other management and supervisory personnel. Both in an enterprise with a time-based wage system and in an enterprise with a piece-rate wage system, someone must assign tasks to workshops, sections, teams, workers, monitor their timely completion, change tasks if necessary, adjust the plan, and so on.

In the century before last, slaves worked on sugar cane plantations in Central and South America. As you know, slave labor is the lowest productive labor. How to make slaves work intensively? Can't you assign an overseer to every slave? This is unprofitable from an economic point of view, since the overseer needs to be paid. We found a simple way out.

When a slave was first brought to the plantation, an overseer was assigned to him, who “chased” the slave all day long, forcing him to work, not giving him the opportunity to rest or take time off from work. At the end of the day, all the sugar cane collected by the slave was weighed and thus the daily norm was established for the slave.

Subsequently, when the slave did not fulfill the established norm, he was punished.

That is, even in the 19th century to control productivity work force no additional costs were required, but made do with the existing “controlling authority” - overseers, whose main duty was to monitor the slaves so that they did not run away.

Nowadays there are much more effective ways performance monitoring.

The fact that an enterprise with a time-based wage system for key workers incurs additional costs for the maintenance of regulatory bodies is a myth. Costs are approximately the same and do not depend on the form of remuneration.

As for low productivity with a time-based wage system.

If the quality of management is low, which, unfortunately, is the case in many enterprises, there is not much difference in the remuneration system. Productivity under a time-based wage system may be lower or higher than productivity under a piece-rate wage system - it doesn’t matter. Low productivity with a time-based wage system is “compensated” by additional costs for low quality (defects) of manufactured products and for maintaining a staff of specialists involved in tariffing production operations. Something else is important. Both of these enterprises will always lose to each other and to other better organized enterprises.

So, for enterprises with low level management, the form of remuneration does not matter at all - they are ineffective by definition and changing the form of remuneration will not help here. But what does a time-based wage system give to an enterprise that strives to take a leading position in its market and is ready to use the most modern and effective methods management?

Let's look at this issue from a performance point of view.

Productivity at an enterprise depends on two main components: the organization of production processes and the intensity of work of each worker. In other words, not only do workers have to work well and hard, but it is also necessary to provide them with constant work and control them so that they do what the enterprise really needs at the moment.

The intensity of a worker’s work is influenced by his motivation, which, in turn, is determined by his needs.

There are only three main types of needs:

material - the need for clothing, food, shelter, warmth, safety, and so on;
status - the desire to belong to a certain social group, enjoy respect and recognition, be loved, have family and friends, etc.;
self-realization (“self-actualization” according to A. Maslow) – the desire to realize one’s abilities, to learn and explore the world, achieve your goals, express yourself through creativity.

Motivation, in short, is a process that encourages you to perform certain actions to satisfy needs that are of value at the moment.

Motivation, which is based only on material needs, is the weakest of all types of motivation and always has a limit in terms of quantitative indicators, it is different for different workers, but it is always there, and a temporary limit on the duration of the impact. (Motivation is a separate topic).

Therefore, using only this type of motivation will only allow the enterprise to stay afloat for some time, but will not reach leadership positions. We would never, for any money, launch a rocket into space if the employees participating in this program were motivated only by receiving large material rewards. It was probably present, but it was not the main driving force.

Motivations based on the other two types of needs are the strongest, especially the latter. These are exactly what a manager needs to use in his or her enterprise to increase productivity and more. Motivation can affect several needs at once and there is nothing wrong with that. It is important to understand that motivation aimed at realizing the employee’s need for self-actualization will give the greatest effect for both the employee and the enterprise, incommensurate with actions aimed at satisfying his material needs.

Of course, use different types motivation can be effective at enterprises with different forms of remuneration: both piecework and time-based. But, as we have already found out, the time-based wage system is simpler and cheaper to administer. If material needs are not the main driving force in increasing the intensity of an employee’s work, and in other areas they have a negative effect, then why use a complex expensive remuneration system - a transaction, if its only positive quality– direct dependence of an employee’s salary on his productivity – doesn’t work?

Conclusion: All other things being equal, for any enterprise, especially a high-tech one, it is more economically feasible to use a time-based wage system, as the most promising for the purposes of further development of the enterprise. The time-based remuneration system is most suitable for enterprises that have strategic development plans and ambitious leadership goals. But even for medium-sized and very weak enterprises, without any optimistic prospects, the time-based wage system will be economically more profitable than the piece-rate wage system.

Why then do many managers see the piecework system as almost a panacea for all their problems?

The main “disadvantage” of the time-based wage system in the eyes of these managers, in my opinion, although they do not admit it, is that for its successful application, the management of the enterprise requires knowledge of modern effective systems management and the ability to apply them in practice. This includes strategic planning for the development of the enterprise, and high motivation (not only and not so much material) of employees to achieve their goals, and the standardization and organization of all production processes, and the creation of conditions for creative research at the project stage, and strict implementation of approved plans at the stage production, and the formation of a positive psychological climate in the team, and much more.

It is easier to assume that with a piece-rate wage system, workers interested in high earnings will independently strive for high-intensity work and this in itself will increase productivity in the enterprise as a whole, or, in any case, maintain it at a high level. Unfortunately, of course, nothing happens without effort and labor.

I remember one case with the manager of a manufacturing enterprise.

The task was to increase productivity at the enterprise at least twice short term– there were problems with fulfilling orders, which threatened to break contracts.

He was offered a plan that required him, as a leader, to accept complex solutions, radically changing both the management structure and many processes. His first reaction when he got acquainted with the plan was the following: couldn’t he just issue an order that from the 1st of the next month the volume of output would double?

By the way, with the implementation of the plan, productivity increased by 50% in the second month, despite the fact that the enterprise used only a time-based wage system.

It must be remembered that the form of remuneration is an important, but far from the only tool for enterprise management, and its effective use is only possible in conjunction with other management tools.

Piece wages.

Depending on the specifics of the company’s work, they apply piecework or time wages . Let's consider their main features.

v Piece-rate wage system.

With a piece-rate wage system, earnings are calculated based on the amount of work actually completed at piece rates calculated on the basis production standards or time standards. The volume of work can be taken into account in various units: tons, pieces, standard hours, etc.

An employee’s earnings depend on the number of units of production he produces (operations performed, services rendered). When paying piecework, the following formula is used:

§ If the employer uses production standards , to calculate the piece rate, the tariff rate is divided by the production rate:

Example.Piece wages, the employer applies production standards. The production rate for worker R.V. Makeev is 20 parts per day. His tariff rate is 800 rubles. in a day. Piece rate – 40 rubles. for one part (800 RUR: 20 parts). In a month, R.V. Makeev produced 380 parts.

His salary:

40 rub. × 380 children = 15,200 rub.

§ When to apply time standards , the piece rate is calculated by multiplying the tariff rate by the time standard:

Example. The employer applies piecework wages time standards. Standard time for the provision of one service for the operator Kireev A.I. – 1/4 hour (15 min.). Tariff rate – 160 rub. at one o'clock. Therefore, the piece rate is 40 rubles. for the service (160 × 1/4). During the month, Kireev A.I. provided 480 services.

His salary:

40 rub. × 480 conventional = 19,200 rub.

§ When determining the amount of piecework workers’ earnings consider not only the quantity, but also the quality of the products produced . Thus, complete defects due to the fault of the employee are not subject to payment, but partial defects are paid at reduced rates depending on the degree of suitability of the product. The specific amount of payment for defective products in a piecework wage system must be fixed in a local regulatory act.

§ By doing for work of various qualifications, employees are paid at piece rates for the work performed. When piece workers are entrusted with performing work that is charged below the categories assigned to them, the employer obliged to pay them the difference between grades. The procedure for calculating the inter-category difference is not established by law. The organization needs to enshrine it in a collective agreement or local act. It can be calculated like this:

Example. Piecework wages, calculation of additional payments for inter-grade differences.

Worker 3rd category Smirnov B.A. within a month he performed work of the 3rd and 2nd category. The piece rate for work of the 3rd category is 27.4 rubles, for the 2nd - 23.5 rubles. Smirnov B.A. manufactured 200 parts, paid at a rate of 27.4 rubles, and 170 parts, paid at a rate of 23.5 rubles.

The payment amount will be:

ü for performing work of the 3rd category will be:

200 children × 27.4 rubles = 5480 rubles.

ü for performing work of the 2nd category:

170 children ×23.5 rub.=3995 rub.

The inter-bit difference will be:

(27.4 rub. -23.5 rub.) × 170 children = 663 rub.

Salary of Smirnova B.A. per month:

5480 rub. + 3995 rub. + 663 rub. = 10,138 rub.

§ Production standards and time standards must be developed so that the monthly wage of piece workers is not lower than the minimum wage. If the employee earned less, an additional payment must be added to the minimum wage.

§ There are many types of piecework wage systems. Depending on the change in the fee per unit of production in case of exceeding the standards There are progressive, linear and regressive systems.

o Progressive system stimulates exceeding labor standards. Remuneration for labor in the production of products (works, services) in excess of the norms is made at increased rates.

o At linear system piece rate when reaching standard indicator does not change.

o Regressive system is aimed at ensuring that employees do not exceed the plan when the company realizes that it will not be able to sell products produced in excess of the norm. When using it, products produced in excess of the plan are paid at lower prices.

v Time-based wage system.

Time-based wage system It can be simple or time-premium.

§ With a simple time system The employee’s work is paid based on the monthly salary and the actual time worked. Salary is a fixed amount for the performance of duties for a calendar month, excluding compensation, incentives and social payments. The salary depends on the qualifications of the employee. When an employee with a time wage performs work of various qualifications, his work is paid taking into account the higher qualification.

The salary portion of the salary does not depend on the number of working days in a month if the employee has worked it in full. His salary is calculated using the formula:

Example. Time-based wage system, salary.

HR specialist Kovaleva A. I. works part-time (0.5 staff units). Her full-time salary is RUB 25,000. She worked three days in a month (a total of 22 working days in a month), the rest of the time she was on leave without pay.

Kovaleva A.I.’s salary for the month will be:

(RUB 25,000 × 0.5 staff units): 22 days. × 3 days = 1704.55 rub.

In this case, the employee’s salary must be no less than the minimum wage. When a deviation from standard hours occurs, payment is calculated for the actual time worked. It must be no less than the minimum wage, calculated in proportion to the time worked.

Also, an employee’s earnings with a simple time-based wage system can be calculated based on the hourly or daily rate and the actual time worked. The formula is applied:

Example. Time-based wage system, hourly wages.

To the watchman A.A. Pavlov Hourly wages are set. The hourly rate is 85 rubles. There are 21 working days in a month, Pavlov A.A. worked it out completely. The employee's working day is 8 hours. Number of hours worked per month – 168.

Salary of Pavlova A.A. per month will be:

168 h × 85 rub. = 14,280 rub.

§ With a time-bonus system remuneration provides for the calculation of wages not only for the time actually worked at the salary or daily (hourly) rate, but also for achieving certain indicators. That is, in addition to the salary part of the salary, employees are paid a bonus for success at work.

v We reflect the salary clause in the employment contract.

Terms of remuneration - piecework or time-based - must be specified in the employment contract (Article 57 of the Labor Code of the Russian Federation).

§ With a time-based payment system The labor contract specifies the salary, allowances and additional payments, as well as bonuses provided for by the remuneration system (Articles 129, 135 of the Labor Code of the Russian Federation).

§ In the employment contract with the pieceworker, indicate piecework wage system . Also refer to local act, which sets piece rates and production standards (time standards). The employee must be familiarized with this document against signature (Article 22 of the Labor Code of the Russian Federation).

v Documents on the basis of which salaries are calculated.

§ The employee's salary is determined based on:

ü staffing table,

ü local acts on wages,

ü employment contract,

ü employment order.

§ There are also documents on the basis of which the monthly salary can be changed:

ü official notes,

ü orders for bonuses, etc.

§ In addition, for payroll documents are needed confirming that the employee has worked the required time and met the production quota. If an organization uses unified primary forms for time-based wages, this is a timesheet for recording working hours and calculating wages (form No. T-12) or a timesheet for recording working hours (form No. T-13).

§ The piecework wage system involves more complex paperwork. The employer must not only develop documents establishing production standards, but also ensure accounting of products, operations, and services performed by each employee. For this purpose, primary documents are used: statements, orders, personal accounts etc.

v Disadvantages of piecework payment:

1. Maybe the quality of the product will decrease , since the employee strives to do more, not better.

2. Equipment may not be properly maintained , since company employees do not want to waste time on this.

3. Violated safety precautions (due to rush).

4. Arise violations in production technologies .

5. Material and raw materials are overused . The employee is not interested in saving resources, since this will not affect his earnings.

Now as in Russian Federation, and throughout the world, one of the most common forms and methods of calculating wages is the time-based wage system. Its benefits provide employers maximum amount opportunities for organizing effective personnel management and make it possible to apply this system in an almost unlimited range of industries and types of work performed. At the same time, it can combine other methods of remuneration, for example, in the format of a time-based bonus system.

What is a time-based wage system and the norms of the Labor Code of the Russian Federation

As can be understood from the very name of such a payroll system, a time-based wage system is a method of calculating wages to employees in direct correlation with the time they actually worked. Such a system involves the use of a wide variety of working time tracking mechanisms. It is applied, first of all, in relation to positions in which the use of payment will demonstrate insufficient effectiveness or cannot be implemented at all due to the specifics job responsibilities worker. However, in practice, the range of application of time-based wages covers many areas labor activity.

Legal regulation of the time-based payment system presupposes that the employer has fairly broad powers in establishing certain terms of work and mechanisms for crediting wages. At the same time, there are simply no clear standards that could fix strict limits for the application of the above principles and mechanisms for issuing wages. However, when installing a time-based wage system, the employer should in any case pay attention to the following articles of the Labor Code of the Russian Federation:

Art.91. Establishes the concept of working time, which is subsequently used in most aspects of setting time wages. Thus, all general labor restrictions relating to issues of workers’ working time are fully applied to time-based wages.
Article 100. It regulates the procedure for recording working hours. Exactly work time, spent by an employee is the main quantitative indicator used in calculations in the case of using a time-based wage system.
Art. 135. Its standards regulate the principles of setting wages in general and provide for the ability of the employer to independently regulate the mechanisms and applied remuneration systems.

Directly by the standards of the Labor Code of the Russian Federation, the concept of time-based wages is considered only indirectly, but it is covered by all mandatory requirements ensuring guarantees and rights of workers. These include:

Limitation of working hours and the right to rest. A standard workweek cannot include more than 40 hours of work, regardless of the working time recording system and the wishes of the employee. For work beyond these guidelines, the employer will in most cases be required to pay overtime.
Minimum wage. As part of the use of a time-based wage system, the employer is obliged to ensure that the employee complies with the statutory standards for calculating wages not lower than the federal or regional minimum. However, in the context of time-based pay, the minimum may be reduced if the employee's hours worked in terms of weeks of work are less than 40 hours.
Vacations and other guarantees are fully provided to employees on a time-based wage system, as well as on a piece-rate wage system or other payroll methods used.

The duration limitation does not apply or is applied conditionally for some categories of activity, for example, for rotational work. In addition, individual regulations may establish reduced standards for the length of the working week or working day.

In general, the time system itself is almost always considered standard with the corresponding legal regulation. However, certain principles of time-based remuneration can also be applied when using other systems implemented in the organization, combining with them and complementing them. Such a combination can significantly increase the overall flexibility of the business and provide the manager with additional tools for implementing effective personnel policies and ensuring high level staff work.

Types of time wage systems

Mainly isolated the following types time-based wage system:

Direct or simple time wages. This system is considered the simplest among all possible time payment systems. It provides for a direct correlation of time worked with the level of wages. Wages are calculated at a tariff rate in strict accordance with hours worked. This system is extremely simple in the application of accounting and does not require any additional human resources for its implementation in addition to the grid of tariff rates and time sheets.
Time-based bonus system of remuneration. The features of the time-bonus wage system suggest the presence of additional incentive factors that can increase the overall level of employee earnings, depending on the fulfillment of the requirements determined by the bonus procedure. They may concern both compliance with or exceeding production standards, as well as the employee’s long service or other aspects of his activity that require effective rewards. This system is devoid of many negative features; it is simple, but it also requires great effort to assess the quality of the employee’s work and preliminary documentary preparatory actions.
Time-based piecework wages. This mechanism payment is also called a mixed system and includes the application to the employee of both piecework and time-based wage standards. In particular, the introduction of such a mechanism is often practiced in production in case forced downtime, or can be applied to workers whose positions require not only the fulfillment of certain quantitative performance indicators, but also the conduct of activities that are difficult to quantify.
Salary system of remuneration. It involves establishing not hourly standards for the employee to pay for work time, but providing a certain monthly salary, the amount and size of which are directly equated to the number of hours actually worked by the worker. That is, payment is calculated based on the results of the month or other terms of payment of wages and, if the employee fulfills all working time standards, is provided in full. Otherwise, a percentage change is made depending on the time the worker is absent from the workplace and released from work duties.

A time wage system may also have various shapes working time recording. In particular, the most common is the hourly wage system. However, on many modern enterprises, which are equipped with specialized access equipment, it is also possible to use more accurate minute-by-minute or even second-by-second systems for calculating the duration of workers’ presence at the workplace. In other situations, weekly or monthly payment may be applied without careful consideration of the time actually spent at the workplace.

Advantages and disadvantages of a time-based wage system

In general, the advantages of time-based wages include:

Stability of workers' earnings. Employees on a time-based payment system are confident that they will receive their earnings in the expected amount and regardless of additional negative factors, such as breakdown or wear and tear of equipment, poor health or other extraneous problems.
Low staff turnover. Statistics show that employees working on a time-based wage system are much less likely to change jobs compared to piece workers, since they expect a long career and the possibility of promotion in order to increase pay, while piece workers are quite simply increase your own production.
Efficiency in the face of the complexity of labor regulation. In some cases, piecework payment cannot be applied simply because it is impossible to effectively and adequately calculate the volume of goods produced or services rendered. This may be due both to the excessive complexity and high cost of such calculations, and to the very nature of the worker’s work, which does not involve the use of quantitative indicators for evaluation. However, time payment may apply to most existing species work, while piecework has many limitations.
Lack of negative motivation. Teamwork on a time-based payment system is much more effective than on a piece-rate system, since the main way for workers to increase their salaries in this case is to directly benefit the organization, which is much better done in cooperation with other employees than by increasing personal productivity .
Ease of accounting and maintaining personnel policies. Compared to piece-rate payment systems, time-based payment systems also have much greater simplicity in maintaining records and documents, as well as calculating wages in general. This reduces the burden on the enterprise’s accounting department, and also avoids additional costs associated with the implementation of accounting systems and assessment of production or other indicators of workers.

The disadvantages of time payment in this way include the following features:

Low level of motivation. Due to the fact that employees receive payment depending on the time spent at the workplace, their work efficiency decreases since, regardless of the efforts made, they will receive the same income. To a certain extent, the use of piecework-time wages or the bonus nature of wage calculations helps to neutralize the risks of this shortcoming.
High collective responsibility with low labor justice. An extremely common phenomenon in the case of time-based wages is a significant difference in the effort put into work between employees. Thus, some employees may end up doing the work of several others, while the latter neglect their job duties. But their wages, in accordance with the principles of using time-based labor, will ultimately be the same.
Inefficiency with high staff turnover, production nature activities and low requirements for the qualifications of workers. In particular, if there is no shortage of personnel, and the activities of the majority of workers can be easily and without unnecessary costs assessed, a piece-rate wage system can be much more justified than a time-based wage system, taking into account its risks.
Low level of effectiveness in case of emergency or urgent need. With a piece-rate wage system to solve emerging problems important issues It is possible to use the progressive nature of payment, while with time-based payment it is quite difficult to motivate employees to achieve urgent goals.
High risks. Regardless of the practical state of the organization, the piecework system of remuneration, and, in particular, the salary system, imposes on the employer the obligation to provide for workers wages. While tariff-free payment systems may imply a direct correlation between enterprise profits and employee salaries.

Taking into account the above features of the time-based system, the employer and HR specialists should always remember that it can be used in conjunction with other options for ensuring payment of workers and can be combined between them. An employer can establish different payment mechanisms and methods for different categories of employees.

The process of implementing and processing time-based wages

To use time-based wages, the employer should first establish in local regulations the procedure for tariff rates and employee evaluation, as well as mechanisms for recording working hours. This information must also be recorded in the employment contract with a specific employee and with all employees of individual business units. At the same time, information about time payments should always be available to the worker.

It is allowed to change the principles of remuneration and transfer workers from a piece-rate system to a time-based one. To do this, changes must be made to the individual employment contract with the employee in the format of an additional agreement on time payment. This will avoid unnecessary risks.

The trend towards reducing the use of piecework wages is noticed all over the world, since time-based payment is a more progressive and socially effective technique.

In general, given the fact that time payment is one of the most widespread in the world, its use is good choice for most situations in which piecework payment will perform poorly. In particular, for non-productive positions, managers, accountants and other workers of a similar nature, it is optimal.

However, time wages can also work well in cases where they are assigned to employees engaged in production. This can reduce the volume of defects and the rate of equipment wear, and by reducing the psychological burden on workers, it may not even affect the overall production volumes.

For some positions, especially those related to repairs or eliminating the consequences of negative situations, the use of a time-based payment system is much more justified than the use of piecework mechanisms.

Hello! In this article we will talk about piecework wages.

Today you will learn:

What is piecework wages and where is it applied?
What types of piecework wages exist;
What are the prerequisites for transferring to piecework wages;
Advantages and disadvantages of this type of payment.

One of the most important aspects organization of labor activities in the company - choosing the form of monetary remuneration for employees. We are most familiar with the time-based form, when salaries are calculated depending on the salary and the number of days worked. However, such a scheme is not suitable for many types of activities where it is extremely important for the employer to motivate the employee to improve performance, and also where it is possible to keep quantitative records of the work performed. Then another common form is used – piecework wages.

What is piecework wages?

Piece wages – This is a type of monetary remuneration for an employee where his earnings directly depend on the units of production he produces or on the volume of work performed, provided that the result of his work can be calculated and the quality can be tracked.

Download a sample piecework wage agreement

For most types of work, only one of two forms of payment is possible. For example, administrators, doctors, accountants, security guards, teachers are on time-based form. Piecework wages are typical for such professions as turner, welder, taxi driver, and member of a repair team.

However, there are often cases when, to further motivate an employee, an employer uses a calculation procedure that is characteristic of both forms. The employee is paid a monthly fixed salary, most often small but guaranteed, so that the employee has something to live on in case of the “off season”. In addition, the employee receives payment per unit produced or a percentage of sales.

Example. In many clothing or electronics stores, where sales volumes largely depend on the active work of the sales assistant, the company, in addition to the salary, may pay him a certain percentage of the cost of the goods sold. Owners have long come to the conclusion that using the carrot of a monetary reward is much more effective than threatening them with the stick of dismissal for being idle on the sales floor.

Concepts inextricably linked with the word “piecework”

Production rate - the number of units of products established by the company that must be manufactured within a certain time frame. Usually they talk about hourly, daily and monthly norms.

Tariff rate (salary) – minimum guaranteed monthly wage for a given skill level. Indicated in . The salary is only part of the salary, which, in addition to the salary, may include all kinds of bonuses and social benefits.

Price - this is the amount of earnings for one unit of work performed or products produced. It is calculated through the ratio of the tariff rate to the production rate.

Tariff schedule - tariffication of wages based on the complexity of the work and the qualifications of the employee. There are ranks or categories (for example, engineer of the first category or piece worker of the 5th category).

Calculation of piecework wages

Let us give two examples of such calculations.

Example 1. Daily rate of processing parts for milling machine for a milling machine – 120 pieces. The daily rate for the tariff is 1200 rubles. In one month, the employee processed 2,400 parts.

The piece rate is calculated by dividing the daily tariff rate by the daily rate for parts:

R = 1200/120 = 10 rubles/pcs.

In this case, the monthly salary of the master will be:

Z = 10*2400 = 24000 rub.

Example 2. The calculation looks somewhat different when the standard determines not the number of products, but the time period.

The time limit for using the machine is set at 30 minutes per operation. The hourly tariff rate is 150 rubles. During the month, the employee performed 600 operations.

We calculate the piece rate:

R = 150*30/60 = 75 rubles/operation

Monthly earnings will be:

Z = 75*600=45000 rub.

Types of piecework wages for workers

The existence of several types of this payment is explained by the diverse specifics of existing work where piecework payment is used.

Let's look at its main types with examples:

Piece payment type	Characteristic	Example
Direct piecework	Salaries are calculated based on completed volumes using fixed piece rates established in accordance with the employee’s qualifications	Piece price for seamstress highest category is 50 rubles per shirt. In a month she sewed 600 shirts. Her piecework earnings per month will be 30,000 rubles
Piece-bonus	Provides for the payment of bonuses for exceeding production standards established by the company. Indicators for bonuses can be improved labor productivity, product quality, reduction in the number of defective products, as well as money spent	The monthly production rate for leather shoe upper manufacturers is 100 units. The company purchases leather with a reserve, but at the same time has established a monthly collective bonus in the absence of damaged material
Indirect piecework	Used to pay workers who monitor uninterrupted operation equipment. Thanks to them, essential workers are not idle due to equipment breakdowns. To calculate earnings, the indirect piece rate is multiplied by the number of units produced by the main workers	A master adjuster serves several workshops. The tariff rate of the master is 15,000 rubles per month. Over the course of a month, the workshop produced 2,000 units of product against a norm of 1,500 units. The indirect price will be the ratio of the foreman’s tariff rate to the workshop rate: 15000/1500=10 rubles/unit. The master’s salary will be: 10*2000=20000 rub.
Piece-progressive	A very motivating system, it is used to sharply increase production. Until the production rate is reached, calculations are carried out using fixed piece rates. When production exceeds standards, payment is made at increased prices	The turner turned 300 parts in a month at a rate of 250. According to piece rate he receives 80 rubles per part. If the plan is exceeded, each detail is paid in the amount of 100 rubles. The basic salary of a turner: 250 * 80 = 20,000 rubles. Taking into account exceeding the norm: 50*100=5000 rub. Total salary of a turner: 20000+5000=25000 rub.
Chord	It is used when payment is made not per unit, but per stage of work or for all work performed. The work order also indicates the start and end dates of the work. Used in construction, agriculture, and transport. Can be either individual or team	An agreement on interior house work is concluded with a team of finishers. All work is divided into stages (carrying out electrical wiring, plastering walls, laying floors, etc.). Each stage of work is accepted by a responsible person, who determines whether the work meets quality standards, after which a settlement is made with the team
Mixed	Mixing piecework and time-based wages. It is used when the employer is interested in the constant presence of an employee at the workplace, while his activity largely determines his work efficiency	A nail technician has a fixed salary for being in the salon at certain hours. He will receive this money even if for the whole day, say, due to bad weather, not a single client comes to him. In this case, the master receives a percentage of the amount paid by the client for each work performed.

The procedure for transferring to piecework wages

An enterprise can switch to piecework wages if the necessary prerequisites are met:

Well-established accounting of manufactured products or services provided;
Presence of an uninterrupted supply of materials and everything necessary for work;
Effective quality tracking;
Developed logical tariff systems and local standards;
The ability to take into account quantitative data on the performance of each employee separately;
The existing need at this level of company development is to increase the level of production (sales) many times over.

The conditions for piecework wages are specified in individual and collective labor contracts, work acceptance certificates, work orders, as well as in the Regulations on remuneration. The latter is understood as a normative act that is valid only within the enterprise, which stipulates the procedure for calculating wages, the timing of payment of remuneration to employees, the rules for paying bonuses and allowances.

When approving such a document, the employer proceeds from the financial capabilities of his organization and also takes into account the norms of the Labor Code.

All important information must be registered in Employment contract, preferably in as much detail as possible.

Advantages and disadvantages of piecework wages

If an employer transfers his workers to piecework, he must be prepared for some difficulties. However, the advantages of this form are also undeniable.

Let's look at them:

Advantages	Flaws
Possible sharp increase in production or sales volumes	Possible deterioration in product quality due to rush
Inspiration for the employee, he can feel like a “mini-entrepreneur” thanks to control of his own earnings	The need for stability of all conditions for optimal performance (materials, etc.)
Ability to track everyone's work individually	The emergence of an employee’s reluctance to spend time on anything other than piecework (for example, cleaning workplace, clean equipment)
The opportunity to arouse competitive passion among employees and increase the overall tone in the team	Possible disruption of process steps
With a team chord system, mutual assistance increases, since the entire team is interested in completing the work as quickly as possible	Possible violation of safety standards
An impetus for self-development, if an increase in production depends on personal qualities employee	No savings in consumables

There is no ready answer as to what form of wages or what type of piecework will be best. Everything is very individual and, above all, depends on the type and conditions of the organization’s activities. The same system can work differently in two teams. It seems to us that only with experience, through trial and error, will the employer be able to develop the required diagram monetary motivation for its employees.

Earning money is the fundamental reason for employment. All employees want to receive as much money as possible for the work done. But employers are not always ready to pay large salaries to their subordinates. They should think through a variety of systems by which the work done will be assessed. Thanks to this, it will be possible to pay monthly as much as this or that personnel deserves.

This means that it is necessary to study possible forms of remuneration. This will allow you to fully understand what conditions for calculating earnings the employee agrees to. For example, time-based bonus wages are extremely popular. This is a form of salary calculation that is not only common among employers, it is also loved by subordinates. But why? What features does it have? What should you pay attention to first?

Different systems and forms

Of course, in Russia there are various payment systems for work performed. Depending on the chosen option, the citizen will, under certain conditions, receive earnings at the end of the month. Now there are all two major schemes that help to calculate cash employees: piecework and time-based.

Direct piecework

Most simple circuit payment for work done. In the direct piecework form, funds will be paid in direct proportion to services rendered or work performed.

In this case, the employee will receive money only for how much he has completed, in accordance with the set prices. For example, for a unit of output a person receives 30 rubles. To earn 30,000, you need to create 10 thousand manufactured items. If a subordinate can, he has the right to increase or decrease his earnings.

This form is used when company management wants to increase productivity. The downside is that quality usually suffers as employees strive to do more, not better.

Piecework with bonuses

There is such a thing as a piecework-bonus wage system. This is a more acceptable option used by companies for which quality also plays a certain role. The form of such calculation of earnings is considered complex. Why?

It provides for the accrual of a bonus in certain amounts for exceeding the established one at the enterprise. This takes into account the quality of products or services provided. That is, simply working more and getting extra money will not work.

Piece-progressive

There is another option: Forms of remuneration provide for a piece-rate and progressive system for calculating funds to employees of companies and enterprises.

In this situation, employees will not be given bonuses for exceeding the established norm. Instead, the cost per unit of product or service provided will increase. Of course, taking into account quality indicators.

More precisely, products produced within the normal range will be paid at the normal rate. But everything that is produced additionally comes with increased payment. Please note that these prices cannot exceed the established regular tariff by more than 2 times.

Chord system

The next type of earnings calculation is the lump sum form. Not a very common option, but it does happen. In this case, funds are paid in accordance with established standards production and indicating the time at which certain work must be completed.

Most often, when time costs for production are reduced using the lump-sum payment system, employees may be awarded a bonus. This is a common practice found among employers.

Indirectly

What else should you pay attention to? The last type of piecework form of cash accrual is the indirect piecework system. What does she mean? This is a kind of synthesis of piecework and time-based payment. It is usually used to calculate monetary compensation for employees representing secondary personnel. Those who help the main production.

Cash is accrued for the completed volume of production, taking into account the quality of the products. But this takes into account exactly how many units of goods the main employee made. The faster he works, the higher the earnings of non-essential personnel. A very difficult system that is not used very often.

Given the time

This concludes the list of piece-rate options for calculating funds to employees. What else can an employer offer its subordinates? For example, paying for work according to a completely different scheme.

Time-bonus wages are one of the forms of the time-based system. This is the most popular and common scenario among modern companies. It has its own characteristics that allow you to increase your earnings without much difficulty.

There is also a direct time system. It has no significant features. There are no other forms of calculating earnings in Russia. Time-based wage systems are common in the country, but, as you can see, there are only two varieties. What features does each option have? What should employees pay attention to?

Just by time

First, you need to consider the most common option for paying employees. We are talking about a simple time-based system. It has already been said that such a scheme does not have any significant features.

Payment is made solely based on time worked. Employees receive money based on the cost of one hour of work. That is, if a person worked 6 hours, he will receive money only for this time. The amount of work performed is not taken into account. As is the quality of the services provided.

A salary calculator will help you calculate how much a subordinate will receive in this case. But everyone is able to calculate their own earnings using a simple time-based system. To do this, you need to find out the tariff that is charged for 1 hour of labor, then multiply it by the time worked. The amount received is the salary.

On time and with a bonus

But there is another pretty one interesting option settlements with subordinates. Time-based bonus wages are a form of accrual of funds for the performance of job duties, taking into account time and some other factors.

Without fail, the employee will receive a salary based on the time worked. But in addition he will be paid a monthly bonus (optional) for the quantity and quality of services provided and goods produced.

That is, the longer and the more better employee copes with the assigned tasks, the more money he will receive at the end of the month. As a rule, the amount of the bonus is set by the enterprise. And it is paid to all employees who deserve it.

Perhaps this is all that time-based wage systems provide. But the employer must take into account some other features. For example, keep strict records of hours spent performing official duties. How to do this correctly?

Time tracking

If the company has chosen a time-based system for calculating earnings, it will be required (a sample filling is presented in the article). The point is that such documentation must be maintained in every company where earnings are based on the duration of work. Moreover, each employee must have a separate timesheet.

This document records all periods worked, as well as breaks, absences, delays and vacations. Weekends are also celebrated. A variety of techniques can be used to track working time. For example, the employer independently records the time at which the employee arrived, and also records the end time working day. You can use special equipment such as turnstiles.

In any case, the employer maintains an individual time sheet for each employee (a sample of the filling was shown). At the end of the billing period (end of the month), the accountant accrues funds to employees according to this document in certain amounts.

Now it’s clear how work can be paid in Russia. Each employer chooses the option for calculating earnings that suits his company. Most often in practice there is either a non-tariff form or time-based payment.