Differential Piece Wage System and Difference between Taylor and Fayol.

April 18, 2020

Good morning boys! Today we will complete the techniques of Taylor and comparison between Taylor and Fayol.

Learning outcomes-
At the end of the topic, students will be able to:
1) Explain Differential Piece Wage System.
2) Differentiate between Taylor and Fayol.

Q.44 Explain Differential Piece Wage System as a technique of scientific management. (4)
Ans- 1) It is a method of wage payment in which efficient and inefficient workers are paid at different rates.
2) It is the strongest motivator for the workers to reach standard performance because in this technique incentive is directly linked with productivity.
3) Taylor has suggested two types of peace rates .One is higher piece rate for those workers who perform upto or above the standard output and lower piece rate for those workers who produce less than the standard output.
4) The objective is to differentiate between efficient and inefficient workers and to suitably reward the efficient workers. (Wages= Actual Output×Wage Rate)
5) For example- If the standard output per worker per day is 50 units and wage rate is rupees 2 per piece for producing 50 or more units and it is rupees 1.50 per piece for producing less than 50 units. Then the calculation for two workers A and B who produce 40 and 70 units are as follows-
Worker  A is rupees 60( 40×1.50) and worker B is rupees 140 (70×2). The gap of 30 units only will amount to a loss of rupees 80( 140- 60) to worker A. This loss will be the strongest motivator for worker A to reach the  standard  performance the next time.

Q.45 What are the similarities between Fayol and Taylor? (3)
Ans-1) Both aim to maximize efficiency.
2) Both stress on healthy competition between management and employees for the achievement of organisational goals.
3) Both give priority to organisational interest over individual interest .
4)Both advocate division of work for specialisation.
5) Both have emphasised to overcome managerial problems in a systematic way.

Q.46 Differentiate between Fayol and Taylor. (6) ( Write in tabular form)
Ans- 1) Perspective- Fayol's perspective was on top level of management whereas Taylor's perspective was on the shop floor level of a factory.
2)Unity of command - Fayol was a proponent of unity of command whereas Taylor did not feel that it is important as under functional foremanship a worker received orders from eight specialists.
3) Focus- Fayol focused on improving overall administration whereas  Taylor focused on increasing productivity of the workers.
4) Expression- Fayol used the expression 'General theory of Administration.' Taylor used the expression 'Scientific Management'.
5) Applicability- Fayol's principles are applicable universally whereas Taylor's principles are applicable to specialised situations.
6)Basis of formation- Principles were based on his personal experience whereas Taylor's principles were based on observations and experiments.
7) Personality - Fayol was a Practitioner whereas Taylor was a Scientist.

Note- Many new techniques are developed after scientific management like Operations Research, Just in time, etc. The latest development in scientific management is LEAN MANUFACTURING which means robotics and computers are being used in production and other business activities which has increased productivity levels.

Let us revise Taylor's techniques through this video:

CASE STUDY

 ' Scientific Management means knowing exactly what you want men to do and seeing that they do it in the best and cheapest way.'  Taylor developed various techniques for application of scientific management principles and was able to achieve a three fold increase in productivity. One of the techniques helps to determine the number of workers to be employed, frame suitable incentive schemes and labour costs. Another technique recognises those workers who are able to accomplish the fair day's work and is based on the premise that efficiency is the result of the joint efforts of the managers and workers. Quoting the lines from the above paeagraph, identify and explain the two techniques of scientific management. (5)