groups: (i) time-payments, and (2) " payment by results,"
although there are many intermediate varieties, and disputes
often arise on the question whether a particular system is or is
not to be regarded as " payment by results."
(1) Under the time-work (or " day-work ") system, the work- er's remuneration varies with the time which he actually spends on the employer's business. Thus, carpenters and joiners in certain districts in the building industry in Great Britain have a time-rate of 2s. an hour, and the majority of grades on the rail- ways have time-rates varying from 655. per week upward. These time-rates are practically always fixed in relation to a definite number of hours in the week, and if a larger number of hours has to be worked, the hours in excess of the standard week are termed overtime, and are usually remunerated on a slightly higher hourly rate " time and a quarter," " time and a third," " time and a half " or " double time," for example. Extra pay- ment is also frequently made for work done during the week-end or at night (" night-shift "). The time-work system operates throughout a large number of trades, including the greater part of the building industry and the railway and road transport services, and almost the whole range of non-manual employment. In many other industries it is found side by side with various systems of " payment by results." In almost every time-work industry there are some piece-workers; and in almost every piece-work industry some time-workers. A particularly ob- noxious form of time-work is that known as " task-work," under which the worker is required to perform a definite amount of labour in return for a time wage, but receives no additional remuneration for higher output. This is strongly opposed by trade unions and does not prevail at all in organized industries in Great Britain.
(2) Under the term " payment by results " are comprehended many different methods of wage payment, the common factor among them being that, to a greater or Jess extent, the worker's earnings under them vary with the amount of output which he, either individually, or in conjunction with a group of his fellow- workers, is able to produce. The amount of work produced may not be the sole factor determining his remuneration under a system of "payment by results"; for such systems are very frequently, and in the organized trades usually, accompanied by guaranteed minimum or standard time-rates, which the worker is entitled to receive irrespective of the actual output which he produces. Strongly organized trade unions in many industries have consented to accept " payment by results " only on the condition that the standard time-rates of wages shall be guaran- teed irrespective of output (e.g. engineering).
The simplest form of " payment by results " is that known as " piece-work." Under this system, a price is fixed for each unit of the commodity upon the production of which the worker is engaged, e.g. if the worker is turning out screws, a price will be fixed per hundred, or per gross of screws, this price being calculated, in theory at least, according to the time which is estimated to be necessary for the performance of the operation in question. Sometimes, as in the " time logs " in the tailoring trade, the piece-work price is expressed not in terms of money, but in terms of hours, and the worker is paid for so many hours at the standard rate, irrespective of the time actually occupied on the job. " Straight " piece-work systems vary very much in complexity. Where the operations are simple, and the character of the goods produced uniform, piece-work prices can be laid down with almost mathematical accuracy; but as soon as pro- vision has to be made for a wide range of different products complications almost inevitably arise. These complications are of two kinds. The cotton industry in Great Britain is almost entirely a piece-work industry; but, despite the immense variety in the types of cotton goods produced and the variation in the times required for the spinning and weaving of different types of goods, piece-work rates can be devised to correspond with prac- tically mathematical accuracy to the time required for the job because of the high degree of standardization at which the industry has arrived. The piece-work lists agreed to by the weaving trade unions and the cotton manufacturers are immensely
complicated, and only skilled technicians are able to understand them. The universal acceptance of piece-work in the cotton industry is mainly accounted for by the fact that, under the system which has been adopted, a given amount of effort can be approximately relied upon under normal conditions to produce equivalent earnings.
This is much more difficult to secure in such an industry as engineering, where the products are far less uniform and where also the machinery which the worker is called upon to manipu- late is far less standardized, so that it may take very different times to do the same job on two different machines. The fixing of piece-work prices in the engineering industry in Great Britain is thereiore a constant source of friction, and it has been found impossible to express, in any tables corresponding to the cotton piece-work lists, the fair remuneration for most forms of work on engineering products. Piece-work prices in the engineering in- dustry are a constant subject of workshop and trade-union bargaining, and there is a strong resistance in many sections of the industry to the introduction of piece-work, largely because there is not, as in the cotton industry, any simple method of arriving at a fair price, and the system thus produces constant allegations of " speeding up " and " price-cutting " on the one side, and of " speeding down " and " restriction of output " on the other. Where, owing to special circumstances, it is regarded as impossible to fix in advance a piece-work price for a particular job, the worker, especially in the engineering and shipbuilding industries, is sometimes paid what is called a " lieu rate," e.g. " time and a third " or " time and a half " for the hours actually occupied on the job in lieu of a fixed piece-work price.
The other main system of payment by results is the system of " bonus on output." Under this system the worker is normally paid a time-rate irrespective of output; but, if the output exceeds a given minimum, an additional bonus, calculated upon this excess output, is paid. There are literally hundreds of different methods of calculating this bonus. The system to which the greatest attention has been attracted in recent years, both in Great Britain and in America, is the " premium bonus system " in its various forms, of which the two best-known are the " Hal- sey " and the " Rowan " premium bonus systems. Under both these systems, a " basis time " is fixed for the accomplishment of the piece of work in question. If the work is done in less than the basis time, the workman is paid, over and above his time- rate of wages, which is guaranteed, a bonus, proportionate in one way or another to the time saved. The effect of this method of payment is that, under both the Halscy and the Rowan system, the labour cost of the job to the employer falls with every in- crease in output, while at the same time the earnings of the workman increase, but not in proportion to the increase in output. The simpler of the two best-known premium bonus systems is the " Halsey " system, so called after its inventor Mr. F. A. Halsey, an American efficiency engineer. Under this system, the workman is paid a fraction, usually either a third or a half, of his time-rate for time saved. Thus supposing the time allowed for an operation is 12 hours, and a worker, whose time- rate is a shilling an hour, docs it in 9 hours, he will be paid at his time-rate for the 9 hours, and in addition will receive payment for a further hour or for an hour and a half, according to the par-; ticular variety of the system adopted.
The Rowan system is more complicated. The simplest way of explaining it is to say that for every 10% that is saved on the time allowed, the workman receives a 10% increase in earnings. The more complicated way is to quote the quite unnecessarily abstruse formula which is usually adopted by those who desire to explain the system. This formula is as follows:
Time saved
Bonus = .rr 7 X Time taken.
Time allowed
There are all manner of modifications of these two systems, in the direction both of greater simplicity and in that of greater complexity. The advocates of " scientific management " have been especially active in devising fresh variations in the method of payment, intended to stimulate the workers' productive efficiency
