In an organization where the Halsey plan is in operation, Shrameek Babu can earn ₹27.00 on the job for which he takes 8 hours at an hourly wage rate of ₹3.00 per hour.
Calculate what will be his earning if the Rowan plan is adopted?
Answer (2)
To calculate Shrameek Babu's earnings under the Rowan plan, we need to understand how the Rowan premium plan works.
The Rowan plan is a popular incentive wage system in which the worker is paid a bonus that is proportional to the standard time saved.
Here's how you can calculate the total remuneration under the Rowan plan:
Standard Time (T): This is the time that is initially estimated to complete the job, given as 10 hours.
Actual Time Taken (t): This is the time that Shrameek Babu took to complete the job, which is 8 hours.
Hourly Wage Rate (R): The wage rate per hour is ₹3.00 per hour.
Calculate Basic Pay: Basic pay is calculated using the formula: Basic Pay = t × R = 8 × 3 = ₹24.00
Calculate Bonus Component: In the Rowan plan, the bonus is calculated as: Bonus = ( T T − t ) × t × R Substitute the values: Bonus = ( 10 10 − 8 ) × 8 × 3 = ( 10 2 ) × 8 × 3 = 0.2 × 24 = ₹4.80
Total Remuneration: Finally, the total earnings are the sum of basic pay and the bonus: Total Remuneration = Basic Pay + Bonus = ₹24.00 + ₹4.80 = ₹28.80
Shameek Babu's earnings under the Rowan plan would therefore be ₹28.80. This amount reflects the combination of the basic wage and the bonus for completing the job faster than the standard time.
Shrameek Babu's earnings under the Rowan plan would total ₹28.80, which includes his basic pay of ₹24.00 and a bonus of ₹4.80 for completing the job faster than the estimated time. The Rowan plan offers a bonus based on the time saved compared to a standard time. This incentive encourages efficiency in the workplace.
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