Concept of Piece rate Wages System

 There are two types of wages system. One is time rate wages system and second is piece rate wages system. There are many merits and demerits of each system so it depends on organization that which system they choose according to there production process. 

Piece rate wages system

The process in which wages are paid to workers on the basis of output produced by them this process is called piece rate wages system. 

Wages N multiple R. 

N- Number of unit produced. 

R- Rate per unit. 

Advantages 

1. It supports in the maximization of production. 

2. It is fair to all workers who work in organization. 

3. It inspires all efficient workers to do more and get more. 

4. In this process per unit cost of product is low. 

Disadvantages 

1. It requires an up to date accounting system. 

2. Many workers feel insecure towards their future so they do not internally satisfied. 

3. It requires strict supervision because workers do not care the feature of product. 

4.  It also produce more wastage that harms organization.