Explain Differential Piece Wage System given by the Taylor with the help of an example.

Differential Piece Wage System:

(i) Taylor wanted to differentiate between efficient and inefficient workers.

(ii) He wanted to reward efficient workers and introduced two rates of wage payment for those who performed equivalent to or above standard and for those who performed below standard.

(iii) The difference in the wage was enough for the inefficient worker to be motivated to perform better.

e.g., Standard output (per worker per day) = 10 units

Wage rate I = Rs.2 per unit (for output < 10 units)

Wage rate II = Rs.3 per unit (for output > 10 units)

Difference in units produced= 2

Difference in wages = Rs.15