Product Code Database
Piece work or piecework is any type of employment in which a worker is paid a fixed piece rate for each unit produced or action performed, regardless of time.
Some industries where piece rate pay jobs are common are agricultural work, cable installation, call centers, writing, editing, translation, truck driving, data entry, carpet cleaning, craftwork, garment production, and manufacturing. Working for a piece rate does not mean that employers are exempt from paying minimum wage or overtime requirements, which vary among jurisdictions.
Employers may find it in their interest to use piece rate pay after examining three theoretical considerations; the cost and viability of monitoring output in a way that accurately measures production so that quality does not decrease is first. Variable skill level is second, where piece rates are more effective in a more homogenous workforce. Thirdly, there may be more invasive managerial relations as management attempts to test how fast the workers can produce.
Employees decide whether to work for piece rate pay if the relative earnings are high, and if other physical and psychological conditions are favorable. Some of these might be job stress, physicality, risks, degree of supervision and ability to work with peers or family members. Employees may also be more or less welcoming to performance pay depending on the leverage and risk. Leverage was defined as ratio of variable pay to base pay, and risk is the probability the employee will see increased benefits with effort. Workers tended to be suspicious of pay packages that were too heavy on variable pay and were concerned it might be a concession to remove cost-of-living wage adjustments or to secure wage rollbacks.
The fair rate is the amount that allows an average worker to be paid the minimum wage per hour if they work at an average rate. This must be calculated in a set way, a control trial is run to determine the average items produced by equivalent workers, this is divided by 1.2 to reach the agreed average figure, and the fair rate is set to ensure each worker achieves the minimum wage.
There are several software programs that determine the time that a trained operator should take to perform an operation. These make unit estimations based on the individual motions that an operator is required to make to complete a task. In a service setting, the output of piece work can be measured by the number of operations completed, as when a telemarketer is paid by the number of calls made or completed, regardless of the outcome of the calls (pay for only certain positive outcomes is more likely to be called a sales commission or incentive pay). Crowdsourcing systems such as Mechanical Turk involve minute information-processing tasks (such as identifying photos or recognizing signatures) for which workers are compensated on a per-task basis.
Frederick Winslow Taylor was one of the main champions of the piece rate system in the late 19th century. Although there were many piece rate systems in use, they were largely resented and manipulative. One of the most influential tenets of Scientific Management was Taylor's popularization of the "differential piece rate system", which relied on accurate measurements of productivity rates to create a "standard" production output target. Those who were not able to meet the target suffered a penalty and were likely fired. Taylor spread that in published papers in 1895, and the timed piece rate system gave birth to creating modern cost accounting and, as a result, modern corporate organization.J.C. Spender. (2006). "Frederick W. Taylor and John R. Commons: Two Views of Scientific Management". http://www.jcspender.com/uploads/Taylor___Commons_n29.pdf
There can be improper record keeping at the hands of supervisors attempting to cheat employees, to build piece rate systems that prevent workers from earning higher wages. That is often at the cost of both the worker and the enterprise, however, as the quality and the sustainability of the business will be threatened by decreases in quality or productivity of workers attempting to stay afloat. Put another way, if the payment for producing a well-made item is not enough to support a worker, workers will need to work faster, produce more items per hour, and sacrifice quality.Gregorio Billikopf "Designing an Effective Piece Rate". Agricultural Labor Management, University of California. http://nature.berkeley.edu/ucce50/ag-labor/7research/7calag06.htm
Today, piece work and sweatshops remain closely linked conceptually even though each has continued to develop separately. The label "sweatshop" now refers more to long hours, poor working conditions, and low pay even if they pay an hourly or daily wage labour, instead of a piece rate.
Flexibility: piece rate pay can offer flexibility to workers as they can often choose their own hours and work at their own pace, especially in jobs such as freelance writing or data entry.
Potential for higher earnings: skilled workers who are efficient in their tasks can potentially earn more through piece rate pay than through traditional hourly wages.
Risk of exploitation: some employers may set piece rates unfairly low, leading to workers being underpaid for their labor, especially in industries with low barriers to entry.
Lack of stability: piece rate pay may not provide a stable income, as earnings can fluctuate based on factors such as demand for the product or service and individual productivity levels.
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