Q. Describe Emersons plan?
A standard time is set for the each job, and the efficiency of each worker is determined by dividing the time taken by standard time. Up to 67 per cent of efficiency, the worker is paid by time rate. Thereafter, a graduated bonus which amounts to a 20 per cent bonus at 100 per cent efficiency is paid to the worker. Thereafter, an additional bonus of 1 per cent efficiency.
The following example illustrates the method:
Standard output in 10 hours = 100 units
Rate per hour = Re. 1
Advantages of Emerson's efficiency plan:
a. Beginnings are encouraged to work hard under this plan.
b. Proper attention is paid to different kinds of workers.
c. It is easy to understand the Emerson's plan.
d. It possesses rational determination of efficiency.
e. The calculation of the efficiency is logical.
f. This plan can be applied to individual takes as well as group tasks.
Disadvantages of Emerson's efficiency plan:
1. Labour cost is increased due to payment of bonus on low level of the standard output.
2. There is low rate of bonus in the beginning.
3. It is a complicated plan as for as calculation is concerned.
4. It requires a lot of clerical work
5. Under this plan, management may be temple to fix a very high level of standard output.