Piecework: A New Era of Task-Based Pay
Written by: Carin Vreede
Last updated: 1 June 2023
Table of contents
What is piecework? (Quick answer)
At its core, piecework is a type of pay structure in the industrial revolution where employees are paid for each job they complete or each unit produced instead of receiving wages based on working hours. piecework rates varied based on products.
Piecework is based on the idea that some tasks can be completed more quickly and efficiently with fewer workers, and employers are willing to pay more for these jobs. These workers also work faster. There is also a minimum wage in the piecework system.
How does piecework apply?
Piecework can be applied in various ways, depending on the nature of the job.
Piecework in Long, One-Time Tasks
Some jobs involve tasks completed in one day, such as construction or landscaping. Piecework pay makes sense for jobs like these since it rewards the workers for their efficiency and encourages them to complete the job quickly.
Piecework in Small, Repetitive Tasks
Jobs in manufacturing or assembly line work typically involve many small, repetitive tasks that are done repeatedly throughout the day.
Piecework jobs in these industries may involve employees being paid to complete a set number of items, such as putting together 100 boxes per hour. Piecework pay in this situation incentivizes employees to work quickly and accurately.
Where might piecework be not applicable?
Although piecework can be beneficial for certain types of jobs, there are situations where piecework may need to be clarified.
Piecework pay is generally unsuitable for jobs requiring a high level of skill or expertise. Jobs like engineering or lawyering often require problem-solving, creativity, and other skills difficult to measure in piece rate pay.
Complex and Time-taking Jobs
Piecework is also inappropriate for jobs where the tasks are complex or take a long time to complete. Piece rates are based on output, so if the job takes several hours, piecework may not be the best option.
Long Tasks with Low Output
Piecework is not suitable for jobs that require a long time to complete and have low output. For example, piecework may not be suitable for a job that requires an employee to spend an hour troubleshooting and fixing a complicated machine if the outcome is only one fixed machine.
Piecework jobs can also be difficult to manage if the tasks are spread out over multiple days or weeks.
Benefits of piecework for businesses
Piecework has several benefits for businesses, particularly if the job involves long tasks with high output.
Increased Productivity: Piecework encourages employees to be efficient and productive, and it eliminates the need for managers to keep track of time cards or hours worked. Piecework encourages workers to complete their tasks as quickly and accurately as possible, which can help increase productivity overall.
Higher Output: Piecework can also lead to higher output, as it rewards employees for completing more tasks in a shorter time. This can help businesses get more done in a shorter amount of time, leading to increased profits.
Higher Worker Satisfaction: Piecework can also lead to higher satisfaction among workers, as piecework rewards them for their hard work and efficiency. Piecework also gives workers more autonomy over their work, as they can choose how to complete the tasks and be rewarded accordingly.
Easier Management: Piecework is less complicated and easier to manage than hourly wages. Piecework jobs don't require employees to keep track of hours or fill out paperwork, making it simpler for managers to monitor their workers.
Cost Savings: Piecework is generally cheaper for businesses since employers only have to pay for the output of a job rather than the hours worked. Additionally, since piecework jobs are paid on output, businesses can save money by not hiring additional employees if the work requires more manpower.
Benefits of Piecework For Employees
Piecework may also offer advantages for employees looking for a job.
Flexible Work Schedule: Piecework jobs may offer more flexibility in terms of hours worked since employees are not required to work a set number of hours per week. Piecework jobs may also be more flexible in terms of location since piecework can often be done remotely or from home.
Payment Based on Performance: Piecework jobs allow employees to control their earnings and be rewarded for their performance. Piecework encourages workers to strive for excellence, leading to higher pay over time as they become more efficient at the job.
No Timecard Tracking: Piecework eliminates the need for employees to track their hours and submit timecards, simplifying the process of getting paid. Piecework also means that employees are not required to work a certain number of hours each week, allowing them greater freedom in managing their time and workload.
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Potential drawbacks of piecework
Lower Quality: Piecework may lead to lower quality output since piecework rewards employees for completing tasks quickly rather than accurately. Piecework is also not ideal for jobs that require high levels of skill or expertise since piecework does not reward the quality of work.
Lower Earnings: Piecework jobs may also offer lower earnings than hourly wages, particularly if employees cannot complete tasks quickly and efficiently. Piecework also means that employers have no obligation to provide benefits such as health insurance or vacation days, which can reduce the overall pay.
Various methods are used to compensate employees, and Piecework is one of the most common. It is a pricing system for Pay-Per-Yield (PPY) type work. It considers the varying skill levels of employees and pays them based on their production.
While piecework has many benefits, businesses should be cautious of its potential drawbacks before implementing it within their organization. We hope this article has helped you learn about piecework. Thanks for reading!
Frequently Asked Questions
Piecework was originally designed to incentivize workers to increase production by rewarding them for how much work they completed.
Piecework jobs can range from manual labor, such as manufacturing or assembly line work, to more specialized work, such as programming or data entry. Piecework jobs can be done remotely or from home as well.
Piecework plans typically pay employees for each unit of work they complete, such as a product manufactured or a task performed. Piecework jobs can also be paid by the hour, but employers only pay for actual hours worked and not for any idle time.
With years of experience in the HR field, Carin has a lot of experience with HR processes. As a content marketer, she translates this knowledge into engaging and informative content that helps companies optimize their HR processes and motivate and develop their employees.
Please note that the information on our website is intended for general informational purposes and not as binding advice. The information on our website cannot be considered a substitute for legal and binding advice for any specific situation. While we strive to provide up-to-date and accurate information, we do not guarantee the accuracy, completeness and timeliness of the information on our website for any purpose. We are not liable for any damage or loss arising from the use of the information on our website.
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