A-LevelBusiness StudiesHuman resource management9609/12 · May/June 2022 · Q15 Marks
Define the term 'piece rate'.
- (a)Define the term 'piece rate'.[2]
- (b)Explain two advantages to a business of using a time based payment method.[3]
Mark scheme
Marking points from the official mark scheme (May/June 2022). The mark or mark type is shown in brackets.
- [1] Piece rate payments are payments made to employees based on the number of units produced by each individual
- [1] Payment by results
- A business only pays for the hours worked, unlike for an employee who receives a fixed payment per week or month regardless of the length of time worked
- This method can avoid some of the quality issues that can arise when using the e.g. piece rate payment method – fast work can lead to poor quality
- It is easy for a business to calculate – it reduces administrative costs/time for a business
- A business can set the number of hours per week that should be worked and can therefore organise the number of workers in terms of when and how long they are required and know plan its costs
- Productivity may increase when a business requires it if workers are willing to work overtime to get more money
- Productivity may increase because it improves motivation in employees; encourages them to work harder for a business
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