Staff Remuneration — Practice Quiz

It provides a sense of economic security to workers

Step 1: Under the Time-Rate System, workers receive a fixed and regular income regardless of output. Step 2: This regularity gives workers a sense of economic security — they know in advance how much they will earn and can plan their expenses accordingly. Step 3: Option A is a merit of the Piece-Rate System, not the Time-Rate System — time wages do NOT incentivise producing more. Step 4: Option B (easy per unit cost calculation) is also a merit of the Piece-Rate System. Step 5: Option D (less supervision) is also a merit of the Piece-Rate System. In fact, the Time-Rate System requires MORE sup

₹10,000

Step 1: Under the Piece-Rate System, wages depend on the number of units produced, not the time spent. Step 2: Formula: W = N × R, where N = Number of pieces produced and R = Rate per piece. Step 3: W = 50 × 200 = ₹10,000. Step 4: Option A (₹5,000) would be the result if only 25 units were produced. Step 5: Option B (₹15,000) and Option D (₹2,500) are both incorrect calculations with no basis in the given data. This system directly rewards worker effort.

Quality of work tends to decline as workers focus only on quantity

Step 1: In the Piece-Rate System, workers are paid based on the number of units they produce. Step 2: This creates a temptation to rush through work to maximise earnings, which leads to poor quality output. Step 3: Option A is incorrect — the Piece-Rate System actually does provide motivation to increase output. Step 4: Option B is incorrect — in the Piece-Rate System, per unit labour cost is actually EASIER to calculate since wages vary directly with output. Step 5: Option D is incorrect — trade unions OPPOSE the Piece-Rate System because it creates jealousy between efficient and inefficient

Machinery and equipment used are very expensive and delicate

Step 1: When machinery is expensive and delicate, rushing work can cause damage and huge financial losses. Step 2: The Time-Rate System discourages rushing since workers are paid for time, not output — this protects costly equipment. Step 3: Option A describes conditions suitable for the Piece-Rate System, where output is measurable and repetitive. Step 4: Option B also describes Piece-Rate suitability — that system is used when quantity matters more than quality. Step 5: Option D describes a situation suitable for the Piece-Rate System. The Time-Rate System is appropriate when individual outp