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Is an output-based payment system in which workers are paid a flat rate (piece rate) for each item/operation completed. It is common for the piece rate to be set through work study and for workers to be guaranteed a fall-back rate of pay if machine breakdown or the non-availability of materials makes it impossible for them to earn piecework. Under differential piecework systems, the piece rate can vary for each unit of output, typically with a lower rate for every additional unit above a predetermined level, the aim being to stabilize production at an optimum rate. Piecework is a feature of traditional manufacturing industry such as clothing, footwear, and engineering and operates most effectively in industries where output can be easily measured and the rate of production is controlled directly by employees, either individually or in small workgroups. Although piecework can be highly effective in motivating employees, a number of problems have been identified by researchers. These include poor quality of output, the neglect of work tasks for which workers are not paid, contravention of safety standards, and the manipulation of performance targets in order to maximize or stabilize earnings. Piecework can also generate industrial relations problems as workers and management dispute what are reasonable and attainable piece rates. [See degeneration.]

Subjects: Human Resource Management.

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