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Hello
Could you please help with below question?
An employee receives a bonus according to the Rowan scheme. The employee’s basic rate of pay in $ 6 per hour. The allowed time for the job was 1 hour and the employee completed it in 40 minutes.
What is the total payment for the job?
Working:
Basic rate 40/60 * $6 = $4
Bonus = 40/60* $6/60 *20 = $1.33Total payment = $5.33
I don’t understand the how the bonus has been calculated
Could you please help?
Thanks
Gabbi
Dear Gabbi
The bonus has been calculated on the basis of the assumption that is half of normal payment. For example if you earn 1 dollar for one piece less then specified time , the time you saved and made additional unit which enhanced company’s contribution. This additional benefit has been shared to you in the following calculation.
For bonus first the normal time was taken for a piece i.e 40/60 then multiply basic rate 6 = 4 dollar for a piece. Next how much time you saved is 20/60. If you multiply this to basic rate 4 the answer will be 1.3333. Actually this bonus is a reward for time you saved for making each unit. It will reward the employee and motivate them to act more speedily and thus saving more time. the bad news is efficiency may be ignored which will generate complaints.Muhanwar: Please do not answer question in this forum. It is the Ask the Tutor forum, and you are not the tutor 🙂
Instead, please do answer questions in the general F2 forum.Gabbi: Muhanwar’s answer is correct 🙂
Why you said the efficiency will be ignored? As my understanding, the efficiency ratio is 150% which is a good result as the labour complete a job in faster manner. Please correct me if Im wrong.
Dear Mr. John,
Why the total payment is rate per piece+bonus ($4+$1.33=$5.33) instead of basic rate + bonus ($6+$1.33=$7.33)?
if follow the pilot answer $5.33, is this mean the worker get lesser pay for the efficiency work?The basic rate is $6 per hour (worked), but since they only worked for 40 minutes they will only get 40/60 x $6, which is $4.
That is what Muhanwar was meaning when he said what he said – although they are being efficient, they are losing out by being efficient 🙂
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