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What is Emerson’s Efficiency Plan | Advantages, Disadvantages

Emerson's Efficiency Plan
Emerson’s Efficiency Plan

Meaning of Emerson’s Efficiency Plan

This scheme is designed to give encouragement to the slow workers to perform better than before. Under Emerson’s Efficiency Plan method, time wage is guaranteed. The standard output in this plan is fixed to represent 100% efficiency A bonus is paid to a worker whose efficiency exceeds 67%.

As efficiency increases, the bonus also increase gradually in steps at a stated rate so that at 100% efficiency, bonus would rise to 20% of wages.

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Beyond 100% the bonus increases at 1% of the basic rate for each 1% increase in efficiency. It can thus, be shown as below in a tabular form;

Efficiency Bonus
(a) Below 67% No bonus (only time wages)
    (b) 67% to 100% Bonus increases in steps and 20% bonus + 1% bonus for each increase of 1% in efficiency
               (c) Over 100% rises to 20% at 100% efficiency

Advantages of Emerson’s Efficiency Plan

1. It guarantees minimum time wages.

2. It is easy to understand and simple to operate.

3. It provides an incentive to beginners and even to those who are less proficient.

Disadvantages of Emerson’s Efficiency Plan

The incentive offered is considered too inadequate to motivate efficient and ambitious workers.

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