A good wage incentive plan should have the following characteristics.
Administrative simplicity: The incentive system should be simple and must be easily understood by the workers and their representatives. An incentives scheme, which can be understood, only by engineers and mathematicians or a scheme which involves the use of complex formulate or references and cross-references is sure to fail. The incentive scheme should be such that workmen can calculate their own earnings easily and quickly.
Minimum clerical work: The system should fit into existing system of production and cost control. It should not involve any significant addition to the clerical work.… Read the rest