Rowan plan (wage incentives) According to the Rowan plan, how is the bonus paid to a worker determined?

Introduction / Context:
Incentive plans aim to reward productivity gains fairly. The Rowan plan links the worker’s bonus to the share of time saved compared with the standard, moderating extremes compared to pure time-saved sharing.

Given Data / Assumptions:

• Standard time S, actual time T, time saved = S − T.
• Wage rate R per time unit.
• Rowan bonus formula uses the ratio (time saved / standard time).

Concept / Approach:
Rowan total earnings E are computed as E = T * R + Bonus, where Bonus = ( (S − T) / S ) * T * R. Thus, bonus is proportional to time saved as a fraction of standard time and scaled by actual time worked and rate.

Step-by-Step Solution:
Compute time saved: S − T.Form fraction of saving: (S − T) / S.Bonus = ((S − T) / S) * T * R; add to T * R to get total pay.

Verification / Alternative check:
At T = S, saving is zero → bonus zero; at T significantly less than S, bonus rises but at a moderated rate versus Halsey.

Why Other Options Are Wrong:
Option (a) misstates a threshold; (c) and (d) ignore the time-saved basis; (e) contradicts the definition of an incentive plan.

Common Pitfalls:
Applying Halsey’s 50–50 share when Rowan’s proportional formula should be used.

Final Answer:
Bonus is based on the percentage of time saved relative to standard time