Halsey incentive plan: Which statement is correct about the Halsey system?
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AIt is not applied to all levels of workers and therefore excludes many shop-floor roles.
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BIt is applied to all levels of workers equally, without exceptions.
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CIt does not guarantee a minimum time wage to the worker.
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DIt is based upon the worker’s efficiency (time saved earns a bonus) while guaranteeing the time rate.
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EIt pays a fixed piece rate per unit irrespective of time saved.
Answer
Correct Answer: It is based upon the worker’s efficiency (time saved earns a bonus) while guaranteeing the time rate.
Explanation
Introduction / Context:The Halsey plan blends time wages with a shared-savings bonus. It seeks to motivate higher productivity while ensuring a guaranteed minimum earning equal to the time-rate wage for the actual hours worked.
Given Data / Assumptions:
- Standard time S established via work measurement.
- Actual time T observed; base rate R per hour.
- Bonus equals a share (often 50%) of the time-saved value (S − T) * R.
Concept / Approach:Key properties: (1) Guaranteed time-rate pay TR, (2) Bonus proportional to time saved, (3) Sharing of savings between firm and worker, (4) Useful across many operations but implementation policies vary by company. This differentiates it from piecework (per-unit pay) and Rowan (bonus scaled by T/S).
Step-by-Step Solution:
Compute time wage TR.Compute saving S − T (if any).Compute bonus share (e.g., 0.5 * (S − T) * R) and add to TR.Verification / Alternative check:When T ≥ S, bonus goes to zero but the worker still receives TR, proving the minimum-wage guarantee. When T < S, bonus rises with efficiency, aligning incentives.
Why Other Options Are Wrong:(a) and (b) make blanket claims about applicability that depend on firm policy; (c) is incorrect because Halsey guarantees the time rate; (e) describes piecework, not Halsey.
Common Pitfalls:Confusing Halsey with Rowan; forgetting the guarantee; applying the formula when standard times are not trustworthy.
Final Answer:It is based upon the worker’s efficiency (time saved earns a bonus) while guaranteeing the time rate.