| 1. | 250 hours at $0.25 | $62.50 | |
| 2. | 50 hours saved, at $0.25 | 12.50 | |
| 3. | 20 per cent on 250 hours' pay | 12.50 | |
| —— | |||
| Total | $87.50 | ||
If, however, the worker does not so coöperate with the management as to make the shop operate at high efficiency, himself included, he does not receive as much extra pay, but a lessening amount until at 67 per cent and below he is paid day rate and no more.
The diagram shows plainly the efficiency wage line beginning at 6 hours, showing 20 per cent increase at 4 hours, standard time, and paying 4 hours time even if the work took no time at all—a condition that arises practically quite often, as when a worker runs two jobs at the same time, or when he does work on his own time.
While the diagram can be applied to a 4-hour job, the worker is not paid by the separate job, but is paid straight day wages and a bonus for his full-pay period efficiency. For each per cent of efficiency there is a corresponding increase in pay.
For 100 per cent efficiency the increase is 20 per cent, and for each 1 per cent increase in efficiency above an efficiency of 100 per cent, the pay also increases 1 per cent; therefore, for 120 per cent efficiency the pay is increased 40 per cent. Below 100 per cent the pay table runs as follows:
| Efficiency Per Cent | Additional Pay Per Cent | |||||||
| 67 | 0 | . | 00 | |||||
| 74 | 1 | . | ||||||
| 80 | 3 | . | 27 | |||||
| 85 | 6 | . | 17 | |||||
| 90 | 9 | . | 91 | |||||
| 95 | 14 | . | 53 | |||||
| 100 | 20 | . | ||||||
The system has other merits:
(1) It standardizes not only the work of each worker, but also of every foreman, every department, and of the shop as a whole.
(2) It therefore standardizes the shop cost of every job, whether it is done by a cheap apprentice in two hours, or a high priced mechanic in 10 hours. The average shop or department efficiency factor equalizes accidental variations.