If the standard quantity per hour be 20, and the worker is on the job 8½ hours, then the standard quantity for that time is 20 × 8½ = 170. If the worker produces 170, his efficiency is (170 × 100)/170 = 100 per cent. Suppose he produces 200 in the time, then his efficiency is more than 100 per cent., because he has produced more than the standard quantity. His efficiency is (200 × 100)/170 = 117·5 per cent. If, on the other hand, he produces less than 170, say 150, his efficiency is (150 × 100)/170 = 88·25 per cent.
Rule II.—In calculating efficiency by this method, it is evident that the quantity produced in a certain time must be multiplied by 100 and divided by the standard quantity for that time.
If a definite number of articles are to be machined, the whole quantity may be looked upon as a single job. For instance, suppose there are 3,000 pieces to be produced, and standard quantity is 150 per hour. Then the standard time for the whole quantity is 3000/150 = 20 hours. Reward time will be 20 + 33⅓ per cent. of 20 = 20 + 6⅔ = 26⅔ hours. Efficiency may now be worked out by the first method.
Efficiencies are, of course, calculated on the net time—that is, on the total time of the job after day time and other allowances have been deducted.
PART III
EXPLANATION OF DIAGRAMS
SHOWING DIFFERENT METHODS
OF REWARD PAYMENT
CHAPTER V
REWARD AND EFFICIENCY
In order to illustrate the general principles of the Reward System, an individual case was taken and one particular relation between reward and standard times was selected—namely, 75 per cent.
The sewing on of buttons, the laying of bricks, ploughing, shipbuilding, etc., would have served just as well, and the same general results would have been obtained.