No. 1 is the ordinary diagram, 100 per cent. efficiency being the point where bonus begins. This point is based on an estimated time, not on a time study.
No. 2 is a diagram drawn to compare the Rowan System with the Reward System. Assuming that the worker under the Rowan System will usually earn 20 per cent. in excess of his day wages, this has been used to determine the 100 per cent. efficiency line, and the curve has been drawn as before.
(i) Day Rate.
The thick horizontal line marks the day rate of payment for work done. It is the same at all efficiencies, and there is no inducement whatever for a worker to increase his efficiency. Under such conditions the average worker will only do enough work to enable him to keep his job, and will resist all attempts to find out whether the work may be done more efficiently.
(j) Piece Work.
The straight piece work system means that the worker gets so much for each piece produced no matter how long it takes to produce it. Therefore the faster the work is done the more money is earned.
Efficiency is based on the quantity a worker ought to do in order to earn the standard rate of wages. Assuming he gets 10d. an hour, then the payment for the work done ought to equal 10d. when working at the normal rate—namely, 100 per cent. efficiency. If less than this is earned, efficiency falls below 100 per cent.; if more is earned, efficiency is over 100 per cent.
The sloping line shows the earnings per hour at different efficiencies.
There is no scientific basis on which to determine the proper time of the job, and there is great inequality in the prices of different jobs, some being easy, some very difficult. For the disadvantages of the system, see p. 6.