Gantt Task and Bonus Plan | Free Cost Accounting Articles
Gantt Task and Bonus Plan
What is Gantt task and bonus plan?
This plan is called the Gantt task and Premium plan given by H.L. Gantt. In this method, workers are guaranteed wages as per the determined time. The quantity of production to be done by the group is decided.
The Gantt task and bonus plan is a cross between time wages and piece work. This system aims to eliminate the jump in the Taylor system and to bring in the Halsey system.
The system is expressed in terms of time wages with a set standard. For reaching the standard or task a 20% bonus was given and above it, Piece rates are paid. Time wages are guaranteed and this prevents discouraging the new workers, and also prevents the elimination of the poorer worker.
Yet each man should have a job equal to his capacity. It is not the function of a wage payment plan to keep poor workers from being discharged. The essence of this plan is to set a fairly high standard for average performance, or task, on each job, guaranteed time wages being paid up to that point, but for production, at a task, a bonus of from 20% is paid and above it, piece rates are paid or that stepped-up
scale.
Only those workers who reach this specified standard or task will receive a high rate. It is to be seen that the setting of this standard is going to be difficult and to do it Taylor’s time studies were introduced.
| PERFORMANCE | EARNINGS |
| Output below standard | Time rate (Guaranteed) |
| Output at standard | 120% of Normal rate or 20% Bonus of time or Piece Rate |
| Output above standard | High Piece Rate or 120% of Piece rate |
Solved example of Gantt Task and Bonus Plan
Standard Rate – Rs. 5 Per Hour
Standard hours for the job – 8 Hours
Bonus – 20% of Standard Time
Worker A Completes work in – 10 Hours
Worker B Completes work in – 8 Hours
Worker C Completes work in – 6 Hours
Compare the earnings of A, B, and C under the Gantt Task and Bonus Plan.
Solution:
Wages of worker A,
= 10 hrs x Rs 5 = Rs 50
Wages of worker B,
= 8 hrs x Rs 5 + 20% of 40
= Rs 40 + 8 = 48
Wages of worker C,
= 8 hrs x Rs 5 + 20% of 40
= Rs 40 + 8 = 48
A’s Earning per hour = 50/10 = Rs 5
B’s Earning per hour = 48/8 = Rs 6
C’s Earning per hour = 48/6 = Rs 8
