Incentive Rates

1. Incentive Rates 9/26/2011

2. DO NOW… Robert works for a wholesale drug warehouse. He is compensated based on the number of lines he fills from an order form. His job is to read the order, go to the proper shelf in the warehouse, and pull from that shelf the number of items ordered on that line. He is paid $.04 for each line he fills. Robert filled 15,193 line items this pay period. What were his gross earnings?

3. DO NOW… $607.72 • 15, 193 X $.04 = • $607.72

4. Time vs. Incentive Rates • Time: • Depend only on the actual time an employee is on the job • Rate per hour, per day, per week, etc. • Incentive: • Based on production • Pay an employee for actual performance on the job • Piecework • Commission

5. Piecework • You are paid for each item of work that you produce • Ex: Garment industry - paid for the number of pieces completed during the pay period • Formula: • Gross pay = Rate per item X number produced

6. Piecework Example A truck driver drives 680 miles and is paid a piecework rate of $.32 per mile. What are his total gross earnings? Gross pay = Rate per item x number produced $.32 x 680 = $217.60

7. Your Turn Stacy is paid $.73 for sewing a jacket collar, $.86 for a sleeve with cuffs, and $.94 for a lapel. One week she sewed 318 jacket collars, 112 sleeves with cuffs and 37 lapels. Find her GROSS earnings? $232.14 + $96.32 + $34.78 = $363.24

8. Class Work • Get your workbooks • Turn to Section 1-4 on Page 3 • Complete questions 1-6