Chips and Nuts Sdn Bhd is currently paying the employees based on time based. The company is proposing to introduce a new scheme into its factory. However, it is still undecided on what kind of scheme to introduce. The following are details on the current pay scheme for the production line. Employees A B C D Actual hours worked (weekly) 38 36 40 34 Hourly rate of pay RM9 RM6 RM 7.5 RM 10.80 Output (units) X 42 120 120 Y 72 76 270 Z 92 50 Additional information: (a) Standard time allowed (per unit): X- 6 minutes Y- 9 minutes Z- 15 minutes (b) Each minute earned is valued at RM 0.50 for piece work calculation. Required: Evaluate the current pay scheme and propose a suitable incentive scheme for the company. Your evaluation must be supported by the following information. (i) The current weekly earning for each employee under the time based scheme. (ii) The weekly earning for each employee based on piecework, but earning with guaranteed at 75% of basic pay where the employee fails to earn this amount. (iii) The weekly earning for each employee based on an individual incentive scheme. Under the scheme, the employee receives a premium bonus of two-third of time saved in addition to hourly pay (iv) A brief discussion on the advantages and disadvantages of individual incentives schemes (v) A proposal on the scheme to be implemented in the company Chips and Nuts Sdn Bhd is currently paying the employees based on time based. The company is proposing to introduce a new scheme into its factory. However, it is still undecided on what kind of scheme to introduce. The following are details on the current pay scheme for the production line. Employees A B C D Actual hours worked (weekly) 38 36 40 34 Hourly rate of pay RM9 RM6 RM 7.5 RM 10.80 Output (units) X 42 120 120 Y 72 76 270 Z 92 50 Additional information: (a) Standard time allowed (per unit): X- 6 minutes Y- 9 minutes Z- 15 minutes (b) Each minute earned is valued at RM 0.50 for piece work calculation. Required: Evaluate the current pay scheme and propose a suitable incentive scheme for the company. Your evaluation must be supported by the following information. (i) The current weekly earning for each employee under the time based scheme. (ii) The weekly earning for each employee based on piecework, but earning with guaranteed at 75% of basic pay where the employee fails to earn this amount. (iii) The weekly earning for each employee based on an individual incentive scheme. Under the scheme, the employee receives a premium bonus of two-third of time saved in addition to hourly pay (iv) A brief discussion on the advantages and disadvantages of individual incentives schemes (v) A proposal on the scheme to be implemented in the company
