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Current Payroll scheme: Basic working week: 38 hours Over-time premium: 20% of normal basic pay grade rate. Normal grade A basic pay rate: K22 per

Current Payroll scheme: Basic working week: 38 hours Over-time premium: 20% of normal basic pay grade rate. Normal grade A basic pay rate: K22 per hour. Normal grade B basic pay rate: K18 per hour. Employee Total hours worked Basic pay grade Normal units produced 1 41 A 170 2 44 A 170 3 40 B 150 4 38 B 150 5 38 B 150 6 45 A 180 8 Piecework Incentive Scheme Proposal Under the proposed piecework incentive scheme, the standard time allowance would be 20 minutes per unit. The piecework rate would be based on grade A basic hourly rates, with a standard piecework enhancement of 6%. All employees would receive the same piecework rate. Required: (a) Outline the purpose of an incentive scheme. [6 Marks] (b) Calculate the gross pay due to each employee based on the current payroll terms. [6 Marks] (c) Calculate the standard piecework rate on the basis of the proposed piecework incentive scheme. [6 Marks] (d) Calculate the gross pay due to each employee under the terms of the proposed incentive scheme. [6 Marks]

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