Piece work (or piecework) is any type of

employment Employment is a relationship between two parties regulating the provision of paid labour services. Usually based on a contract, one party, the employer, which might be a corporation, a not-for-profit organization, a co-operative, or any othe ...

in which a worker is paid a fixed piece rate for each unit produced or action performed, regardless of time.

Context

When paying a worker, employers can use various methods and combinations of methods. Some of the most prevalent methods are: paid a wage by the hour (known as "time work"); paid an annual

salary A salary is a form of periodic payment from an employer to an employee, which may be specified in an employment contract. It is contrasted with piece wages, where each job, hour or other unit is paid separately, rather than on a periodic basis. F ...

; salary plus commission (common in sales jobs); base salary or hourly wages plus gratuities (common in service industries); salary plus a possible bonus (used for some managerial or executive positions); salary plus stock options (used for some executives and in start-ups and some high tech firms); salary pool systems; gainsharing (also known as "profit sharing"); paid by the piece – the number of things they make, or tasks they complete (known as ‘output work’); or paid in other ways (known as ‘unmeasured work’). Some industries where piece rate pay jobs are common are agricultural work, cable installation, call centers, writing, editing, translation, truck driving, data entry, carpet cleaning, craftwork, garment production, and manufacturing. Working for a piece rate does not mean that employers are exempt from paying

minimum wage A minimum wage is the lowest remuneration that employers can legally pay their employees—the price floor below which employees may not sell their labor. Most countries had introduced minimum wage legislation by the end of the 20th century. Bec ...

overtime Overtime is the amount of time someone works beyond normal working hours. The term is also used for the pay received for this time. Normal hours may be determined in several ways: *by custom (what is considered healthy or reasonable by society) ...

requirements, which vary among nations and states. Employers may find it in their interest to use piece rate pay after examining three theoretical considerations; the cost and viability of monitoring output in a way that accurately measures production so that quality doesn't decrease is first. Variable skill level is second, where piece rates are more effective in a more homogenous workforce. Thirdly, there may be more invasive managerial relations as the management is attempting to test how fast the workers can produce. Employees decide whether to work for piece rate pay if the relative earnings are high, and if other physical and psychological conditions are favorable. Some of these might be job stress, physicality, risks, degree of supervision and ability to work with peers or family members. Employees may also be more or less welcoming to performance pay depending on the leverage and risk. Leverage was defined as ratio of variable pay to base pay, and risk is the probability the employee will see increased benefits with effort. Workers tended to be suspicious of pay packages that were too heavy on variable pay and were concerned it might be a concession to remove cost-of living wage adjustments or to secure wage rollbacks.

Establishing a fair rate

Under UK law, piece workers must be paid in either at least the minimum wage for every hour worked or on the basis of a ‘fair rate’ for each task or piece of work they do. Output work can only be used in limited situations when the employer doesn't know which hours the worker does (e.g. some home workers). If an employer sets the working hours and the workers have to clock in and out, this counts as time work, not as output work. The fair rate is the amount that allows an average worker to be paid the minimum wage per hour if they work at an average rate. This must be calculated in a set way, a control trial is run to determine the average items produced by equivalent workers, this is divided by 1.2 to reach the agreed average figure, and the fair rate is set to ensure each worker achieves the minimum wage. There are several software programs that determine the time that a trained operator should take to perform an operation. MODSEW(TM) https://byte-ss.com/modsew/ is such a program, partially based on the motions that an operator is required to make to complete a task. In a service setting, the output of piece work can be measured by the number of operations completed, as when a

telemarketer Telemarketing (sometimes known as inside sales, or telesales in the UK and Ireland) is a method of direct marketing in which a salesperson solicits prospective customers to buy products or services, either over the phone or through a subsequen ...

is paid by the number of calls made or completed, regardless of the outcome of the calls (pay for only certain positive outcomes is more likely to be called a sales commission or incentive pay).

Crowdsourcing Crowdsourcing involves a large group of dispersed participants contributing or producing goods or services—including ideas, votes, micro-tasks, and finances—for payment or as volunteers. Contemporary crowdsourcing often involves digita ...

systems such as

Mechanical Turk The Turk, also known as the Mechanical Turk or Automaton Chess Player (german: Schachtürke, ; hu, A Török), was a fraudulent chess-playing machine constructed in the late 18th century. From 1770 until its destruction by fire in 1854 it wa ...

involve minute information-processing tasks (such as identifying photos or recognizing signatures) for which workers are compensated on a per-task basis.

History

Guild system

As a term and as a common form of labor, 'piece work' had its origins in the

guild A guild ( ) is an association of artisans and merchants who oversee the practice of their craft/trade in a particular area. The earliest types of guild formed as organizations of tradesmen belonging to a professional association. They sometimes ...

system of work during the

Commercial Revolution The Commercial Revolution consisted of the creation of a European economy based on trade, which began in the 11th century and lasted until it was succeeded by the Industrial Revolution in the mid-18th century. Beginning with the Crusades, Europea ...

and before the

Industrial Revolution The Industrial Revolution was the transition to new manufacturing processes in Great Britain, continental Europe, and the United States, that occurred during the period from around 1760 to about 1820–1840. This transition included going f ...

. Since the phrase 'piece work' first appears in writing around the year 1549, it is likely that at about this time, the master craftsmen of the guild system began to assign their apprentices work on pieces which could be performed at home, rather than within the master's workshop. In the British

factory system The factory system is a method of manufacturing using machinery and division of labor. Because of the high capital cost of machinery and factory buildings, factories are typically privately owned by wealthy individuals or corporations who emplo ...

, workers mass-produced parts from a fixed design as part of a division of labor, but did not have the advantage of machine tools or

metalworking Metalworking is the process of shaping and reshaping metals to create useful objects, parts, assemblies, and large scale structures. As a term it covers a wide and diverse range of processes, skills, and tools for producing objects on every scal ...

jigs. Simply counting the number of pieces produced by a worker was likely easier than accounting for that worker's time, as would have been required for the computation of an hourly

wage A wage is payment made by an employer to an employee for work done in a specific period of time. Some examples of wage payments include compensatory payments such as ''minimum wage'', '' prevailing wage'', and ''yearly bonuses,'' and remune ...

Industrial Revolution

Piece work took on new importance with the advent of machine tools, such as the machine lathe in 1751. Machine tools made possible by the

American system of manufacturing The American system of manufacturing was a set of manufacturing methods that evolved in the 19th century. The two notable features were the extensive use of interchangeable parts and mechanization for production, which resulted in more efficient ...

(attributed to Eli Whitney) in 1799 in which workers could truly make just a single part—but make many copies of it—for later assembly by others. The reality of the earlier English system had been that handcrafted pieces rarely fit together on the first try, and a single artisan was ultimately required to rework all parts of a finished good. By the early 19th century, the accuracy of machine tools meant that piecework parts were produced fully ready for final assembly.

Frederick Winslow Taylor Frederick Winslow Taylor (March 20, 1856 – March 21, 1915) was an American mechanical engineer. He was widely known for his methods to improve industrial efficiency. He was one of the first management consultants. In 1909, Taylor summed up ...

was one of the main champions of the piece rate system in the late 19th century. Although there were many piece rate systems in use, they were largely resented and manipulative. One of the most influential tenets of Scientific Management was Taylor's popularization of the "differential piece rate system", which relied on accurate measurements of productivity rates to create a "standard" production output target. Those who were not able to meet the target suffered a penalty and were likely fired. Taylor spread this in published papers in 1895, and the timed piece rate system gave birth to creating modern

cost control Cost accounting is defined as "a systematic set of procedures for recording and reporting measurements of the cost of manufacturing goods and performing services in the aggregate and in detail. It includes methods for recognizing, classifying, al ...

, and as a result, modern

corporate A corporation is an organization—usually a group of people or a company—authorized by the state to act as a single entity (a legal entity recognized by private and public law "born out of statute"; a legal person in legal context) and r ...

organization.

Criticism

In the mid-19th century, the practice of distributing garment assembly among lower-skilled and lower-paid workers came to be known in Britain as the

sweating system A sweatshop or sweat factory is a crowded workplace with very poor, socially unacceptable or illegal working conditions. Some illegal working conditions include poor ventilation, little to no breaks, inadequate work space, insufficient lighting, o ...

and arose at about the same time that a practical (foot-powered) sewing machine, was developed. Factories that collected sweating system workers at a single location, working at individual machines, and being paid piece rates became pejoratively known as

sweatshop A sweatshop or sweat factory is a crowded workplace with very poor, socially unacceptable or illegal working conditions. Some illegal working conditions include poor ventilation, little to no breaks, inadequate work space, insufficient lighting, o ...

s. There can be improper record keeping at the hands of supervisors attempting to cheat employees, to build piece rate systems that prevent workers from earning higher wages. This is often at the cost of both the worker and the enterprise though, as the quality and sustainability of the business will be threatened by decreases in quality or productivity of workers attempting to stay afloat. Put another way, if the payment for producing a well-made item is not enough to support a worker, then workers will need to work faster, producing more items per hour, while sacrificing quality. Today, piece work and sweatshops remain closely linked conceptually, even though each has continued to develop separately. The label "sweatshop" now refers more to long hours, poor working conditions and low pay—even if they pay an hourly or daily

wage labour Wage labour (also wage labor in American English), usually referred to as paid work, paid employment, or paid labour, refers to the socioeconomic relationship between a worker and an employer in which the worker sells their labour power under ...

instead of a piece rate.

Minimum wage

In the United States, the Fair Labor Standards Act requires that all employees, including piece work employees, earn at least the

. In calculating an appropriate piece work rate, employers must keep track of average productivity rates for specific activities and set a piece work rate that ensures that all workers are able to earn minimum wage. If a worker earns less than the minimum wage, the employer has to pay the difference. Exceptions to this rule include instances where: (i) the worker is a family member of the employer; (ii) if in any calendar quarter of the preceding year there were fewer than 500 person-days of work lasting at least one hour; (iii) in agricultural businesses, if a worker primarily takes care of livestock on the range; (iv) if non-local hand-harvesting workers are under 16, are employed on the same farm as their parent, and receive the piece work rate for those over 16.

References

Footnotes Citations Bibliography *

External links

Piece rate pay design
- University of California {{DEFAULTSORT:Piece Work Labour economics Employment classifications Wages and salaries Free market