# Halsey Plan
## What It Is
The Halsey Plan is an incentive bonus scheme designed to reward workers who finish a job in less than the standard time. The worker still receives their normal time-rate pay for the actual hours worked, plus a fixed-percentage bonus (traditionally 50%) on the time saved.
## Key Variables
| Symbol | Meaning |
|---|---|
| AH | Actual Hours worked |
| SH | Standard Hours allowed for the units produced |
| R | Normal Time Rate (per hour) |
| (SH − AH) | Time Saved |
If SH > AH, the worker was efficient and earns a bonus. If SH ≤ AH, no bonus arises (only normal wages).
## Formulas
Bonus under Halsey Plan
$$\text{Bonus} = 50\% \times (SH - AH) \times R$$
Total Earnings under Halsey Plan
$$\text{Total} = \underbrace{AH \times R}_{\text{Normal pay}} + \underbrace{50\% \times (SH - AH) \times R}_{\text{Bonus for time saved}}$$
Effective Hourly Rate
$$\text{Effective Rate per Hour} = \frac{\text{Total Amount}}{\text{Actual Hours Worked}}$$
## Why 50%?
The 50% share is the classic Halsey formula — the employer keeps half of the savings from time saved and shares half with the worker. This protects the employer from over-payment while still motivating speed. (Some variants use 33⅓% or other percentages; unless stated, use 50%.)
## When to Apply
- The question gives standard time and actual time.
- The worker beat the standard (saved time).
- The question specifies Halsey, or asks you to compare with Rowan.