# Wage Payment & Incentive Systems
There are broadly four wage payment / incentive systems asked in CA Inter Costing:
1. Time Rate System
2. Piece Rate System
3. Halsey Premium Plan
4. Rowan Premium Plan
This lesson introduces the two foundational ones — Time Rate and Piece Rate.
## 1. Time Rate System
The worker is paid on the basis of hours worked, irrespective of the number of units produced.
$$\text{Wages} = \text{Hours Worked} \times \text{Rate per Hour}$$
Suited for:
- Skilled / supervisory work where quality matters more than speed
- Work where output is hard to measure
- Apprentices and learners
Drawback: No incentive for faster work — slow and fast workers earn the same.
## 2. Piece Rate System
The worker is paid on the basis of the number of good units produced, irrespective of hours worked.
$$\text{Wages} = \text{Units Produced} \times \text{Rate per Unit}$$
Suited for:
- Repetitive, measurable work
- Mass production
Drawback: Workers may sacrifice quality for quantity; idle time of machinery may increase if material is delayed (worker loses earnings).
## Key Comparison
| Feature | Time Rate | Piece Rate |
|---|---|---|
| Basis of payment | Hours worked | Units produced |
| Incentive to work fast | None | Yes |
| Quality focus | Better (no rush) | May suffer |
| Risk borne by | Employer (pays for idle time too) | Worker (no output = no pay) |
## Halsey & Rowan (Preview)
Halsey and Rowan are premium / incentive plans — hybrids that pay a guaranteed time wage plus a bonus for time saved against a standard. (Detailed formulae are covered in the next lesson.)