Q. Explain standard hour system?
Under the former, the earning of the worker are in proportion to his or her output, as in the straight piece work, but the increment in earnings for each unit of output above the standard is greater. For example, for each one per cent increase in output above the standard, these may be a 4 / 3 times increase in the earning as compared to one per cent increase in earnings under the higher start rates applying after the standards have been reached. Similar logic applies to the high standard hour system. The main feature of these two schemes is that since direct labour costs per unit increase in for levels of output above the standard, the worker also shares the earnings costs results from an increased output. The amount of this share depends on the increments in the earnings which are pay able at a different level of output. If these increments were large enough and increased progressively with the output, the workers obviously could obtain all the savings in overhead costs. This is not, of course, the case where the increment in the earnings remains the same for the each successive increase in the output.