A Business Encyclopedia

Halsey Plan

Definition: Under Halsey Plan, the standard time for the completion of a job is fixed and the rate per hour is then determined. If the time taken by a worker is more than the standard time, then he shall be paid according to the time rate, i.e. time taken multiplied by the rate per hour.

In Halsey plan, the time wages are guaranteed even if the output of a worker is below the standard. In case, the worker completes the works in less than the standard time, then he/she will be paid according to the actual time, i.e. time-rate plus the bonus calculated at a specified percentage of the saved time. Generally, the bonus percentage varies from 30-70 percent. The usual bonus share paid to the worker is 50% of the time saved multiplied by the rate per hour (time-rate).

This scheme can be further illustrated by the examples given below:

Standard Time: 8 hrs
Rate per Hour: Rs 2

Case (1): Time Taken = 8 hrs
Earnings = 8 x 2 = Rs 16

Case (2): Time Taken = 10 hrs
Earnings = 10 x 2 = Rs 20

Case (3): Time Taken= 6 hrs
Time wages = 6x 2 = Rs 12
Bonus = ½ x 2 x 2 = Rs Rs 2

Thus, in the above example, the worker’s total earnings are Rs 14 (time wages +bonus), if he has completed the work in 6 hrs, less than the standard time.

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