# Merrick Differential Piece-Rate System

**Definition: **The** Merrick Differential Piece-Rate System **is a modification of Taylor’s differential piece-rate system in which **three piece-rates **are used to distinguish between the beginners, the average workers, and the superior workers, against two piece-rates in Taylor’s system.

The worker is paid the **straight price rate up to 83%** of the standard output, **10 % above the normal rate** for producing between **83% – 100%** and **20% above the normal rate **for producing** more than 100% **of the standard output. Here also, the minimum wages of the worker are not guaranteed**. **

The Merrick Differential Piece-Rate System can be illustrated by the example given below:

Standard Output = 200 units

Piece-rate = 10 paise

**Case (1):** Output = 160 units

Efficiency = 160/200 x 100 = 80%

Since the efficiency is less than 83%, the worker is paid only the basic rate, i.e. 10 paise. Thus, **earnings will be** **Rs 8 (80 x 0.1).**

**Case (2): **Output= 180 units

Efficiency = 180/200 x 100 = 90%

As the efficiency is more than 83% but less than 100 percent, 10% above the normal rate is paid to the worker. Thus,

**Earnings = 90 x 110/100 x 0.1 = Rs 9.9**

**Case (3): **Output = 220 units

Efficiency = 220/200 x 100 = 110%

As the efficiency is 110%, 20% above the normal rate is paid to the worker. Thus,

**Earnings = 110 x 120/100 x 0.1 = Rs 13.30**

**Note:** Under Merrick differential piece-rate system the workers are not penalized for producing below the standard output up to 83%.