Suggest a suitable incentive scheme to a factory for its workers, keeping in view the following: (i) The entire gains of improved production should…

Rowan Scheme of premium bonus (variable sharing plan) is a suitable incentive scheme for the workers of the factory. If this scheme is adopted, the entire gains due to time saved by a worker will not pass to him. Another feature of this scheme is that a worker cannot increase his earnings or bonus by merely increasing its work speed. The reason for this is that the bonus under Rowan Scheme is maximum when the time taken by a worker on a job is half of the time allowed. As this fact is known to the workers, therefore, they work at such a speed which helps them to maintain the quality of output too. Lastly, Rowan System provides a safeguard in the case of any loose fixation of the standards by the rate-setting department. Workers cannot take undue advantage of such a situation.