Both the premium plans are similar in many respects, yet they differ on some other points.
(i) Bonus – Under Halsey plan the bonus increases steadily with increase in efficiency. But in Rowan plan the bonus increases up to a certain point and starts declining thereafter. Rowan plan provides better bonus than Halsey plan till the
work is completed in half the standard time.
When the work is completed in exactly half the standard time, the bonus is the same under both the plans. When the work is completed in less than half the standard time, bonus is greater under Halsey plan.
Under Rowan plan, less efficient worker may get the same bonus as a more efficient one. For example, if the standard time is 10 hours and hourly rate of wage is Rs.10, the bonus payable under the plan will be Rs.24 when the work is completed in 6 hours. The same amount of bonus is payable to another worker who takes only 4 hours to complete it.
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Earnings per hour – Under the Rowan plan when time saved is less than 50% of standard time, earnings per hour is higher whereas under Halsey plan when time saved is more than 50% of standard time, earnings per hour is higher. At 50% time saved, earnings per hour are the same under both the plans.
Quality of output – The quality of work is not affected much under Rowan plan as the bonus increases at a decreasing rate at higher levels of efficiency and the workers do not prefer to rush work.