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Comparison of Halsey & Rowan Scheme

Between the two schemes, the following are the points of similarity & dissimilarity:
Points of Similarity:

(a) The time rate is guaranteed in both the scheme.

(b) In both the schemes, the standard time for completing a job or operation is fixed.

(c) Bonus is dependent upon the time saved out of the allowed standard time.

(d) The benefits of saving in time are allowed to both the employer & employee.

(e) Higher output & lower rate of fixed overhead per unit is provided by both the schemes.  

(f) When the worker takes ½ of the time allowed to finish the job, bonus hours in that case are same in both the schemes.

Points of Dissimilarity:

(a) If the time saved is less than ½ of the time allowed, better bonus is provided by the Rowan scheme than the Halsey scheme. On the other hand, if the time saved is more than ½ of the time allowed, the Halsey scheme provides better bonus than the Rowan scheme.

(b) The bonus hours, under the Halsey scheme, are equal to 50% of the time saved by the workers, whereas, under the Rowan scheme, the bonus hours are that proportion of time taken as the time saved bears to the time allowed.

(c) Under the Halsey scheme, more the time saved more will be the bonus; which is not true, under the Rowan scheme, if more than ½ of the time allowed is saved by the worker.

Example: The time allowed for a completing a job is 24 hours. The hourly rate is $. 4. For every 4 hours saved progressively, prepare a statement showing the bonus earned, earnings per hour & total earnings under Halsey system (50% to worker) & Rowan system of premium bonus & comment on comparative findings in the two systems.

Solution:  Bonus under Halsey Scheme=1/2*(Time saved*Time rate)
Bonus under Rowan Scheme= (Time saved/Time allowed)*Time taken*Time rate

From the above prepared comparative statement, the following observations could be drawn:

(1) Under Halsey system, with the increase in efficiency the bonus increases steadily. On the other hand, under Rowan system, up to certain level of efficiency, i.e. where time saved is 50% of allotted time, bonus increases & then it begins to decline.

(2) More wages is earned by the worker under Rowan system than under Halsey system, where time saved is less than 50% of the standard time. On the other hand, more wages will be the earned by the worker under Halsey system than under Rowan system,  when more than 50% of the standard time will be saved. Same bonus may be earned by the less efficient worker as well as by the more efficient one under Rowan system. Therefore, a safeguard is provided against a loose fixation of standards by the Rowan system.

(3) The worker, if he can save 2/3rd of the standard time, doubles his earnings per hour under Halsey system whereas earnings per hour can never be doubled under Rowan system.

(4) Under Halsey system, with a view to earning more bonuses, the quality of work may deteriorate which may arise due to over speed in work. On the other hand, as there is automatic check on the earnings under Rowan system, over speeding is arrested.

(5) Bonus under both the systems is the same, when the time saved is ½ of the standard time.

It may be concluded from the above observations that the Rowan scheme is better than the Halsey scheme, provided no loose fixation of standard is there. 

There are other premium bonus schemes also, like (a) Barth scheme, (b) Accelerating premium bonus.

(a) Barth scheme: Time wage is not guaranteed under this scheme, i.e. wage is not provided to the worker on the basis of time worked by him. By multiplying the square root of the product of the time allowed & time taken by the hourly rate, his wages will be calculated. Under this scheme, with the increase in efficiency, there is a fall in the rate of increase in total earnings. The calculation of wages is not understandable by the ordinary workers; still the beginners & unskilled workers prefer the scheme.

(b) Accelerating Premium Bonus: There is generally no accepted formula under this scheme. Own formula is made by the employer for each individual.

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