What is the concept of "differential piece rate" in Scientific Management?

The concept of "differential piece rate" in Scientific Management refers to a pay scheme designed to incentivize productivity among workers. In this system, workers are compensated at different rates based on the quantity of output they produce. Specifically, those who exceed a predetermined standard of production receive a higher rate for each unit they produce, while those who do not reach that threshold are paid a lower rate for their output. This method is effective in encouraging workers to increase their productivity, as it directly correlates their compensation with their performance.

This principle aligns with the overarching goals of Scientific Management, which emphasize efficiency and productivity through systematic optimization of work processes. By creating financial incentives for higher output, the differential piece rate system motivates workers to enhance their performance, reduce waste, and ultimately increase profitability for the organization. In contrast, other pay structures do not offer this direct link between effort and reward and therefore may not be as effective in boosting productivity in the same way.