Breaking Down Piece Rate Pay

Piecemeal pay is a powerful motivator, but it's not without its barriers to implementation.  Is it worth it, and how can you make it work without wasting time on complex calculations?

 
What is Piece Rate Pay?

As labour costs rise, maximizing the potential of one’s team is a high priority in growers’ minds.  One of the most powerful ways to motivate employees in repetitive tasks like harvesting is piecemeal (also known as piece rate) pay design - that is, rewarding higher outputs with higher payouts.  In this pay design, outputs are given a dollar value (eg. a bin of apples = X dollars).  If employees produce enough outputs in an hour (eg. bins of apples picked) so that the value of the outputs exceeds the hourly minimum wage, then they receive that higher value as their pay for that hour.  If the value of their outputs does not exceed the minimum wage, then they receive the minimum wage as normal.

Is It Worth It?

Paying some employees more seems a dubious move in a time when minimum wages are on the rise and margins are scraped thin by growing production costs.  

However, the motivational benefits of piecemeal pay scheduling to a work force’s productivity are notable.  When payouts match effort, employees feel more empowered and total outputs are boosted. In fact, a California study looking at pruners in vineyards found that productivity increased 37% upon switching from hourly to piecemeal pay.  

 

A Managerial Headache?

However, many growers may find themselves unable to take advantage of these productivity gains because the calculation of such pay schedules can be so painstaking and time-consuming.  For every worker, you’d need to keep track of how much a worker picks, prunes, etc. in dollar amounts on any given day.  You would also have to keep track of the piece rate for each individual task or block, determine if that is greater or less than the minimum wage, and calculate the final pay.  Multiply that workload by a whole team of workers and it’s easy to see why paying workers piecemeal can prove unmanageable.

 

How Croptracker Can Help

With Croptracker, we wanted to make piecemeal pay scheduling and all its benefits accessible to all growers. The software minimizes data entry and can perform those aforementioned calculations in seconds.  

Croptracker can also generate the following reports based on your piecemeal pay hours and payouts, so you can keep on top of the trends occuring in your labour force and among individual workers.  That way you can identify and respond to issues before they become major issues.  At Croptracker we're all about you getting small business owner-level awareness, no matter how big your operation is.

 

Harvest Piecemeal Pay Report
Gives a detailed, per-employee view of hours worked, pieces picked, piece rates, and payout calculations.

Employee Payroll Report
A more condensed version of the Harvest Piecemeal Pay Report.
One row per employee, only shows totals, easy to export.

Click here to access the Knowledge Base's tutorial on setting up and recording piecemeal harvests.

 

Let's Get To Work

Get in contact with a Croptracker expert and receive 1-on-1 training on piece rate pay scheduling or any other Croptracker capability.

Sign up for a free demo and put Croptracker to work on your farm.