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On the other hand, systems of payment by results may have disadvantages. There is a tendency for the quality of products to deteriorate unless steps are taken to ensure maintenance of quality through checking and inspection. This involves added expenses. In some cases, it may not be possible or may be too expensive to maintain quality fully, and the benefit, gained in the form of increased output and lower cost may be offset to a considerable degree by deterioration in the quality of the products4.
Difficulties may arise over the introduction of new machines or methods. Workers may oppose such introduction for fear that new piece or bonus rates set, when the job is restudied at intervals of time, may yield lower earnings; or when new machines or methods are introduced; they may slacken their rate of work in order to avoid rising output to a level which would make a restudy of the job necessary. Costs may not, therefore, be lowered to the extent that would be necessary if the workers were on time-based work. Most trade unions agree that cuts in piece or bonus rates are justifiable in such circumstances. But individual workers may not share thie view, and output and the level of costs may be affected accordingly.
Workers tend, moreover, to regard their highest earnings as normal and may, therefore, press for a considerably higher minimum wage when they are paid by results than when they are paid by the hour. Payment by results may, therefore, lead to higher labour costs in certain industries such as paper-making and coal mining where workers experience, for reasons beyond their control, good and bad runs. Their earnings on the days they have good runs are apt to be regarded by them as normal earnings5.
Besides, there is evidence that some workers paid by results have disregarded security regulations in order to achieve high output, thus, increasing the danger of accidents. Some workers tend to overwork during the normal working day and sometimes keep on working in their lunch hour. These practices would affect their health.
Another disadvantage is that jealousies may arise among workers because some are able to earn more than others. In the case of group-incentive schemes, the workers who are fast in their work may be dissatisfied with those who are slow. Where heavy work is involved, older workers are likely to be criticized for being too slow.
One of the greatest difficulties with the incentive systems is in the setting or piece or bonus rates. Rate fixing involves delicate problems of judgement in which there is always a risk of error. If rates are set too low, workers are bound to be dissatisfied and will be under pressure to work very hard. If rates are set too high, workers may slacken their efforts at times so that their employers may not have cause to ask for a revision of rates because the earnings are too high. Workers sometimes decide approximately how much they feel they wish to earn and are, therefore, not interested in working for that part of the day which remains after they have earned the amount they want”.
Difficulty also arises in determining the standard performance. Many organizations follow a safe route to fix the standards – which is usually the average of past years’ performance. Past performance may not be the ideal basis for fixing production norms.
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