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Piecework wage

It refers to a type of payment where employees are paid according to their performance. Unlike a fixed hourly wage, the amount earned depends directly on the amount of work produced. This means that employees can increase their income by working efficiently and increasing their productivity. In industries such as manufacturing, construction or agriculture, piece rates are often used because performance is quantifiable. Employers and employees can benefit from this type of remuneration. Employees have a direct impact on their income through their performance, while employers can increase productivity.

Advantages of the piecework wage

Piecework pay rewards performance, which is an advantage. This gives employees an incentive to work more efficiently as they benefit directly from their productivity. This can lead to increased morale and efficiency. In addition, employers can create incentives to achieve certain goals or overcome bottlenecks in production through piecework pay. In countries like Germany, Austria, and Switzerland, there are specific legal regulations to ensure that employees are fairly and adequately compensated according to their performance. It protects employees from exploitation and ensures transparency in the remuneration process.

Disadvantages of the piecework wage

Although there are also potential disadvantages, piecework pay offers advantages. Employees may be inclined to jeopardize their health in order to increase their performance and earn more money. This could lead to overwork and stress. It can also be difficult to measure performance objectively, which could lead to unfairness or conflict. It is crucial that piecework pay is provided fairly and transparently by employers. Clear performance targets, regular reviews and open communication can achieve this. To ensure that workers are protected from exploitation, there are strict labor laws in the European Union and Switzerland.

Converting to piecework wages

Switching from a fixed hourly wage to piecework requires careful planning and communication on the part of the company. It is essential that employees are informed about the reasons for the changeover and also to ensure that they understand the new pay structures. In order for employees to work successfully under the piecework system, employers should provide training to ensure that they have the necessary skills and knowledge. To ensure that pay is fair and appropriate, it is also important to clearly define performance targets and regularly monitor performance indicators.


Employees are paid based on their performance in piecework, which is a form of remuneration. This type of pay can lead to increased productivity and morale, but also has potential health risks and inequities. Employers must ensure that piecework pay is fair, transparent and compliant with the law to protect the wellbeing of employees.