Differential Piece Rate System is an incentive bonus plan suggested by Taylor . Under this plan , the piece wage rate paid to efficient workers is higher than the normal piece wage rate .
Purpose : According to Taylor, the wages of efficient and inefficient workers should be distinguished on the basis of level of output. This approach helps to stimulate less efficient workers to improve their performance and provide them higher job satisfaction . Thus the efficient workers get motivated as they are paid at a higher rate than those who perform below standard .
