# Why is Rowan plan used if it is not beneficial?

Halsey plan and Rowan plans are time based incentive wage plans. I have tried to check for the possible benefits the worker can get if he does work quickly than the standard time (S) . Halsey method seems reasonable but when I have tried to find the numerical profit of Rowan plan, it seems as the worker is always penalized.

As simplified,the benefit that a worker is getting from this incentive plan is always negative. So why and where is Rowal plan used?

• BJKShah consider editing the question to make it more clear. For instances, rotate the image and share some more details about the problem because it's unclear what you mean by "Why is still used". – Tiago Martins Peres 李大仁 Aug 27 '19 at 18:28
• I have tried explaining the questions but I can't rotate the image. Thanks for suggestion. – BJKShah Aug 28 '19 at 2:03

## 1 Answer

Your calculation is correct, but you're misinterpreting the result.

Let's have a simple example:

• Standard hourly pay (R) is \$1
• Standard working time (S) is 10 hours.
• Actual time taken (T) is 8 hours.

Compared to the standard wage of \$10 you're now earning -(10-8)^2/10 = -0.4. So you're earning \$9.6 instead of \$10, but you worked 2 hours less! If you keep working the same duration as your colleagues, you will earn more than them.

• Thank you, I didn't realize this part. – BJKShah Aug 29 '19 at 19:21