PBR Systems

In our project we are dealing with the relationship between work study, first introduced by F. W. Taylor, and PBR-Systems, first introduced by the company Rucker and Scanlon in the time of the Great Depression of the 1930’s. The second major task of our project is to explain the work of the chief executive manager, the operations manager, the cost control manager and the trade union representative and their opinion about the connection between work study and PBR Systems.

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First of all we would like to give you a short overview of what work study and PBR Systems are and afterwards we would like to summarize the link between these systems. To keep it as comprehensive as possible we will introduce you these two systems with a figurative example, well known to nearly everybody. In our case study we will go into details of work studies and PBR-Systems and would like to underline the strong interaction between them by means of founding our own company called “The Sunrise Bar”. Short overview: Work Study is split in method study and work measurement (time study).

The implementation of these techniques should ensure the most effective way of financial, human and material resources and carrying out a specific activity. Work study is the collection of facts which are used to improve the current work methods. Work study has to allocate and record the different steps of work between individual working processes done by labor force, existing plants and equipment as a means to the improvement of these activities. The introduction of work study takes a lot of time to carry out and will be cost-intensive, but it is necessary to improve productivity and profit.

Payment by Results is the basic pay enhanced by an extra element related to extra cases like output or throughput or profit which will be calculated on individual or group basis. It was first introduced in the USA during the Great Depression in the 1930’s by the companies Rucker and Scanlon. The main idea of PBR Systems is that workers which have performed better than the standardized norm should be rewarded for their effort. Whether you reduce waste, increase efficiency or erase your productivity and profit each success will be quantified in monetary terms and sought to be shared amongst the concerned people.

Payment by results rewards different kinds of improvements like time savings, added value, increase in productivity, flexibility, the willingness to work overtime, creativity, diligence and dexterity. The aim of PBR is to reduce waste and increase efficiency with consequent increase of productivity and profits. It has to be ensured that PBR could only be successful if work study has already been implemented. The Sunrise Club: Our case study is similar to a model. The definition is: Models are simplified theories that show the key relationships among economic variables1.

Any model constructed to be completely realistic would be too difficult for anyone to understand. That’s why we choose to sell just one drink in our bar, the tequila sunrise. To give the audience the opportunity to gain an overall knowledge of the subject we will first include a theoretical part and afterwards we transform our expanded knowledge to our case study. We hope that the audience is able to understand the reality of work study and PBR Systems after the presentation. In our case study we will examine a cocktail bar called “The Sunrise Club”.

Our club has got four barkeepers known as Julian, Florian, Nils, Franz and the owner Jan. The club only sells one product according to the name of the club, it is tequila sunrise. In order to reduce waste and increase efficiency, productivity and profits the owner tries to optimize the working process by the use of work study. To have a fair payment system he also wishes to establish PBR schemes. Work Study: Jan as the owner of the club, has first gained some knowledge in the theory of work study and Payment by results Systems which he would like to share with the audience, before he start to install his chosen systems.

Work Study deals with the efficient design and execution of manual work, and with the establishment of standards of performance. The definition by the British Standards Institution is: “Work study is a generic term for those techniques, particularly method study and work measurement, which are used in the examination of human work in all its contexts, and which lead systematically to the investigation of all factors which affect the efficiency and economy of the situations being reviewed, in order to effect improvements”2. Work study was first introduced by the engineer F.

W. Taylor who observed US steel companies and set up his theory of scientific management in the 1890’s. Work study is split up in two techniques; Method Study and Work Measurements (it ensures the best possible use of financial, human and material sources in carrying out a specific industry). It is a low cost way of designing work for a higher productivity and reduces ineffective and wasted time. You have to distinguish between work study for existing jobs and for new jobs. One part of work study is method study which will be introduced in the next part.