Agricultural Labor Management – Effective Piece-Rate Pay Management

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The Issue

When properly managed, piece-rate pay can result in enhanced wages for crew workers and increased productivity for growers. Despite these potential benefits, crew workers in a 1995 study were evenly divided between those who favor hourly pay and those who prefer piece-rate pay. Workers' concern for what they call "piece-rate games" played a key role in the low preference for piece rate. (Workers are sometimes paid on a piece rate but earn no more than when paid by the hour.) Also, many farm employers are concerned that quality suffers when workers are paid by the piece.

What Has ANR Done?

Gregory Billikopf, agricultural labor management farm advisor, conducted extensive research on farm worker productivity, both when workers are paid hourly and by piece rate. His research showed that the fastest farm worker in a crew was capable of four to eight times the performance of the slowest. In this study, Billikopf was able to show the vineyard employer that $45 per hour for the best employee was not out of line. The minimum wage (at the time $5.75), which is what the slowest worker was making, multiplied by eight is $46--essentially what the fastest pruner was making.

Billikopf advises, however, that in order to use piece rate effectively, the workers must be told ahead of time what the piece rate is. Workers are hesitant to give their all when they fear that piece rates are not firm.

As a result of this and related research, a set of ten recommendations was developed to help farm employers protect migrant workers when paying by the piece rate.

The Payoff

Piece rates wages can improve productivity and lower costs

Farm employers are beginning to understand that they should think more in terms of how much they are saving per acre by paying by the piece, rather than how much employees are making when their earnings are translated into hourly wages. A grower who took Billikopf’s advice later called to report that one of his workers had managed to make $35 an hour on a regular basis, and that he was pleased with the worker’s job performance and success. Proper understanding of piece-rate management can reduce mistrust between farm employers and migrant workers, and instead yield productive outcomes for both.

Contact

Supporting Unit:

Stanislaus County

Gregorio Billikopf Encina
UCCE, 3800 Cornucopia Way, Suite A
Modesto, CA 95358
(209) 525-6800 gebillikopf@ucdavis.edu