I generally agree with the arguments presented by Freddie Jones and my comments on his claim are as below:
1). I agree with his claim that payment system should be changed from hour rate into piece rate as to stimulate the employees’ incentive to produce efficiently. When paid by hour rate, the employees have no financial incentive to work efficiently because that paying system does NOT get their earning related to their productivity so. On the contrary, the piece rate will encourage higher efficiency and production to some extent, because the more they produce the more they will earn. Under that payment system, the employees are financially motivated to work hard and efficiently to get more earnings.
2) I also agree with his claim to replace the current low hour rate with the higher piece rate in order to keep more experienced employees staying at work and dramatically reduce the waste in time and money for training and outfitting new employees. Since an experience employee can produce a casting in only 20% of the time it takes a new worker, it is very important to keep them stay working in the foundry in term of maintaining high productivity and quality. To encourage them to stay, Jones Ironworks needs to raise their wage to some extent. It’s rather worthwhile and reasonable to do it according to the Freddie Jones’ demonstration: paying with piece rate, the actual increase in cost per hour is only around 13% over the current cost, but it can save the company more than 10% in labor productivity and 6% of total payroll due the elimination of the waste in training and outfitting the new employees.

Q.2 I don’t agree with Freddie’s father’s argument in some aspects and my commons are as follow: 1). I don’t agree with Freddie’s father calculation of the increase in cost per unit with regard to the change into the piece rate payment system. He sticks to