Disadvantages of the incentive payments:
1. There is a tendency for the quality of products to deteriorate unless steps are taken to ensure such introduction for fear that new piece or bonus rates set, when the job is restudied at intervals of time, may yield lower earnings or when new machines or methods are introduced, they may slacken their rate of work in order to avoid rising output to a level which would make a restudy of the job necessary.
2. Workers tend, moreover, to regard their highest earnings as normal and may, therefore, press for a considerable minimum wage when they are paid by results than when they are paid by the hour. Payment by results may, therefore, lead to higher labour costs in certain industries such as paper making and coal mining.
3. There is evidence that some workers paid by the results have discharges security regulations in more than others. In the case of group incentive schemes the workers who are fast in their work who are may be dish satisfied with those who are slow. Where heavy work is involved, older worker are likely to be criticized for being too slow.
4. Difficulty also arises in determining the standard performance. Many organizations follow to a safe route to fix the standards which is usually the average of past year's performance. Past performance may not be the ideal basis for fixing production norms.