UNBIASED GRADUATED PAY SCHEDULES

Conventional graduated pay schedules are biased in the sense that, on the average, they provide less than 100 percent payment for a product that is exactly at the acceptable quality level. The quality index on which they are based is an essentially unbiased indicator of the percent defective of the population but, because the highest level in the pay table is 100 percent the average pay factor will usually be somewhat less. This may create serious problems in certain instances but can be overcome by developing unbiased pay schedules that are linear functions of the estimate of the population percent defective. This approach can be applied to both continuous and stepped pay schedules and, in both cases, pay factors greater than 100 percent are permitted. These are used to establish credit that may be applied to offset lower pay factors within specified time intervals throughout a construction project. This method is mathematically sound and produces the desired average pay factor at all quality levels. It is not the same as a bonus provision because the overall pay factor for each time period is still limited at 100 percent. The preparation of tables for estimating percent defective is reviewed, and both continuous and stepped pay schedules based on this measure are developed. Operating characteristics curves and optimization curves are presented to compare these approaches and assess their effect on bidding strategies. (Author)

Media Info

  • Features: Figures; References;
  • Pagination: p. 23-28
  • Monograph Title: Computer Aids and Statistics in Quality Assurance
  • Serial:

Subject/Index Terms

Filing Info

  • Accession Number: 00319330
  • Record Type: Publication
  • ISBN: 0309030544
  • Files: TRIS, TRB
  • Created Date: Oct 27 1980 12:00AM