【正文】 Wage System Innovation in Small and Middle Manufacture Enterprise Zhang bixi School of Economics and Management Guangdong University of Technology Guangzhou, China Xie xiangtian School of Economics and Management Guangdong University of Technology Guangzhou, China AbstractFor small and middle manufacture enterprises (SMME), the problem of workers39。 wages in multivariety and batch production system are studied in this paper. Based on analyzing the operation characters of the enterprises, the piece rate and its shortages in the enterprise have been studied through cases. For the purposes of reducing the production cost, improving the productivity and the job quality, the approaches to ameliorate the wage systems have been developed which are adapted to multivariety and batchorder production enterprises. It has been proved that the new wage system has a better stimulating effect than the traditional one, which can predigest the wage management for the enterprises. Keywords Piecerate, Labor Productivity, Batch production. I. THE OPERATION CHARACTERISTICS OF SMALL AND MEDIUM MANUFACTURING ENTERPRISES After the entrance of WTO, the small and mediumsized manufacturing enterprises in China face more extensive and heated petition than ever before. The market demand bees more diversified, personalized and changes quickly. Only by providing higher quality products with lower cost, better adaptability, shorter delivery time and better services, can SMIME win the petition. To satisfy the customers39。 demands and reduce the risks, foreign and domestic dealers have changed their ordering mode. Traditionally, dealers usually order large quantities of products periodically, but now they would like to order small batches randomly for various goods many times. For adapting to the demand mode, the enterprise production mode has changed from the traditional maketostore mode to the maketoorder mode. The diversified varieties, variable batch and random ordering mode have brought many new challenges to SMME, for example, the logistic control, quality standardization and control, production plan and schedule, delivery time guarantee and production cost. With the frequent changes of tasks, how to determine and adjust the piecerate will determine, to a large extent, whether the enterprise can normally develop and win the market petitions. II. WORKPIECEQUOTA MANAGEMENT PROBLEMS IN SMME Work pieceQuota management is the base of manufacture enterprises. Work pieceQuota level affects a pany39。s production plan, duedate, staffing, workers39。 wages, production costs and other important issues [2]. For MaketoOrder enterprises, because the variety of products and quantity ordered vary frequently, it39。s difficult to determine correctly the Work pieceQuota, thus it is hard to guarantee the fairness of the workers39。 wage level. Traditionally, workers39。 wages are calculated on the basis of hourly rate or piece rate. In hourly rate system, working hours and hourly rate determine the workers39。 wages. This method is easy to manage, but it cannot inspirit the workers. In practice, it has been found that workhour rate based on pay system always results in slowdown of work efficiency and decrease in productivity. While in piece rate system, workers39。 wages have to be decided by product quantity produced and the piecerate. This pay system will encourage workers to improve productivity, but workers tend to focus more on quantity than on quality. In addition, statistical work and management are hard to control. With the frequent changes of product varieties, quantity and work activity, how to ensure the rationality and the accuracy of the quota, and, from which, to determine the reasonable workers wage level, all these will have direct impact on the work productivity, duedate, cost, quality and other issues. A. Work piece Quota Imbalance Results in Lower Labor Productivity Absolute value of the quota and relativevalue of the quota inconsequence are the major problems in the maketoorder enterprises [339。4]. The former means that the quota level is either too high or too low. In the latter case, there is unfair difference in work piece quota levels among different jobs. Imbalance work piece quota level has serious negative impact on productivity. For those whose work piece quotas are higher, they will feel dissatisfactory, and their work efficiency and product quality will be affected. While those whose work piece quotas are lower, they will worry about the possibility that the work piece quotas will be increased if they have a high work efficiency, thus they tend to slow down their work on purpose, which will result in the lower productivity. In practice, because it