How does piecework affect employee income variability?

Piecework refers to a compensation strategy where employees are paid a fixed rate for each unit of work they complete. This method directly ties an employee's pay to their productivity levels. Consequently, employees who work faster or more efficiently can earn more, while those who produce less will see a decline in their earnings.

As a result, piecework fundamentally causes income variability based on the volume of output. Employees' incomes can fluctuate significantly from pay period to pay period, depending on how much work they complete. Higher productivity leads to higher earnings, while lower productivity corresponds to reduced pay. This variability is a hallmark of piecework compensation, making it less predictable compared to salaries or hourly wages, where employees earn a consistent amount regardless of their output levels.