Flat rate is a pricing scheme whereby the customer pays a fixed price for a service regardless of how long the worker takes to carry out the service. Flat rate manuals are based on timed studies of the typical time taken for each type of service. Flat rate helps provide a uniform pricing menu for service work and helps establish the worth of the performance of a particular job.
The benefit to the customer is that if a worker takes longer than this, the cost does not rise.
The benefit to the worker is that it incentivises the worker to learn how to do the work more efficiently.
It can be difficult to compare prices between hourly-paid and flat-rate services, and this sometimes causes rejection of flat rate shops over hourly ones.
However, many shops do not use flat rate manuals and instead set their prices by evaluating what they believe the market will bear.
Famous quotes containing the words flat and/or rate:
“But pardon, gentles all,
The flat unraised spirits that hath dared
On this unworthy scaffold to bring forth
So great an object.”
—William Shakespeare (1564–1616)
“Unless a group of workers know their work is under surveillance, that they are being rated as fairly as human beings, with the fallibility that goes with human judgment, can rate them, and that at least an attempt is made to measure their worth to an organization in relative terms, they are likely to sink back on length of service as the sole reason for retention and promotion.”
—Mary Barnett Gilson (1877–?)