1911
Through his business in changing the methods of shop management, the
writer has been brought into intimate contact over a period of years
with the organization of manufacturing and industrial establishments,
covering a large variety and range of product, and employing workmen in
many of the leading trades.
In taking a broad view of the field of management, the two facts which
appear most noteworthy are:
(a) What may be called the great unevenness, or lack of uniformity
shown, even in our best run works, in the development of the several
elements, which together constitute what is called the management.
(b) The lack of apparent relation between good shop management and the
payment of dividends.
Although the day of trusts is here, still practically each of the
component companies of the trusts was developed and built up largely
through the energies and especial ability of some one or two men who
were the master spirits in directing its growth. As a rule, this leader
rose from a more or less humble position in one of the departments, say
in the commercial or the manufacturing department, until he became the
head of his particular section. Having shown especial ability in his
line, he was for that reason made manager of the whole establishment.
In examining the organization of works of this class, it will frequently
be found that the management of the particular department in which this
master spirit has grown up towers to a high point of excellence, his
success having been due to a thorough knowledge of all of the smallest
requirements of his section, obtained through personal contact, and the
gradual training of the men under him to their maximum efficiency.
The remaining departments, in which this man has had but little personal
experience, will often present equally glaring examples of inefficiency.
And this, mainly because management is not yet looked upon as an art,
with laws as exact, and as clearly defined, for instance, as the
fundamental principles of engineering, which demand long and careful
thought and study. Management is still looked upon as a question of men,
the old view being that if you have the right man the methods can be
safely left to him.
The following, while rather an extreme case, may still be considered as
a fairly typical illustration of the unevenness of management. It became
desirable to combine two rival manufactories of chemicals. The great
obstacle to this combination, however, and one which for several years
had proved insurmountable was that the two men, each of whom occupied
the position of owner and manager of his company, thoroughly despised
one another. One of these men had risen to the top of his works through
the office at the commercial end, and the other had come up from a
workman in the factory. Each one was sure that the other was a fool, if
not worse. When they were finally combined it was found that each was
right in his judgment of the other in a certain way. A comparison of
their books showed that the manufacturer was producing his chemicals
more than forty per cent cheaper than his rival, while the business man
made up the difference by insisting on maintaining the highest quality,
and by his superiority in selling, buying, and the management of the
commercial side of the business. A combination of the two, however,
finally resulted in mutual respect, and saving the forty per cent
formerly lost by each man.
The second fact that has struck the writer as most noteworthy is that
there is no apparent relation in many, if not most cases, between good
shop management and the success or failure of the company, many
unsuccessful companies having good shop management while the reverse is
true of many which pay large dividends.
We, however, who are primarily interested in the shop, are apt to forget
that success, instead of hinging upon shop management, depends in many
cases mainly upon other elements, namely,--the location of the
company, its financial strength and ability, the efficiency of its
business and sales departments, its engineering ability, the superiority
of its plant and equipment, or the protection afforded either by
patents, combination, location or other partial monopoly.
And even in those cases in which the efficiency of shop management might
play an important part it must be remembered that for success no company
need be better organized than its competitors.
The most severe trial to which any system can be subjected is that of a
business which is in keen competition over a large territory, and in
which the labor cost of production forms a large element of the expense,
and it is in such establishments that one would naturally expect to find
the best type of management.
Yet it is an interesting fact that in several of the largest and most
important classes of industries in this country shop practice is still
twenty to thirty years behind what might be called modern management.
Not only is no attempt made by them to do tonnage or piece work, but the
oldest of old-fashioned day work is still in vogue under which one
overworked foreman manages the men. The workmen in these shops are still
herded in classes, all of those in a class being paid the same wages,
regardless of their respective efficiency.
In these industries, however, although they are keenly competitive, the
poor type of shop management does not interfere with dividends, since
they are in this respect all equally bad.
It would appear, therefore, that as an index to the quality of shop
management the earning of dividends is but a poor guide.
Any one who has the opportunity and takes the time to study the subject
will see that neither good nor bad management is confined to any one
system or type. He will find a few instances of good management
containing all of the elements necessary for permanent prosperity for
both employers and men under ordinary day work, the task system, piece
work, contract work, the premium plan, the bonus system and the
differential rate; and he will find a very much larger number of
instances of bad management under these systems containing as they do
the elements which lead to discord and ultimate loss and trouble for
both sides.
If neither the prosperity of the company nor any particular type or
system furnishes an index to proper management, what then is the
touchstone which indicates good or bad management?
The art of management has been defined, "as knowing exactly what you
want men to do, and then seeing that they do it in the best and cheapest
way.'" No concise definition can fully describe an art, but the
relations between employers and men form without question the most
important part of this art. In considering the subject, therefore, until
this part of the problem has been fully discussed, the other phases of
the art may be left in the background.
The progress of many types of management is punctuated by a series of
disputes, disagreements and compromises between employers and men, and
each side spends more than a considerable portion of its time thinking
and talking over the injustice which it receives at the hands of the
other. All such types are out of the question, and need not be
considered.
It is safe to say that no system or scheme of management should be
considered which does not in the long run give satisfaction to both
employer and employee, which does not make it apparent that their best
interests are mutual, and which does not bring about such thorough and
hearty cooperation that they can pull together instead of apart. It
cannot be said that this condition has as yet been at all generally
recognized as the necessary foundation for good management. On the
contrary, it is still quite generally regarded as a fact by both sides
that in many of the most vital matters the best interests of employers
are necessarily opposed to those of the men. In fact, the two elements
which we will all agree are most wanted on the one hand by the men and
on the other hand by the employers are generally looked upon as
antagonistic.
What the workmen want from their employers beyond anything else is high
wages, and what employers want from their workmen most of all is a low
labor cost of manufacture.
These two conditions are not diametrically opposed to one another as
would appear at first glance. On the contrary, they can be made to go
together in all classes of work, without exception, and in the writer's
judgment the existence or absence of these two elements forms the best
index to either good or bad management.
This book is written mainly with the object of advocating high wages and
low labor cost as the foundation of the best management, of pointing out
the general principles which render it possible to maintain these
conditions even under the most trying circumstances, and of indicating
the various steps which the writer thinks should be taken in changing
from a poor system to a better type of management.
The condition of high wages and low labor cost is far from being
accepted either by the average manager or the average workman as a
practical working basis. It is safe to say that the majority of
employers have a feeling of satisfaction when their workmen are
receiving lower wages than those of their competitors. On the other hand
very many workmen feel contented if they find themselves doing the same
amount of work per day as other similar workmen do and yet are getting
more pay for it. Employers and workmen alike should look upon both of
these conditions with apprehension, as either of them are sure, in the
long run, to lead to trouble and loss for both parties.
Through unusual personal influence and energy, or more frequently
through especial conditions which are but temporary, such as dull times
when there is a surplus of labor, a superintendent may succeed in
getting men to work extra hard for ordinary wages. After the men,
however, realize that this is the case and an opportunity comes for them
to change these conditions, in their reaction against what they believe
unjust treatment they are almost sure to lean so far in the other
direction as to do an equally great injustice to their employer.
On the other hand, the men who use the opportunity offered by a scarcity
of labor to exact wages higher than the average of their class, without
doing more than the average work in return, are merely laying up trouble
for themselves in the long run. They grow accustomed to a high rate of
living and expenditure, and when the inevitable turn comes and they are
either thrown out of employment or forced to accept low wages, they are
the losers by the whole transaction.
The only condition which contains the elements of stability and
permanent satisfaction is that in which both employer and employees are
doing as well or better than their competitors are likely to do, and
this in nine cases out of ten means high wages and low labor cost, and
both parties should be equally anxious for these conditions to prevail.
With them the employer can hold his own with his competitors at all
times and secure sufficient work to keep his men busy even in dull
times. Without them both parties may do well enough in busy times, but
both parties are likely to suffer when work becomes scarce.
The possibility of coupling high wages with a low labor cost rests
mainly upon the enormous difference between the amount of work which a
first-class man can do under favorable circumstances and the work which
is actually done by the average man.
That there is a difference between the average and the first-class man
is known to all employers, but that the first-class man can do in most
cases from two to four times as much as is done by an average man is
known to but few, and is fully realized only by those who have made a
thorough and scientific study of the possibilities of men.
The writer has found this enormous difference between the first-class
and average man to exist in all of the trades and branches of labor
which he has investigated, and these cover a large field, as he,
together with several of his friends, has been engaged with more than
usual opportunities for thirty years past in carefully and
systematically studying this subject.
The difference in the output of first-class and average men is as little
realized by the workmen as by their employers. The first-class men know
that they can do more work than the average, but they have rarely made
any careful study of the matter. And the writer has over and over again
found them utterly incredulous when he informed them, after close
observation and study, how much they were able to do. In fact, in most
cases when first told that they are able to do two or three times as
much as they have done they take it as a joke and will not believe that
one is in earnest.
It must be distinctly understood that in referring to the possibilities
of a first-class man the writer does not mean what he can do when on a
spurt or when he is over-exerting himself, but what a good man can keep
up for a long term of years without injury to his health. It is a pace
under which men become happier and thrive.
The second and equally interesting fact upon which the possibility of
coupling high wages with low labor cost rests, is that first-class men
are not only willing but glad to work at their maximum speed, providing
they are paid from 30 to 100 per cent more than the average of their
trade.
The exact percentage by which the wages must be increased in order to
make them work to their maximum is not a subject to be theorized over,
settled by boards of directors sitting in solemn conclave, nor voted
upon by trades unions. It is a fact inherent in human nature and has
only been determined through the slow and difficult process of trial and
error.
The writer has found, for example, after making many mistakes above and
below the proper mark, that to get the maximum output for ordinary shop
work requiring neither especial brains, very close application, skill,
nor extra hard work, such, for instance, as the more ordinary kinds of
routine machine shop work, it is necessary to pay about 30 per cent more
than the average. For ordinary day labor requiring little brains or
special skill, but calling for strength, severe bodily exertion, and
fatigue, it is necessary to pay from 50 per cent to 60 per cent above
the average. For work requiring especial skill or brains, coupled with
close application, but without severe bodily exertion, such as the more
difficult and delicate machinist's work, from 70 per cent to 80 per cent
beyond the average. And for work requiring skill, brains, close
application, strength, and severe bodily exertion, such, for instance,
as that involved in operating a well run steam hammer doing
miscellaneous work, from 80 per cent to 100 per cent beyond the average.
There are plenty of good men ready to do their best for the above
percentages of increase, but if the endeavor is made to get the right
men to work at this maximum for less than the above increase, it will be
found that most of them will prefer their old rate of speed with the
lower pay. After trying the high speed piece work for a while they will
one after another throw up their jobs and return to the old day work
conditions. Men will not work at their best unless assured a good
liberal increase, which must be permanent.
It is the writer's judgment, on the other hand, that for their own good
it is as important that workmen should not be very much over-paid, as it
is that they should not be under-paid. If over-paid, many will work
irregularly and tend to become more or less shiftless, extravagant, arid
dissipated. It does not do for most men to get rich too fast. The
writer's observation, however, would lead him to the conclusion that
most men tend to become more instead of less thrifty when they receive
the proper increase for an extra hard day's work, as, for example, the
percentages of increase referred to above. They live rather better,
begin to save money, become more sober, and work more steadily. And this
certainly forms one of the strongest reasons for advocating this type of
management.
In referring to high wages and low labor cost as fundamental in good
management, the writer is most desirous not to be misunderstood.
By high wages he means wages which are high only with relation to the
average of the class to which the man belongs and which are paid only to
those who do much more or better work than the average of their class.
He would not for an instant advocate the use of a high-priced tradesman
to do the work which could be done by a trained laborer or a
lower-priced man. No one would think of using a fine trotter to draw a
grocery wagon nor a Percheron to do the work of a little mule. No more
should a mechanic be allowed to do work for which a trained laborer can
be used, and the writer goes so far as to say that almost any job that
is repeated over and over again, however great skill and dexterity it
may require, providing there is enough of it to occupy a man throughout
a considerable part of the year, should be done by a trained laborer and
not by a mechanic. A man with only the intelligence of an average
laborer can be taught to do the most difficult and delicate work if it
is repeated enough times; and his lower mental caliber renders him more
fit than the mechanic to stand the monotony of repetition. It would seem
to be the duty of employers, therefore, both in their own interest and
in that of their employees, to see that each workman is given as far as
possible the highest class of work for which his brains and physique fit
him. A man, however, whose mental caliber and education do not fit him
to become a good mechanic (and that grade of man is the one referred to
as belonging to the "laboring class"), when he is trained to do some few
especial jobs, which were formerly done by mechanics, should not expect
to be paid the wages of a mechanic. He should get more than the average
laborer, but less than a mechanic; thus insuring high wages to the
workman, and low labor cost to the employer, and in this way making it
most apparent to both that their interests are mutual.
To summarize, then, what the aim in each establishment should be:
(a) That each workman should be given as far as possible the highest
grade of work for which his ability and physique fit him.
(b) That each workman should be called upon to turn out the maximum
amount of work which a first-rate man of his class can do and thrive.
(c) That each workman, when he works at the best pace of a first-class
man, should be paid from 30 per cent to 100 per cent according to the
nature of the work which he does, beyond the average of his class.
And this means high wages and a low labor cost. These conditions not
only serve the best interests of the employer, but they tend to raise
each workman to the highest level which he is fitted to attain by making
him use his best faculties, forcing him to become and remain ambitious
and energetic, and giving him sufficient pay to live better than in the
past.
Under these conditions the writer has seen many first-class men
developed who otherwise would have remained second or third class all of
their lives.
Is not the presence or absence of these conditions the best indication
that any system of management is either well or badly applied? And in
considering the relative merits of different types of management, is not
that system the best which will establish these conditions with the
greatest certainty, precision, and speed?
In comparing the management of manufacturing and engineering companies
by this standard, it is surprising to see how far they fall short. Few
of those which are best organized have attained even approximately the
maximum output of first-class men.
Many of them are paying much higher prices per piece than are required
to secure the maximum product while owing to a bad system, lack of exact
knowledge of the time required to do work, and mutual suspicion and
misunderstanding between employers and men, the output per man is so
small that the men receive little if any more than average wages, both
sides being evidently the losers thereby. The chief causes which produce
this loss to both parties are: First (and by far the most important),
the profound ignorance of employers and their foremen as to the time in
which various kinds of work should be done, and this ignorance is shared
largely by the workmen. Second: The indifference of the employers and
their ignorance as to the proper system of management to adopt and the
method of applying it, and further their indifference as to the
individual character, worth, and welfare of their men. On the part of
the men the greatest obstacle to the attainment of this standard is the
slow pace which they adopt, or the loafing or "soldiering,'" marking
time, as it is called.
This loafing or soldiering proceeds from two causes. First, from the
natural instinct and tendency of men to take it easy, which may be
called natural soldiering. Second, from more intricate second thought
and reasoning caused by their relations with other men, which may be
called systematic soldiering. There is no question that the tendency of
the average man (in all walks of life) is toward working at a slow, easy
gait, and that it is only after a good deal of thought and observation
on his part or as a result of example, conscience, or external pressure
that he takes a more rapid pace.
There are, of course, men of unusual energy, vitality, and ambition who
naturally choose the fastest gait, set up their own standards, and who
will work hard, even though it may be against their best interests. But
these few uncommon men only serve by affording a contrast to emphasize
the tendency of the average.
This common tendency to "take it easy" is greatly increased by bringing
a number of men together on similar work and at a uniform standard rate
of pay by the day.
Under this plan the better men gradually but surely slow down their gait
to that of the poorest and least efficient. When a naturally energetic
man works for a few days beside a lazy one, the logic of the situation
is unanswerable: "Why should I work hard when that lazy fellow gets the
same pay that I do and does only half as much work?"
A careful time study of men working under these conditions will disclose
facts which are ludicrous as well as pitiable.
To illustrate: The writer has timed a naturally energetic workman who,
while going and coming from work, would walk at a speed of from three to
four miles per hour, and not infrequently trot home after a day's work.
On arriving at his work he would immediately slow down to a speed of
about one mile an hour. When, for example, wheeling a loaded wheelbarrow
he would go at a good fast pace even up hill in order to be as short a
time as possible under load, and immediately on the return walk slow
down to a mile an hour, improving every opportunity for delay short of
actually sitting down. In order to be sure not to do more than his lazy
neighbor he would actually tire himself in his effort to go slow.
These men were working under a foreman of good reputation and one highly
thought of by his employer who, when his attention was called to this
state of things, answered: "Well, I can keep them from sitting down, but
the devil can't make them get a move on while they are at work."
The natural laziness of men is serious, but by far the greatest evil
from which both workmen and employers are suffering is the systematic
soldiering which is almost universal under all of the ordinary schemes
of management and which results from a careful study on the part of the
workmen of what they think will promote their best interests.
The writer was much interested recently to hear one small but
experienced golf caddy boy of twelve explaining to a green caddy who had
shown special energy and interest the necessity of going slow and
lagging behind his man when he came up to the ball, showing him that
since they were paid by the hour, the faster they went the less money
they got, and finally telling him that if he went too fast the other
boys would give him a licking.
This represents a type of systematic soldiering which is not, however,
very serious, since it is done with the knowledge of the employer, who
can quite easily break it up if he wishes.
The greater part of the systematic soldiering, however, is done by the
men with the deliberate object of keeping their employers ignorant of
how fast work can be done.
So universal is soldiering for this purpose, that hardly a competent
workman can be found in a large establishment, whether he works by the
day or on piece work, contract work or under any of the ordinary systems
of compensating labor, who does not devote a considerable part of his
time to studying just how slowly he can work and still convince his
employer that he is going at a good pace.
The causes for this are, briefly, that practically all employers
determine upon a maximum sum which they feel it is right for each of
their classes of employees to earn per day, whether their men work by
the day or piece.
Each workman soon finds out about what this figure is for his particular
case, and he also realizes that when his employer is convinced that a
man is capable of doing more work than he has done, he will find sooner
or later some way of compelling him to do it with little or no increase
of pay.
Employers derive their knowledge of how much of a given class of work
can be done in a day from either their own experience, which has
frequently grown hazy with age, from casual and unsystematic observation
of their men, or at best from records which are kept, showing, the
quickest time in which each job has been done. In many cases the
employer will feel almost certain that a given job can be done faster
than it has been, but he rarely cares to take the drastic measures
necessary to force men to do it in the quickest time, unless he has an
actual record, proving conclusively how fast the work can be done.
It evidently becomes for each man's interest, then, to see that no job
is done faster than it has been in the past. The younger and less
experienced men are taught this by their elders, and all possible
persuasion and social pressure is brought to bear upon the greedy and
selfish men to keep them from making new records which result in
temporarily increasing their wages, while all those who come after them
are made to work harder for the same old pay.
Under the best day work of the ordinary type, when accurate records are
kept of the amount of work done by each man and of his efficiency, and
when each man's wages are raised as he improves, and those who fail to
rise to a certain standard are discharged and a fresh supply of
carefully selected men are given work in their places, both the natural
loafing and systematic soldiering can be largely broken up. This can be
done, however, only when the men are thoroughly convinced that there is
no intention of establishing piece work even in the remote future, and
it is next to impossible to make men believe this when the work is of
such a nature that they believe piece work to be practicable. In most
cases their fear of making a record which will be used as a basis for
piece work will cause them to soldier as much as they dare.
It is, however, under piece work that the art of systematic soldiering
is thoroughly developed. After a workman has had the price per piece of
the work he is doing lowered two or three times as a result of his
having worked harder and increased his output, he is likely to entirely
lose sight of his employer's side of the case and to become imbued with
a grim determination to have no more cuts if soldiering can prevent it.
Unfortunately for the character of the workman, soldiering involves a
deliberate attempt to mislead and deceive his employer, and thus upright
and straight-forward workmen are compelled to become more or less
hypocritical. The employer is soon looked upon as an antagonist, if not
as an enemy, and the mutual confidence which should exist between a
leader and his men, the enthusiasm, the feeling that they are all
working for the same end and will share in the results, is entirely
lacking.
The feeling of antagonism under the ordinary piecework system becomes in
many cases so marked on the part of the men that any proposition made by
their employers, however reasonable, is looked upon with suspicion.
Soldiering becomes such a fixed habit that men will frequently take
pains to restrict the product of machines which they are running when
even a large increase in output would involve no more work on their
part.
On work which is repeated over and over again and the volume of which is
sufficient to permit it, the plan of making a contract with a competent
workman to do a certain class of work and allowing him to employ his own
men subject to strict limitations, is successful.
As a rule, the fewer the men employed by the contactor and the smaller
the variety of the work, the greater will be the success under the
contract system, the reason for this being that the contractor, under
the spur of financial necessity, makes personally so close a study of
the quickest time in which the work can be done that soldiering on the
part of his men becomes difficult and the best of them teach laborers or
lower-priced helpers to do the work formerly done by mechanics.
The objections to the contract system are that the machine tools used by
the contractor are apt to deteriorate rapidly, his chief interest being
to get a large output, whether the tools are properly cared for or not,
and that through the ignorance and inexperience of the contractor in
handling men, his employees are frequently unjustly treated.
These disadvantages are, however, more than counterbalanced by the
comparative absence of soldiering on the part of the men.
The greatest objection to this system is the soldiering which the
contractor himself does in many cases, so as to secure a good price for
his next contract.
It is not at all unusual for a contractor to restrict the output of his
own men and to refuse to adopt improvements in machines, appliances, or
methods while in the midst of a contract, knowing that his next contract
price will be lowered in direct proportion to the profits which he has
made and the improvements introduced.
Under the contract system, however, the relations between employers and
men are much more agreeable and normal than under piece work, and it is
to be regretted that owing to the nature of the work done in most shops
this system is not more generally applicable.
The writer quotes as follows from his paper on "A Piece Rate System,"
read in 1895, before The American Society of Mechanical Engineers:
"Cooperation, or profit sharing, has entered the mind of every student
of the subject as one of the possible and most attractive solutions of
the problem; and there have been certain instances, both in England and
France, of at least a partial success of cooperative experiments.
"So far as I know, however, these trials have been made either in small
towns, remote from the manufacturing centers, or in industries which in
many respects are not subject to ordinary manufacturing conditions.
"Cooperative experiments have failed, and, I think, are generally
destined to fail, for several reasons, the first and most important of
which is, that no form of cooperation has yet been devised in which each
individual is allowed free scope for his personal ambition. Personal
ambition always has been and will remain a more powerful incentive to
exertion than a desire for the general welfare. The few misplaced
drones, who do the loafing and share equally in the profits with the
rest, under cooperation are sure to drag the better men down toward
their level.
"The second and almost equally strong reason for failure lies in the
remoteness of the reward. The average workman (I don't say all men)
cannot look forward to a profit which is six months or a year away. The
nice time which they are sure to have today, if they take things easily,
proves more attractive than hard work, with a possible reward to be
shared with others six months later.
"Other and formidable difficulties in the path of cooperation are, the
equitable division of the profits, and the fact that, while workmen are
always ready to share the profits, they are neither able nor willing to
share the losses. Further than this, in many cases, it is neither right
nor just that they should share either in the profits or the losses,
since these may be due in great part to causes entirely beyond their
influence or control, and to which they do not contribute."
Of all the ordinary systems of management in use (in which no accurate
scientific study of the time problem is undertaken, and no carefully
measured tasks are assigned to the men which must be accomplished in a
given time) the best is the plan fundamentally originated by Mr. Henry
R. Towne, and improved and made practical by Mr. F. A. Halsey. This plan
is described in papers read by Mr. Towne before The American Society of
Mechanical Engineers in 1886, and by Mr. Halsey in 1891, and has since
been criticized and ably defended in a series of articles appearing in
the "American Machinist."
The Towne-Halsey plan consists in recording the quickest time in which a
job has been done, and fixing this as a standard. If the workman
succeeds in doing the job in a shorter time, he is still paid his same
wages per hour for the time he works on the job, and in addition is
given a premium for having worked faster, consisting of from one-quarter
to one-half the difference between the wages earned and the wages
originally paid when the job was done in standard time. Mr. Halsey
recommends the payment of one third of the difference as the best
premium for most cases. The difference between this system and ordinary
piece work is that the workman on piece work gets the whole of the
difference between the actual time of a job and the standard time, while
under the Towne-Halsey plan he gets only a fraction of this difference.
It is not unusual to hear the Towne-Halsey plan referred to as
practically the same as piece work. This is far from the truth, for
while the difference between the two does not appear to a casual
observer to be great, and the general principles of the two seem to be
the same, still we all know that success or failure in many cases hinges
upon small differences.
In the writer's judgment, the Towne-Halsey plan is a great invention,
and, like many other great inventions, its value lies in its simplicity.
This plan has already been successfully adopted by a large number of
establishments, and has resulted in giving higher wages to many workmen,
accompanied by a lower labor cost to the employer, and at the same time
materially improving their relations by lessening the feeling of
antagonism between the two.
This system is successful because it diminishes soldiering, and this
rests entirely upon the fact that since the workman only receives say
one-third of the increase in pay that he would get under corresponding
conditions on piece work, there is not the same temptation for the
employer to cut prices.
After this system has been in operation for a year or two, if no cuts in
prices have been made, the tendency of the men to soldier on that
portion of the work which is being done under the system is diminished,
although it does not entirely cease. On the other hand, the tendency of
the men to soldier on new work which is started, and on such portions as
are still done on day work, is even greater under the Towne-Halsey plan
than under piece work.
To illustrate: Workmen, like the rest of mankind, are more strongly
influenced by object lessons than by theories. The effect on men of such
an object lesson as the following will be apparent. Suppose that two
men, named respectively Smart and Honest, are at work by the day and
receive the same pay, say 20 cents per hour. Each of these men is given
a new piece of work which could be done in one hour. Smart does his job
in four hours (and it is by no means unusual for men to soldier to this
extent). Honest does his in one and one-half hours.
Now, when these two jobs start on this basis under the Towne-Halsey plan
and are ultimately done in one hour each, Smart receives for his job 20
cents per hour + a premium of 20 cents = a total of 40 cents. Honest
receives for his job 20 cents per hour + a premium of 3 1/8 cents = a
total of 23 1/8 cents.
Most of the men in the shop will follow the example of Smart rather than
that of Honest and will "soldier" to the extent of three or four hundred
per cent if allowed to do so. The Towne-Halsey system shares with
ordinary piece work then, the greatest evil of the latter, namely that
its very foundation rests upon deceit, and under both of these systems
there is necessarily, as we have seen, a great lack of justice and
equality in the starting-point of different jobs.
Some of the rates will have resulted from records obtained when a
first-class man was working close to his maximum speed, while others
will be based on the performance of a poor man at one-third or one
quarter speed.
The injustice of the very foundation of the system is thus forced upon
the workman every day of his life, and no man, however kindly disposed
he may be toward his employer, can fail to resent this and be seriously
influenced by it in his work. These systems are, therefore, of necessity
slow and irregular in their operation in reducing costs. They "drift"
gradually toward an increased output, but under them the attainment of
the maximum output of a first-class man is almost impossible.
Objection has been made to the use of the word "drifting" in this
connection. It is used absolutely without any intention of slurring the
Towne-Halsey system or in the least detracting from its true merit.
It appears to me, however, that "drifting" very accurately describes it,
for the reason that the management, having turned over the entire
control of the speed problem to the men, the latter being influenced by
their prejudices and whims, drift sometimes in one direction and
sometimes in another; but on the whole, sooner or later, under the
stimulus of the premium, move toward a higher rate of speed. This
drifting, accompanied as it is by the irregularity and uncertainty both
as to the final result which will be attained and as to how long it will
take to reach this end, is in marked contrast to the distinct goal which
is always kept in plain sight of both parties under task management, and
the clear-cut directions which leave no doubt as to the means which are
to be employed nor the time in which the work must be done; and these
elements constitute the fundamental difference between the two systems.
Mr. Halsey, in objecting to the use of the word "drifting" as describing
his system, has referred to the use of his system in England in
connection with a "rate-fixing" or planning department, and quotes as
follows from his paper to show that he contemplated control of the speed
of the work by the management:
"On contract work undertaken for the first time the method is the same
except that the premium is based on the estimated time for the execution
of the work."
In making this claim Mr. Halsey appears to have entirely lost sight of
the real essence of the two plans. It is task management which is in use
in England, not the Towne-Halsey system; and in the above quotation Mr.
Halsey describes not his system but a type of task management, in which
the men are paid a premium for carrying out the directions given them by
the management.
There is no doubt that there is more or less confusion in the minds of
many of those who have read about the task management and the
Towne-Halsey system. This extends also to those who are actually using
and working under these systems. This is practically true in England,
where in some cases task management is actually being used under the
name of the "Premium Plan." It would therefore seem desirable to
indicate once again and in a little different way the essential
difference between the two.
The one element which the Towne-Halsey system and task management have
in common is that both recognize the all-important fact that workmen
cannot be induced to work extra hard without receiving extra pay. Under
both systems the men who succeed are daily and automatically, as it
were, paid an extra premium. The payment of this daily premium forms
such a characteristic feature in both systems, and so radically
differentiates these systems from those which were in use before, that
people are apt to look upon this one element as the essence of both
systems and so fail to recognize the more important, underlying
principles upon which the success of each of them is based.
In their essence, with the one exception of the payment of a daily
premium, the systems stand at the two opposite extremes in the field of
management; and it is owing to the distinctly radical, though opposite,
positions taken by them that each one owes its success; and it seems to
me a matter of importance that this should be understood. In any
executive work which involves the cooperation of two different men or
parties, where both parties have anything like equal power or voice in
its direction, there is almost sure to be a certain amount of bickering,
quarreling, and vacillation, and the success of the enterprise suffers
accordingly. If, however, either one of the parties has the entire
direction, the enterprise will progress consistently and probably
harmoniously, even although the wrong one of the two parties may be in
control.
Broadly speaking, in the field of management there are two parties--the
superintendents, etc., on one side and the men on the other, and the
main questions at issue are the speed and accuracy with which the work
shall be done. Up to the time that task management was introduced in the
Midvale Steel Works, it can be fairly said that under the old systems of
management the men and the management had about equal weight in deciding
how fast the work should be done. Shop records showing the quickest time
in which each job had been done and more or less shrewd guessing being
the means on which the management depended for bargaining with and
coercing the men; and deliberate soldiering for the purpose of
misinforming the management being the weapon used by the men in
self-defense. Under the old system the incentive was entirely lacking
which is needed to induce men to cooperate heartily with the management
in increasing the speed with which work is turned out. It is chiefly
due, under the old systems, to this divided control of the speed with
which the work shall be done that such an amount of bickering,
quarreling, and often hard feeling exists between the two sides.
The essence of task management lies in the fact that the control of the
speed problem rests entirely with the management; and, on the other
hand, the true strength of the Towne-Halsey system rests upon the fact
that under it the question of speed is settled entirely by the men
without interference on the part of the management. Thus in both cases,
though from diametrically opposite causes, there is undivided control,
and this is the chief element needed for harmony.
The writer has seen many jobs successfully nursed in several of our
large and well managed establishments under these drifting systems, for
a term of ten to fifteen years, at from one-third to one-quarter speed.
The workmen, in the meanwhile, apparently enjoyed the confidence of
their employers, and in many cases the employers not only suspected the
deceit, but felt quite sure of it.
The great defect, then, common to all the ordinary systems of management
(including the Towne-Halsey system, the best of this class) is that
their starting-point, their very foundation, rests upon ignorance and
deceit, and that throughout their whole course in the one element which
is most vital both to employer and workmen, namely, the speed at which
work is done, they are allowed to drift instead of being intelligently
directed and controlled.
The writer has found, through an experience of thirty years, covering a
large variety in manufactures, as well as in the building trades,
structural and engineering work, that it is not only practicable but
comparatively easy to obtain, through a systematic and scientific time
study, exact information as to how much of any given kind of work either
a first-class or an average man can do in a day, and with this
information as a foundation, he has over and over again seen the fact
demonstrated that workmen of all classes are not only willing, but glad
to give up all idea of soldiering, and devote all of their energies to
turning out the maximum work possible, providing they are sure of a
suitable permanent reward.
With accurate time knowledge as a basis, surprisingly large results can
be obtained under any scheme of management from day work up; there is no
question that even ordinary day work resting upon this foundation will
give greater satisfaction than any of the systems in common use,
standing as they do upon soldiering as a basis.
To many of the readers of this book both the fundamental objects to be
aimed at, namely, high wages with low labor cost, and the means
advocated by the writer for attaining this end; namely, accurate time
study, will appear so theoretical and so far outside of the range of
their personal observation and experience that it would seem desirable,
before proceeding farther, to give a brief illustration of what has been
accomplished in this line.
The writer chooses from among a large variety of trades to which these
principles have been applied, the yard labor handling raw materials in
the works of the Bethlehem Steel Company at South Bethlehem, Pa., not
because the results attained there have been greater than in many other
instances, but because the case is so elementary that the results are
evidently due to no other cause than thorough time study as a basis,
followed by the application of a few simple principles with which all of
us are familiar.
In almost all of the other more complicated cases the large increase in
output is due partly to the actual physical changes, either in the
machines or small tools and appliances, which a preliminary time study
almost always shows to be necessary, so that for purposes of
illustration the simple case chosen is the better, although the gain
made in the more complicated cases is none the less legitimately due to
the system.
Up to the spring of the year 1899, all of the materials in the yard of
the Bethlehem Steel Company had been handled by gangs of men working by
the day, and under the foremanship of men who had themselves formerly
worked at similar work as laborers. Their management was about as good
as the average of similar work, although it was bad all of the men being
paid the ruling wages of laborers in this section of the country,
namely, $1.15 per day, the only means of encouraging or disciplining
them being either talking to them or discharging them; occasionally,
however, a man was selected from among these men and given a better
class of work with slightly higher wages in some of the companies'
shops, and this had the effect of slightly stimulating them. From four
to six hundred men were employed on this class of work throughout the
year.
The work of these men consisted mainly of unloading from railway cars
and shoveling on to piles, and from these piles again loading as
required, the raw materials used in running three blast furnaces and
seven large open-hearth furnaces, such as ore of various kinds, varying
from fine, gravelly ore to that which comes in large lumps, coke,
limestone, special pig, sand, etc., unloading hard and soft coal for
boilers gas-producers, etc., and also for storage and again loading the
stored coal as required for use, loading the pig-iron produced at the
furnaces for shipment, for storage, and for local use, and handling
billets, etc., produced by the rolling mills. The work covered a large
variety as laboring work goes, and it was not usual to keep a man
continuously at the same class of work.
Before undertaking the management of these men, the writer was informed
that they were steady workers, but slow and phlegmatic, and that nothing
would induce them to work fast.
The first step was to place an intelligent, college-educated man in
charge of progress in this line. This man had not before handled this
class of labor, although he understood managing workmen. He was not
familiar with the methods pursued by the writer, but was soon taught the
art of determining how much work a first-class man can do in a day. This
was done by timing with a stop watch a first-class man while he was
working fast. The best way to do this, in fact almost the only way in
which the timing can be done with certainty, is to divide the man's work
into its elements and time each element separately. For example, in the
case of a man loading pig-iron on to a car, the elements should be: (a)
picking up the pig from the ground or pile (time in hundredths of a
minute); (b) walking with it on a level (time per foot walked); (c)
walking with it up an incline to car (time per foot walked); (d)
throwing the pig down (time in hundredths of a minute), or laying it on
a pile (time in hundredths of a minute); (e) walking back empty to get a
load (time per foot walked).
In case of important elements which were to enter into a number of
rates, a large number of observations were taken when practicable on
different first-class men, and at different times, and they were
averaged.
The most difficult elements to time and decide upon in this, as in most
cases, are the percentage of the day required for rest, and the time to
allow for accidental or unavoidable delays.
In the case of the yard labor at Bethlehem, each class of work was
studied as above, each element being timed separately, and, in addition,
a record was kept in many cases of the total amount of work done by the
man in a day. The record of the gross work of the man (who is being
timed) is, in most cases, not necessary after the observer is skilled in
his work. As the Bethlehem time observer was new to this work, the gross
time was useful in checking his detailed observations and so gradually
educating him and giving him confidence in the new methods.
The writer had so many other duties that his personal help was confined
to teaching the proper methods and approving the details of the various
changes which were in all cases outlined in written reports before being
carried out.
As soon as a careful study had been made of the time elements entering
into one class of work, a single first-class workman was picked out and
started on ordinary piece work on this job. His task required him to do
between three and one-half and four times as much work in a day as had
been done in the past on an average.
Between twelve and thirteen tons of pig-iron per man had been carried
from a pile on the ground, up an inclined plank, and loaded on to a
gondola car by the average pig-iron handler while working by the day.
The men in doing this work had worked in gangs of from five to twenty
men.
The man selected from one of these gangs to make the first start under
the writer's system was called upon to load on piece work from
forty-five to forty-eight tons (2,240 lbs. each) per day.
He regarded this task as an entirely fair one, and earned on an average,
from the start, $1.85 per day, which was 60 per cent more than he had
been paid by the day. This man happened to be considerably lighter than
the average good workman at this class of work. He weighed about 130
pounds. He proved however, to be especially well suited to this job, and
was kept at it steadily throughout the time that the writer was in
Bethlehem, and some years later was still at the same work.
Being the first piece work started in the works, it excited considerable
opposition, both on the part of the workmen and of several of the
leading men in the town, their opposition being based mainly on the old
fallacy that if piece work proved successful a great many men would be
thrown out of work, and that thereby not only the workmen but the whole
town would suffer.
One after another of the new men who were started singly on this job
were either persuaded or intimidated into giving it up. In many cases
they were given other work by those interested in preventing piece work,
at wages higher than the ruling wages. In the meantime, however, the
first man who started on the work earned steadily $1.85 per day, and
this object lesson gradually wore out the concerted opposition, which
ceased rather suddenly after about two months. From this time on there
was no difficulty in getting plenty of good men who were anxious to
start on piece work, and the difficulty lay in making with sufficient
rapidity the accurate time study of the elementary operations or "unit
times" which forms the foundation of this kind of piece work.
Throughout the introduction of piece work, when after a thorough time
study a new section of the work was started, one man only was put on
each new job, and not more than one man was allowed to work at it until
he had demonstrated that the task set was a fair one by earning an
average of $1.85 per day. After a few sections of the work had been
started in this way, the complaint on the part of the better workmen was
that they were not allowed to go on to piece work fast enough. It
required about two years to transfer practically all of the yard labor
from day to piece work. And the larger part of the transfer was made
during the last six months of this time.
As stated above, the greater part of the time was taken up in studying
"unit times," and this time study was greatly delayed by having
successively the two leading men who had been trained to the work leave
because they were offered much larger salaries elsewhere. The study of
"unit times" for the yard labor took practically the time of two trained
men for two years. Throughout this time the day and piece workers were
under entirely separate and distinct management. The original foremen
continued to manage the day work, and day and piece workers were never
allowed to work together. Gradually the day work gang was diminished and
the piece workers were increased as one section of work after another
was transformed from the former to the latter.
Two elements which were important to the success of this work should be
noted:
First, on the morning following each day's work, each workman was given
a slip of paper informing him in detail just how much work he had done
the day before, and the amount he had earned. This enabled him to
measure his performance against his earnings while the details were
fresh in his mind. Without this there would have been great
dissatisfaction among those who failed to climb up to the task asked of
them, and many would have gradually fallen off in their performance.
Second, whenever it was practicable, each man's work was measured by
itself. Only when absolutely necessary was the work of two men measured
up together and the price divided between them, and then care was taken
to select two men of as nearly as possible the same capacity. Only on
few occasions, and then upon special permission, signed by the writer,
were more than two men allowed to work on gang work, dividing their
earnings between them. Gang work almost invariably results in a failing
off in earnings and consequent dissatisfaction.
An interesting illustration of the desirability of individual piece work
instead of gang work came to our attention at Bethlehem. Several of the
best piece workers among the Bethlehem yard laborers were informed by
their friends that a much higher price per ton was paid for shoveling
ore in another works than the rate given at Bethlehem. After talking the
matter over with the writer he advised them to go to the other works,
which they accordingly did. In about a month they were all back at work
in Bethlehem again, having found that at the other works they were
obliged to work with a gang of men instead of on individual piece work,
and that the rest of the gang worked so slowly that in spite of the high
price paid per ton they earned much less than Bethlehem.
Table 1, on page 54, gives a summary of the work done by the piece-work
laborers in handling raw materials, such as ores, anthracite and
bituminous coal, coke, pig-iron, sand, limestone, cinder, scale, ashes,
etc., in the works of the Bethlehem Steel Company, during the year
ending April 30, 1900. This work consisted mainly in loading and
unloading cars on arrival or departure from the works, and for local
transportation, and was done entirely by hand, i.e., without the use of
cranes or other machinery.
The greater part of the credit for making the accurate time study and
actually managing the men on this work should be given to Mr. A. B.
Wadleigh, the writer's assistant in this section at that time.
TABLE 1. -SHOWING RELATIVE COST OF YARD LABOR UNDER TASK PIECE WORK AND
OLD STYLE DAY WORK
[Transcriber's note -- table 1 omitted]
When the writer left the steel works, the Bethlehem piece workers were
the finest body of picked laborers that he has ever seen together. They
were practically all first-class men, because in each case the task
which they were called upon to perform was such that only a first-class
man could do it. The tasks were all purposely made so severe that not
more than one out of five laborers (perhaps even a smaller percentage
than this) could keep up.
[Footnotes to table 1]
1) It was our intention to fix piece work rates which should enable
first-class workmen to average about 60 per cent more than they had been
earning on day work, namely $1.85 per day. A year's average shows them
to have earned $1.88 per day, or three cents per man per day more than
we expected--an error of 1 6/10 per cent.
2) The piece workers handled on an average 3 56/100 times as many tons
per day as the day workers.
[end footnotes to table 1]
It was clearly understood by each newcomer as he went to work that
unless he was able to average at least $1.85 per day he would have to
make way for another man who could do so. As a result, first-class men
from all over that part of the country, who were in most cases earning
from $1.05 to $1.15 per day, were anxious to try their hands at earning
$1.85 per day. If they succeeded they were naturally contented, and if
they failed they left, sorry that they were unable to maintain the
proper pace, but with no hard feelings either toward the system or the
management. Throughout the time that the writer was there, labor was as
scarce and as difficult to get as it ever has been in the history of
this country, and yet there was always a surplus of first-class men
ready to leave other jobs and try their hand at Bethlehem piece work.
Perhaps the most notable difference between these men and ordinary
piece workers lay in their changed mental attitude toward their
employers and their work, and in the total absence of soldiering on
their part. The ordinary piece worker would have spent a considerable
part of his time in deciding just how much his employer would allow him
to earn without cutting prices and in then trying to come as close as
possible to this figure, while carefully guarding each job so as to
keep the management from finding out how fast it really could be done.
These men, however, were faced with a new but very simple and
straightforward proposition, namely, am I a first-class laborer or not?
Each man felt that if he belonged in the first class all he had to do
was to work at his best and he would be paid sixty per cent more than
he had been paid in the past. Each piece work price was accepted by the
men without question. They never bargained over nor complained about
rates, and there was no occasion to do so, since they were all equally
fair, and called for almost exactly the same amount of work and fatigue
per dollar of wages.
A careful inquiry into the condition of these men when away from work
developed the fact that out of the whole gang only two were said to be
drinking men. This does not, of course, imply that many of them did not
take an occasional drink. The fact is that a steady drinker would find
it almost impossible to keep up with the pace which was set, so that
they were practically all sober. Many if not most of them were saving
money, and they all lived better than they had before. The results
attained under this system were most satisfactory both to employer and
workmen, and show in a convincing way the possibility of uniting high
wages with a low labor cost.
This is virtually a labor union of first-class men, who are united
together to secure the extra high wages, which belong to them by right
and which in this case are begrudged them by none, and which will be
theirs through dull times as well as periods of activity. Such a union
commands the unqualified admiration and respect of all classes of the
community; the respect equally of workmen, employers, political
economists, and philanthropists. There are no dues for membership, since
all of the expenses are paid by the company. The employers act as
officers of the Union, to enforce its rules and keep its records, since
the interests of the company are identical and bound up with those of
the men. It is never necessary to plead with, or persuade men to join
this Union, since the employers themselves organize it free of cost; the
best workmen in the community are always anxious to belong to it. The
feature most to be regretted about it is that the membership is limited.
The words "labor union" are, however, unfortunately so closely
associated in the minds of most people with the idea of disagreement and
strife between employers and men that it seems almost incongruous to
apply them to this case. Is not this, however, the ideal "labor union,"
with character and special ability of a high order as the only
qualifications for membership.
It is a curious fact that with the people to whom the writer has
described this system, the first feeling, particularly among those more
philanthropically inclined, is one of pity for the inferior workmen who
lost their jobs in order to make way for the first-class men. This
sympathy is entirely misplaced. There was such a demand for labor at the
time that no workman was obliged to be out of work for more than a day
or two, and so the poor workmen were practically as well off as ever.
The feeling, instead of being one of pity for the inferior workmen,
should be one of congratulation and rejoicing that many first-class
men--who through unfortunate circumstances had never had the opportunity
of proving their worth--at last were given the chance to earn high wages
and become prosperous.
What the writer wishes particularly to emphasize is that this whole
system rests upon an accurate and scientific study of unit times, which
is by far the most important element in scientific management. With it,
greater and more permanent results can be attained even under ordinary
day work or piece work than can be reached under any of the more
elaborate systems without it.
In 1895 the writer read a paper before The American Society of
Mechanical Engineers entitled "A Piece Rate System." His chief object in
writing it was to advocate the study of unit times as the foundation of
good management. Unfortunately, he at the same time described the
"differential rate" system of piece work, which had been introduced by
him in the Midvale Steel Works. Although he called attention to the fact
that the latter was entirely of secondary importance, the differential
rate was widely discussed in the journals of this country and abroad
while practically nothing was said about the study of "unit times."
Thirteen members of the Society discussed the piece rate system at
length, and only two briefly referred to the study of the "unit times."
The writer most sincerely trusts that his leading object in writing this
book will not be overlooked, and that scientific time study will receive
the attention which it merits. Bearing in mind the Bethlehem yard labor
as an illustration of the application of the study of unit times as the
foundation of success in management, the following would seem to him a
fair comparison of the older methods with the more modern plan.
For each job there is the quickest time in which it can be done by a
first-class man. This time may be called the "quickest time," or the
"standard time" for the job. Under all the ordinary systems, this
"quickest time" is more or less completely shrouded in mist. In most
cases, however, the workman is nearer to it and sees it more clearly
than the employer.
Under ordinary piece work the management watch every indication given
them by the workmen as to what the "quickest time" is for each job, and
endeavor continually to force the men toward this "standard time," while
the workmen constantly use every effort to prevent this from being done
and to lead the management in the wrong direction. In spite of this
conflict, however, the "standard time" is gradually approached.
Under the Towne-Halsey plan the management gives up all direct effort to
reach this "quickest time," but offers mild inducements to the workmen
to do so, and turns over the whole enterprise to them. The workmen,
peacefully as far as the management is concerned, but with considerable
pulling and hauling among themselves, and without the assistance of a
trained guiding hand, drift gradually and slowly in the direction of the
"standard time," but rarely approach it closely.
With accurate time study as a basis, the "quickest time" for each job
is at all times in plain sight of both employers and workmen, and is
reached with accuracy, precision, and speed, both sides pulling hard in
the same direction under the uniform simple and just agreement that
whenever a first-class man works his best he will receive from 30 to 100
per cent more than the average of his trade.
Probably a majority of the attempts that are made to radically change
the organization of manufacturing companies result in a loss of money to
the company, failure to bring about the change sought for, and a return
to practically the original organization. The reason for this being that
there are but few employers who look upon management as an art, and that
they go at a difficult task without either having understood or
appreciated the time required for organization or its cost, the troubles
to be met with, or the obstacles to be overcome, and without having
studied the means to be employed in doing so.
Before starting to make any changes in the organization of a company the
following matters should be carefully considered: First, the importance
of choosing the general type of management best suited to the particular
case. Second, that in all cases money must be spent, and in many cases a
great deal of money, before the changes are completed which result in
lowering cost. Third, that it takes time to reach any result worth
aiming at. Fourth, the importance of making changes in their proper
order, and that unless the right steps are taken, and taken in their
proper sequence, there is great danger from deterioration in the quality
of the output and from serious troubles with the workmen, often
resulting in strikes.
As to the type of management to be ultimately aimed at, before any
changes whatever are made, it is necessary, or at least highly
desirable, that the most careful consideration should be given to the
type to be chosen; and once a scheme is decided upon it should be
carried forward step by step without wavering or retrograding. Workmen
will tolerate and even come to have great respect for one change after
another made in logical sequence and according to a consistent plan. It
is most demoralizing, however, to have to recall a step once taken,
whatever may be the cause, and it makes any further changes doubly
difficult.
The choice must be made between some of the types of management in
common use, which the writer feels are properly designated by the word
"drifting," and the more modern scientific management based on an
accurate knowledge of how long it should take to do the work. If, as is
frequently the case, the managers of an enterprise find themselves so
overwhelmed with other departments of the business that they can give
but little thought to the management of the shop, then some one of the
various "drifting" schemes should be adopted; and of these the writer
believes the Towne-Halsey plan to be the best, since it drifts safely
and peacefully though slowly in the right direction; yet under it the
best results can never be reached. The fact, however, that managers are
in this way overwhelmed by their work is the best proof that there is
something radically wrong with the plan of their organization and in
self defense they should take immediate steps toward a more thorough
study of the art.
It is not at all generally realized that whatever system may be used,
--providing a business is complex in its nature--the building up of an
efficient organization is necessarily slow and sometimes very expensive.
Almost all of the directors of manufacturing companies appreciate the
economy of a thoroughly modern, up-to-date, and efficient plant, and are
willing to pay for it. Very few of them, however, realize that the best
organization, whatever its cost may be, is in many cases even more
important than the plant; nor do they clearly realize that no kind of an
efficient organization can be built up without spending money. The
spending of money for good machinery appeals to them because they can
see machines after they are bought; but putting money into anything so
invisible, intangible, and to the average man so indefinite, as an
organization seems almost like throwing it away.
There is no question that when the work to be done is at all
complicated, a good organization with a poor plant will give better
results than the best plant with a poor organization. One of the most
successful manufacturers in this country was asked recently by a number
of financiers whether he thought that the difference between one style
of organization and another amounted to much providing the company had
an up-to-date plant properly located. His answer was, "If I had to
choose now between abandoning my present organization and burning down
all of my plants which have cost me millions, I should choose the
latter. My plants could be rebuilt in a short while with borrowed money,
but I could hardly replace my organization in a generation."
Modern engineering can almost be called an exact science; each year
removes it further from guess work and from rule-of-thumb methods and
establishes it more firmly upon the foundation of fixed principles.
The writer feels that management is also destined to become more of an
art, and that many of the, elements which are now believed to be outside
the field of exact knowledge will soon be standardized tabulated,
accepted, and used, as are now many of the elements of engineering.
Management will be studied as an art and will rest upon well recognized,
clearly defined, and fixed principles instead of depending upon more or
less hazy ideas received from a limited observation of the few
organizations with which the individual may have come in contact. There
will, of course, be various successful types, and the application of the
underlying principles must be modified to suit each particular case. The
writer has already indicated that he thinks the first object in
management is to unite high wages with a low labor cost. He believes
that this object can be most easily attained by the application of the
following principles:
(a) A LARGE DAILY TASK. --Each man in the establishment, high or low,
should daily have a clearly defined task laid out before him. This task
should not in the least degree be vague nor indefinite, but should be
circumscribed carefully and completely, and should not be easy to
accomplish.
(b) STANDARD CONDITIONS. --Each man's task should call for a full day's
work, and at the same time the workman should be given such standardized
conditions and appliances as will enable him to accomplish his task with
certainty.
(c) HIGH PAY FOR SUCCESS. --He should be sure of large pay when he
accomplishes his task.
(d) LOSS IN CASE OF FAILURE. --When he fails he should be sure that
sooner or later he will be the loser by it.
When an establishment has reached an advanced state of organization, in
many cases a fifth element should be added, namely: the task should be
made so difficult that it can only be accomplished by a first-class man.
There is nothing new nor startling about any of these principles and yet
it will be difficult to find a shop in which they are not daily violated
over and over again. They call, however, for a greater departure from
the ordinary types of organization than would at first appear. In the
case, for instance, of a machine shop doing miscellaneous work, in order
to assign daily to each man a carefully measured task, a special
planning department is required to lay out all of the work at least one
day ahead. All orders must be given to the men in detail in writing; and
in order to lay out the next day's work and plan the entire progress of
work through the shop, daily returns must be made by the men to the
planning department in writing, showing just what has been done. Before
each casting or forging arrives in the shop the exact route which it is
to take from machine to machine should be laid out. An instruction card
for each operation must be written out stating in detail just how each
operation on every piece of work is to be done and the time required to
do it, the drawing number, any special tools, jigs, or appliances
required, etc. Before the four principles above referred to can be
successfully applied it is also necessary in most shops to make
important physical changes. All of the small details in the shop, which
are usually regarded as of little importance and are left to be
regulated according to the individual taste of the workman, or, at best,
of the foreman, must be thoroughly and carefully standardized; such.
details, for instance, as the care and tightening of the belts; the
exact shape and quality of each cutting tool; the establishment of a
complete tool room from which properly ground tools, as well as jigs,
templates, drawings, etc., are issued under a good check system, etc.;
and as a matter of importance (in fact, as the foundation of scientific
management) an accurate study of unit times must be made by one or more
men connected with the planning department, and each machine tool must
be standardized and a table or slide rule constructed for it showing how
to run it to the best advantage.
At first view the running of a planning department, together with the
other innovations, would appear to involve a large amount of additional
work and expense, and the most natural question would be is whether the
increased efficiency of the shop more than offsets this outlay? It must
be borne in mind, however, that, with the exception of the study of unit
times, there is hardly a single item of work done in the planning
department which is not already being done in the shop. Establishing a
planning department merely concentrates the planning and much other
brainwork in a few men especially fitted for their task and trained in
their especial lines, instead of having it done, as heretofore, in most
cases by high priced mechanics, well fitted to work at their trades, but
poorly trained for work more or less clerical in its nature.
There is a close analogy between the methods of modern engineering and
this type of management. Engineering now centers in the drafting room as
modern management does in the planning department. The new style
engineering has all the appearance of complication and extravagance,
with its multitude of drawings; the amount of study and work which is
put into each detail; and its corps of draftsmen, all of whom would be
sneered at by the old engineer as "non-producers." For the same reason,
modern management, with its minute time study and a managing department
in which each operation is carefully planned, with its many written
orders and its apparent red tape, looks like a waste of money; while the
ordinary management in which the planning is mainly done by the workmen
themselves, with the help of one or two foremen, seems simple and
economical in the extreme.
The writer, however, while still a young man, had all lingering doubt as
to the value of a drafting room dispelled by seeing the chief engineer,
the foreman of the machine shop, the foreman of the foundry, and one or
two workmen, in one of our large and successful engineering
establishments of the old school, stand over the cylinder of an engine
which was being built, with chalk and dividers, and discuss for more
than an hour the proper size and location of the studs for fastening on
the cylinder head. This was simplicity, but not economy. About the same
time he became thoroughly convinced of the necessity and economy of a
planning department with time study, and with written instruction cards
and returns. He saw over and over again a workman shut down his machine
and hunt up the foreman to inquire, perhaps, what work to put into his
machine next, and then chase around the shop to find it or to have a
special tool or template looked up or made. He saw workmen carefully
nursing their jobs by the hour and doing next to nothing to avoid making
a record, and he was even more forcibly convinced of the necessity for a
change while he was still working as a machinist by being ordered by the
other men to slow down to half speed under penalty of being thrown over
the fence.
No one now doubts the economy of the drafting room, and the writer
predicts that in a very few years from now no one will doubt the economy
and necessity of the study of unit times and of the planning department.
Another point of analogy between modern engineering and modern
management lies in the fact that modern engineering proceeds with
comparative certainty to the design and construction of a machine or
structure of the maximum efficiency with the minimum weight and cost of
materials, while the old style engineering at best only approximated
these results and then only after a series of breakdowns, involving the
practical reconstruction of the machine and the lapse of a long period
of time. The ordinary system of management, owing to the lack of exact
information and precise methods, can only approximate to the desired
standard of high wages accompanied by low labor cost and then only
slowly, with marked irregularity in results, with continued opposition,
and, in many cases, with danger from strikes. Modern management, on the
other hand, proceeds slowly at first, but with directness and precision,
step by step, and, after the first few object lessons, almost without
opposition on the part of the men, to high wages and low labor cost; and
as is of great importance, it assigns wages to the men which are
uniformly fair. They are not demoralized, and their sense of justice
offended by receiving wages which are sometimes too low and at other
times entirely too high.
One of the marked advantages of scientific management lies in its
freedom from strikes. The writer has never been opposed by a strike,
although he has been engaged for a great part of his time since 1883 in
introducing this type of management in different parts of the country
and in a great variety of industries. The only case of which the writer
can think in which a strike under this system might be unavoidable would
be that in which most of the employees were members of a labor union,
and of a union whose rules were so inflexible and whose members were so
stubborn that they were unwilling to try any other system, even though
it assured them larger wages than their own. The writer has seen,
however, several times after the introduction of this system, the
members of labor unions who were working under it leave the union in
large numbers because they found that they could do better under the
operation of the system than under the laws of the union.
There is no question that the average individual accomplishes the most
when he either gives himself, or some one else assigns him, a definite
task, namely, a given amount of work which he must do within a given
time; and the more elementary the mind and character of the individual
the more necessary does it become that each task shall extend over a
short period of time only. No school teacher would think of telling
children in a general way to study a certain book or subject. It is
practically universal to assign each day a definite lesson beginning on
one specified page and line and ending on another; and the best progress
is made when the conditions are such that a definite study hour or
period can be assigned in. which the lesson must be learned. Most of us
remain, through a great part of our lives, in this respect, grown-up
children, and do our best only under pressure of a task of comparatively
short duration. Another and perhaps equally great advantage of assigning
a daily task as against ordinary piece work lies in the fact that the
success of a good workman or the failure of a poor one is thereby daily
and prominently called to the attention of the management. Many a poor
workman might be willing to go along in a slipshod way under ordinary
piece work, careless as to whether he fell off a little in his output or
not. Very few of them, however, would be willing to record a daily
failure to accomplish their task even if they were allowed to do so by
their foreman; and also since on ordinary piece work the price alone is
specified without limiting the time which the job is to take, a quite
large falling off in output can in many cases occur without coming to
the attention of the management at all. It is for these reasons that the
writer has above indicated "a large daily task" for each man as the
first of four principles which should be included in the best type of
management.
It is evident, however, that it is useless to assign a task unless at
the same time adequate measures are taken to enforce its accomplishment.
As Artemus Ward says, "I can call the spirits from the windy deep, but
damn `em they won't come!" It is to compel the completion of the daily
task then that two of the other principles are required, namely, "high
pay for success" and "loss in case of failure." The advantage of Mr. H.
L. Gantt's system of "task work with a bonus," and the writer's
"differential rate piece work" over the other systems lies in the fact
that with each of these the men automatically and daily receive either
an extra reward in case of complete success, or a distinct loss in case
they fall off even a little.
The four principles above referred to can be successfully applied either
under day work, piece work, task work with a bonus, or differential rate
piece work, and each of these systems has its own especial conditions
under which it is to be preferred to either of the other three. In no
case, however, should an attempt be made to apply these principles
unless accurate and thorough time study has previously been made of
every item entering into the day's task.
They should be applied under day work only when a number of
miscellaneous jobs have to be done day after day, none of which can
occupy the entire time of a man throughout the whole of a day and when
the time required to do each of these small jobs is likely to vary
somewhat each day. In this case a number of these jobs can be grouped
into a daily task which should be assigned, if practicable, to one man,
possibly even to two or three, but rarely to a gang of men of any size.
To illustrate: In a small boiler house in which there is no storage room
for coal, the work of wheeling the coal to the fireman, wheeling out the
ashes, helping clean fires and keeping the boiler room and the outside
of the boilers clean can be made into the daily task for a man, and if
these items do not sum up into a full day's work, on the average, other
duties can be added until a proper task is assured. Or, the various
details of sweeping, cleaning, and keeping a certain section of a shop
floor windows, machines, etc., in order can be united to form a task.
Or, in a small factory which turns out a uniform product and in uniform
quantities day after day, supplying raw materials to certain parts of
the factory and removing finished product from others may be coupled
with other definite duties to form a task. The task should call for a
large day's work, and the man should be paid more than the usual day's
pay so that the position will be sought for by first-class, ambitious
men. Clerical work can very properly be done by the task in this way,
although when there is enough of it, piece work at so much per entry is
to be preferred.
In all cases a clear cut, definite inspection of the task is desirable
at least once a day and sometimes twice. When a shop is not running at
night, a good time for this inspection is at seven o'clock in the
morning, for instance. The inspector should daily sign a printed card,
stating that he has inspected the work done by ----, and enumerating the
various items of the task. The card should state that the workman has
satisfactorily performed his task, "except the following items," which
should be enumerated in detail.
When men are working on task work by the day they should be made to
start to work at the regular starting hour. They should, however, have
no regular time for leaving. As soon as the task is finished they should
be allowed to go home; and, on the other hand, they should be made to
stay at work until their task is done, even if it lasts into the night,
no deduction being made for shorter hours nor extra pay allowed for
overtime. It is both inhuman and unwise to ask a man, working on task
work, to stay in the shop after his task is finished "to maintain the
discipline of the shop," as is frequently done. It only tends to make
men eye servants.
An amusing instance of the value of task work with freedom to leave when
the task is done was given the writer by his friend, Mr. Chas. D.
Rogers, for many years superintendent of the American Screw Works, of
Providence, R. I., one of the greatest mechanical geniuses and most
resourceful managers that this country has produced, but a man who,
owing to his great modesty, has never been fully appreciated outside of
those who know him well. Mr. Rogers tried several modifications of day
and piece work in an unsuccessful endeavor to get the children who were
engaged in sorting over the very small screws to do a fair day's work.
He finally met with great success by assigning to each child a fair
day's task and allowing him to go home and play as soon as his task was
done. Each child's playtime was his own and highly prized while the
greater part of his wages went to his parents.
Piece work embodying the task idea can be used to advantage when there
is enough work of the same general character to keep a number of men
busy regularly; such work, for instance, as the Bethlehem yard labor
previously described, or the work of bicycle ball inspection referred to
later on. In piece work of this class the task idea should always be
maintained by keeping it clearly before each man that his average daily
earnings must amount to a given high sum (as in the case of the
Bethlehem laborers, $1.85 per day), and that failure to average this
amount will surely result in his being laid off. It must be remembered
that on plain piece work the less competent workmen will always bring
what influence and pressure they can to cause the best men to slow down
towards their level and that the task idea is needed to counteract this
influence. Where the labor market is large enough to secure in a
reasonable time enough strictly first-class men, the piece work rates
should be fixed on such a basis that only a first-class man working at
his best can earn the average amount called for. This figure should be,
in the case of first-class men as stated above, from 30 per cent to 100
per cent beyond the wages usually paid. The task idea is emphasized with
this style of piece work by two things--the high wages and the laying
off, after a reasonable trial, of incompetent men; and for the success
of the system, the number of men employed on practically the same class
of work should be large enough for the workmen quite often to have the
object lesson of seeing men laid off for failing to earn high wages and
others substituted in their places.
There are comparatively few machine shops, or even manufacturing
establishments, in which the work is so uniform in its nature as to
employ enough men on the same grade of work and in sufficiently close
contact to one another to render piece work preferable to the other
systems. In the great majority of cases the work is so miscellaneous in
its nature as to call for the employment of workmen varying greatly in
their natural ability and attainments, all the way, for instance, from
the ordinary laborer, through the trained laborer, helper, rough
machinist, fitter, machine hand, to the highly skilled special or
all-round mechanic. And while in a large establishment there may be
often enough men of the same grade to warrant the adoption of piece work
with the task idea, yet, even in this case, they are generally so
scattered in different parts of the shop that laying off one of their
number for incompetence does not reach the others with sufficient force
to impress them with the necessity of keeping up with their task.
It is evident then that, in the great majority of cases, the four
leading principles in management can be best applied through either task
work with a bonus or the differential piece rate in spite of the slight
additional clerical work and the increased difficulty in planning ahead
incident to these systems of paying wages. Three of the principles of
management given above, namely, (a) a large daily task, (b) high pay for
success, and (c) loss in case of failure form the very essence of both
of these systems and act as a daily stimulant for the men. The fourth
principle of management is a necessary preliminary, since without having
first thoroughly standardized all of the conditions surrounding work,
neither of these two plans can be successfully applied.
In many cases the greatest good resulting from the application of these
systems of paying wages is the indirect gain which comes from the
enforced standardization of all details and conditions, large and small,
surrounding the work. All of the ordinary systems can be and are almost
always applied without adopting and maintaining thorough shop standards.
But the task idea can not be carried out without them.
The differential rate piece work is rather simpler in its application
than task work with bonus and is the more forceful of the two. It should
be used wherever it is practicable, but in no case until after all the
accompanying conditions have been perfected and completely standardized
and a thorough time study has been made of all of the elements of the
work. This system is particularly useful where the same kind of work is
repeated day after day, and also whenever the maximum possible output is
desired, which is almost always the case in the operation of expensive
machinery or of a plant occupying valuable ground or a large building.
It is more forceful than task work with a bonus because it not only
pulls the man up from the top but pushes him equally hard from the
bottom. Both of these systems give the workman a large extra reward when
he accomplishes his full task within the given time. With the
differential rate, if for any reason he fails to do his full task, he
not only loses the large extra premium which is paid for complete
success, but in addition he suffers the direct loss of the piece price
for each piece by which he falls short. Failure under the task with a
bonus system involves a corresponding loss of the extra premium or
bonus, but the workman, since he is paid a given price per hour,
receives his ordinary day's pay in case of failure and suffers no
additional loss beyond that of the extra premium whether he may have
fallen short of the task to the extent of one piece or a dozen.
In principle, these two systems appear to be almost identical, yet this
small difference, the slightly milder nature of task work with a bonus,
is sufficient to render it much more flexible and therefore applicable
to a large number of cases in which the differential rate system cannot
be used. Task work with a bonus was invented by Mr. H. L. Gantt, while
he was assisting the writer in organizing the Bethlehem Steel Company.
The possibilities of his system were immediately recognized by all of
the leading men engaged on the work, and long before it would have been
practicable to use the differential rate, work was started under this
plan. It was successful from the start, and steadily grew in volume and
in favor, and today is more extensively used than ever before.
Mr. Gantt's system is especially useful during the difficult and
delicate period of transition from the slow pace of ordinary day work to
the high speed which is the leading characteristic of good management.
During this period of transition in the past, a time was always reached
when a sudden long leap was taken from improved day work to some form of
piece work; and in making this jump many good men inevitably fell and
were lost from the procession. Mr. Gantt's system bridges over this
difficult stretch and enables the workman to go smoothly and with
gradually accelerated speed from the slower pace of improved day work to
the high speed of the new system.
It does not appear that Mr. Gantt has recognized the full advantages to
be derived through the proper application of his system during this
period of transition, at any rate he has failed to point them out in his
papers and to call the attention to the best method of applying his plan
in such cases.
No workman can be expected to do a piece of work the first time as fast
as he will later. It should also be recognized that it takes a certain
time for men who have worked at the ordinary slow rate of speed to
change to high speed. Mr. Gantt's plan can be adapted to meet both of
these conditions by allowing the workman to take a longer time to do the
job at first and yet earn his bonus; and later compelling him to finish
the job in the quickest time in order to get the premium. In all cases
it is of the utmost importance that each instruction card should state
the quickest time in which the workman will ultimately be called upon to
do the work. There will then be no temptation for the man to soldier
since he will see that the management know accurately how fast the work
can be done.
There is also a large class of work in addition to that of the period of
transition to which task work with a bonus is especially adapted. The
higher pressure of the differential rate is the stimulant required by
the workman to maintain a high rate of speed and secure high wages while
he has the steady swing that belongs to work which is repeated over and
over again. When, however, the work is of such variety that each day
presents an entirely new task, the pressure of the differential rate is
some times too severe. The chances of failing to quite reach the task
are greater in this class of work than in routine work; and in many such
cases it is better, owing to the increased difficulties, that the
workman should feel sure at least of his regular day's rate, which is
secured him by Mr. Gantt's system in case he falls short of the full
task. There is still another case of quite frequent occurrence in which
the flexibility of Mr. Gantt's plan makes it the most desirable. In many
establishments, particularly those doing an engineering business of
considerable variety or engaged in constructing and erecting
miscellaneous machinery, it is necessary to employ continuously a number
of especially skilful and high-priced mechanics. The particular work for
which these men are wanted comes, however, in many cases, at irregular
intervals, and there are frequently quite long waits between their
especial jobs. During such periods these men must be provided with work
which is ordinarily done by less efficient, lower priced men, and if a
proper piece price has been fixed on this work it would naturally be a
price suited to the less skilful men, and therefore too low for the men
in question. The alternative is presented of trying to compel these
especially skilled men to work for a lower price than they should
receive, or of fixing a special higher piece price for the work. Fixing
two prices for the same piece of work, one for the man who usually does
it and a higher price for the higher grade man, always causes the
greatest feeling of injustice and dissatisfaction in the man who is
discriminated against. With Mr. Gantt's plan the less skilledworkman
would recognize the justice of paying his more experienced companion
regularly a higher rate of wages by the day, yet when they were both
working on the same kind of work each man would receive the same extra
bonus for doing the full day's task. Thus, with Mr. Gantt's system, the
total day's pay of the higher classed man would be greater than that of
the less skilled man, even when on the same work, and the latter would
not begrudge it to him. We may say that the difference is one of
sentiment, yet sentiment plays an important part in all of our lives;
and sentiment is particularly strong in the workman when he believes a
direct injustice is being done him.
Mr. James M. Dodge, the distinguished Past President of The American
Society of Mechanical Engineers, has invented an ingenious system of
piece work which is adapted to meet this very case, and which has
especial advantages not possessed by any of the other plans.
It is clear, then, that in carrying out the task idea after the required
knowledge has been obtained through a study of unit times, each of the
four systems, (a) day work, (b) straight piece work, (c) task work with
a bonus, and (d) differential piece work, has its especial field of
usefulness, and that in every large establishment doing a variety of
work all four of these plans can and should be used at the same time.
Three of these systems were in use at the Bethlehem Steel Company when
the writer left there, and the fourth would have soon been started if he
had remained.
Before leaving this part of the book which has been devoted to pointing
out the value of. the daily task in management, it would seem desirable
to give an illustration of the value of the differential rate piece work
and also of the desirability of making each task as simple and short as
practicable.
The writer quotes as follows from a paper entitled "A Piece Rate
System," read by him before The American Society of Mechanical Engineers
in 1895:
"The first case in which a differential rate was applied during the year
1884, furnishes a good illustration of what can be accomplished by it. A
standard steel forging, many thousands of which are used each year, had
for several years been turned at the rate of from four to five per day
under the ordinary system of piece work, 50 cents per piece being the
price paid for the work. After analyzing the job, and determining the
shortest time required to do each of the elementary operations of which
it was composed, and then summing up the total, the writer became
convinced that it was possible to turn ten pieces a day. To finish the
forgings at this rate, however, the machinists were obliged to work at
their maximum pace from morning to night, and the lathes were run as
fast as the tools would allow, and under a heavy feed. Ordinary tempered
tools 1 inch by 1 1/2 inch, made of carbon tool steel, were used for
this work.
"It will be appreciated that this was a big day's work, both for men and
machines, when it is understood that it involved removing, with a single
16-inch lathe, having two saddles, an average of more than 800 lbs of
steel chips in ten hours. In place of the 50 cent rate, that they had
been paid before, the men were given 35 cents per piece when they turned
them at the speed of 10 per day; and when they produced less than ten
they received only 25 cents per piece.
"It took considerable trouble to induce the men to turn at this high
speed, since they did not at first fully appreciate that it was the
intention of the firm to allow them to earn permanently at the rate of
$3.50 per day. But from the day they first turned ten pieces to the
present time, a period of more than ten years, the men who understood
their work have scarcely failed a single day to turn at this rate.
Throughout that time until the beginning of the recent fall in the scale
of wages throughout the country, the rate was not cut.
"During this whole period, the competitors of the company never
succeeded in averaging over half of this production per lathe, although
they knew and even saw what was being done at Midvale. They, however,
did not allow their men to earn from over $2.00 to $2.50 per day, and so
never even approached the maximum output.
"The following table will show the economy of paying high wages under
the differential rate in doing the above job:
"COST OF PRODUCTION PER LATHE PER DAY
ORDINARY SYSTEM OF PIECE WORK--Man's wages $2.50 Machine cost 3.37 Total
cost per day 5.87 5 pieces produced; Cost per piece $1.17
DIFFERENTIAL RATE SYSTEM--Man's wages $3.50 Machine cost 3.37 Total cost
per day 6.87 10 pieces produced; Cost per piece $0.69
"The above result was mostly though not entirely due to the
differential rate. The superior system of managing all of the small
details of the shop counted for considerable."
The exceedingly dull times that began in July, 1893, and were
accompanied by a great fall in prices, rendered it necessary to lower
the wages of machinists throughout the country. The wages of the men in
A. the Midvale Steel Works were reduced at this time, and the change was
accepted by them as fair and just.
Throughout the works, however, the principle of the differential rate
was maintained, and was, and is still, fully appreciated by both the
management and men. Through some error at the time of the general
reduction of wages in 1893, the differential rate on the particular job
above referred to was removed, and a straight piece work rate of 25
cents per piece was substituted for it. The result of abandoning the
differential proved to be the best possible demonstration of its value.
Under straight piece work, the output immediately fell to between six
and eight pieces per day, and remained at this figure for several years,
although under the differential rate it had held throughout a long term
of years steadily at ten per day.
When work is to be repeated many times, the time study should be minute
and exact. Each job should be carefully subdivided into its elementary
operations, and each of these unit times should receive the most
thorough time study. In fixing the times for the tasks, and the piece
work rates on jobs of this class, the job should be subdivided into a
number of divisions, and a separate time and price assigned to each
division rather than to assign a single time and price for the whole
job. This should be done for several reasons, the most important of
which is that the average workman, in order to maintain a rapid pace,
should be given the opportunity of measuring his performance against the
task set him at frequent intervals. Many men are incapable of looking
very far ahead, but if they see a definite opportunity of earning so
many cents by working hard for so many minutes, they will avail
themselves of it.
As an illustration, the steel tires used on car wheels and locomotives
were originally turned in the Midvale Steel Works on piece work, a
single piece-work rate being paid for all of the work which could be
done on a tire at a single setting. A fixed price was paid for this
work, whether there was much or little metal to be removed, and on the
average this price was fair to the men. The apparent advantage of fixing
a fair average rate was, that it made rate-fixing exceedingly simple,
and saved clerk work in the time, cost and record keeping.
A careful time study, however, convinced the writer that for the reasons
given above most of the men failed to do their best. In place of the
single rate and time for all of the work done at a setting, the writer
subdivided tire-turning into a number of short operations, and fixed a
proper time and price, varying for each small job, according to the
amount of metal to be removed, and the hardness and diameter of the
tire. The effect of this subdivision was to increase the output, with
the same men, methods, and machines, at least thirty-three per cent.
As an illustration of the minuteness of this subdivision, an instruction
card similar to the one used is reproduced in Figure 1 on the next page.
(This card was about 7 inches long by 4 inches wide.)
[Transcriber's note -- Figure 1 not shown]
The cost of the additional clerk work involved in this change was so
insignificant that it practically did not affect the problem. This
principle of short tasks in tire turning was introduced by the writer in
the Midvale Steel Works in 1883 and is still in full use there, having
survived the test of over twenty years' trial with a change of
management.
In another establishment a differential rate was applied to tire
turning, with operations subdivided in this way, by adding fifteen per
cent to the pay of each tire turner whenever his daily or weekly piece
work earnings passed a given figure.
Another illustration of the application of this principle of measuring a
man's performance against a given task at frequent intervals to an
entirely different line of work may be of interest. For this purpose the
writer chooses the manufacture of bicycle balls in the works of the
Symonds Rolling Machine Company, in Fitchburg, Mass. All of the work
done in this factory was subjected to an accurate time study, and then
was changed from day to piece work, through the assistance of functional
foreman ship, etc. The particular operation to be described however, is
that of inspecting bicycle balls before they were finally boxed for
shipment. Many millions of these balls were inspected annually. When the
writer undertook to systematize this work, the factory had been running
for eight or ten years on ordinary day work, so that the various
employees were "old hands," and skilled at their jobs. The work of
inspection was done entirely by girls--about one hundred and twenty
being employed at it--all on day work.
This work consisted briefly in placing a row of small polished steel
balls on the back of the left hand, in the crease between two of the
fingers pressed together, and while they were rolled over and over, with
the aid of a magnet held in the right hand, they were minutely examined
in a strong light, and the defective balls picked out and thrown into
especial boxes. Four kinds of defects were looked for--dented, soft,
scratched, and fire cracked--and they were mostly 50 minute as to be
invisible to an eye not especially trained to this work. It required the
closest attention and concentration. The girls had worked on day work
for years, ten and one-half hours per day, with a Saturday half-holiday.
The first move before in any way stimulating them toward a larger output
was to insure against a falling off in quality. This was accomplished
through over-inspection. Four of the most trustworthy girls were given
each a lot of balls which had been examined the day before by one of the
regular inspectors. The number identifying the lot having been changed
by the foreman so that none of the over-inspectors knew whose work they
were examining. In addition, one of the lots inspected by the four
over-inspectors was examined on the following day by the chief
inspector, selected on account of her accuracy and integrity.
An effective expedient was adopted for checking the honesty and accuracy
of the over-inspection. Every two or three days a lot of balls was
especially prepared by the foreman, who counted out a definite number of
perfect balls, and added a recorded number of defective balls of each
kind. The inspectors had no means of distinguishing this lot from the
regular commercial lots. And in this way all temptation to slight their
work or make false returns was removed.
After insuring in this way against deterioration in quality, effective
means were at once adopted to increase the output. Improved day work was
substituted for the old slipshod method. An accurate daily record, both
as to quantity and quality, was kept for each inspector. In a
comparatively short time this enabled the foreman to stir the ambition
of all the inspectors by increasing the wages of those who turned out a
large quantity and good quality, at the same time lowering the pay of
those who fell short, and discharging others who proved to be
incorrigibly slow or careless. An accurate time study was made through
the use of a stop watch and record blanks, to determine how fast each
kind of inspection should be done. This showed that the girls spent a
considerable part of their time in partial idleness, talking and half
working, or in actually doing nothing.
Talking while at work was stopped by seating them far apart. The hours
of work were shortened from 10 1/2 per day, first to 9 1/2, and later to
8 1/2; a Saturday half holiday being given them even with the shorter
hours. Two recesses of ten minutes each were given them, in the middle
of the morning and afternoon, during which they were expected to leave
their seats, and were allowed to talk.
The shorter hours and improved conditions made it possible for the girls
to really work steadily, instead of pretending to do so. Piece work was
then introduced, a differential rate being paid, not for an increase in
output, but for greater accuracy in the inspection; the lots inspected
by the over-inspectors forming the basis for the payment of the
differential. The work of each girl was measured every hour, and they
were all informed whether they were keeping up with their tasks, or how
far they had fallen short and an assistant was sent by the foreman to
encourage those who were falling behind, and help them to catch up.
The principle of measuring the performance of each workman against a
standard at frequent intervals, of keeping them informed as to their
progress, and of sending an assistant to help those who were falling
down, was carried out throughout the works, and proved to be most
useful.
The final results of the improved system in the inspecting department
were as follows:
(a) Thirty-five girls did the work formerly done by one hundred and
twenty.
(b) The girls averaged from $6.50 to $9.00 per week instead of $3.50 to
$4.50, as formerly.
(c) They worked only 8 1/2 hours per day, with Saturday a half-holiday,
while they had formerly worked 10 1/2 hours per day.
(d) An accurate comparison of the balls which were inspected under the
old system of day work with those done under piece work, with
over-inspection, showed that, in spite of the large increase in output
per girl, there were 58 per cent more defective balls left in the
product as sold under day work than under piece work. In other words,
the accuracy of inspection under piece work was one-third greater than
that under day work.
That thirty-five girls were able to do the work which formerly required
about one hundred and twenty is due, not only to the improvement in the
work of each girl, owing to better methods, but to the weeding out of
the lazy and unpromising candidates, and the substitution of more
ambitious individuals.
A more interesting illustration of the effect of the improved conditions
and treatment is shown in the following comparison. Records were kept of
the work of ten girls, all "old hands," and good inspectors, and the
improvement made by these skilled hands is undoubtedly entirely due to
better management. All of these girls throughout the period of
comparison were engaged on the same kind of work, viz.: inspecting
bicycle balls, three-sixteenths of an inch in diameter.
The work of organization began in March, and although the records for
the first three months were not entirely clear, the increased output due
to better day work amounted undoubtedly to about 33 per cent. The
increase per day from June on day work, to July on piece work, the hours
each month being 10 1/2 per day, was 37 per cent. This increase was due
to the introduction of piece work. The increase per day from July to
August (the length of working days in July being 10 1/2 hours, and in
August 9 1/2 hours, both months piece work) was 33 per cent.
The increase from August to September (the length of working day in
August being 9 1/2 hours, and in September 8 1/2 hours) was 0.08 per
cent This means that the girls did practically the same amount of work
per day in September, in 8 1/2 hours, that they did in August in 9 1/2
hours.
To summarize: the same ten girls did on an average each day in
September, on piece work, when only working 8 1/2 hours per day, 2.42
times as much, or nearly two and one-half times as much, in a day (not
per hour, the increase per hour was of course much greater) as they had
done when working on day work in March with a working day of 10 1/2
hours. They earned $6.50 to $9.00 per week on piece work, while they had
only earned $3.50 to $4.50 on day work. The accuracy of inspection under
piece work was one-third greater than under day work.
The time study for this work was done by my friend, Sanford E. Thompson,
C. E. who also had the actual management of the girls throughout the
period of transition. At this time Mr. H. L. Gantt was general
superintendent of the company, and the work of systematizing was under
the general direction of the writer. It is, of course, evident that the
nature of the organizations required to manage different types of
business must vary to an enormous extent, from the simple tonnage works
(with its uniform product, which is best managed by a single strong man
who carries all of the details in his head and who, with a few
comparatively cheap assistants, pushes the enterprise through to
success) to the large machine works, doing a miscellaneous business,
with its intricate organization, in which the work of any one man
necessarily counts for but little.
It is this great difference in the type of the organization required
that so frequently renders managers who have been eminently successful
in one line utter failures when they undertake the direction of works of
a different kind. This is particularly true of men successful in tonnage
work who are placed in charge of shops involving much greater detail.
In selecting an organization for illustration, it would seem best to
choose one of the most elaborate. The manner in which this can be
simplified to suit a less intricate case will readily suggest itself to
any one interested in the subject. One of the most difficult works to
organize is that of a large engineering establishment building
miscellaneous machinery, and the writer has therefore chosen this for
description.
Practically all of the shops of this class are organized upon what may
be called the military plan. The orders from the general are transmitted
through the colonels, majors, captains, lieutenants and noncommissioned
officers to the men. In the same way the orders in industrial
establishments go from the manager through superintendents, foremen of
shops, assistant foremen and gang bosses to the men. In an establishment
of this kind the duties of the foremen, gang bosses, etc., are so
varied, and call for an amount of special information coupled with such
a variety of natural ability, that only men of unusual qualities to
start with, and who have had years of special training, can perform them
in a satisfactory manner. It is because of the difficulty--almost the
impossibility of getting suitable foremen and gang bosses, more than for
any other reason, that we so seldom hear of a miscellaneous machine
works starting in on a large scale and meeting with much, if any,
success for the first few years. This difficulty is not fully realized
by the managers of the old well established companies, since their
superintendents and assistants have grown up with the business, and have
been gradually worked into and fitted for their especial duties through
years of training and the process of natural selection. Even in these
establishments, however, this difficulty has impressed itself upon the
managers so forcibly that most of them have of late years spent
thousands of dollars in re-grouping their machine tools for the purpose
of making their foremanship more effective. The planers have been placed
in one group, slotters in another, lathes in another, etc., so as to
demand a smaller range of experience and less diversity of knowledge
from their respective foremen.
For an establishment, then, of this kind, starting up on a large scale,
it may be said to be an impossibility to get suitable superintendents
and foremen.
The writer found this difficulty at first to be an almost insurmountable
obstacle to his work in organizing manufacturing establishments; and
after years of experience, overcoming the opposition of the heads of
departments and the foremen and gang bosses, and training them to their
new duties, still remains the greatest problem in organization. The
writer has had comparatively little trouble in inducing workmen to
change their ways and to increase their speed, providing the proper
object lessons are presented to them, and time enough is allowed for
these to produce their effect. It is rarely the case, however, that
superintendents and foremen can find any reasons for changing their
methods, which, as far as they can see, have been successful. And
having, as a rule, obtained their positions owing to their unusual force
of character, and being accustomed daily to rule other men, their
opposition is generally effective.
In the writer's experience, almost all shops are under-officered.
Invariably the number of leading men employed is not sufficient to do
the work economically. Under the military type of organization, the
foreman is held responsible for the successful running of the entire
shop, and when we measure his duties by the standard of the four leading
principles of management above referred to, it becomes apparent that in
his case these conditions are as far as possible from being fulfilled.
His duties may be briefly enumerated in the following way. He must lay
out the work for the whole shop, see that each piece of work goes in the
proper order to the right machine, and that the man at the machine knows
just what is to be done and how he is to do it. He must see that the
work is not slighted, and that it is done fast, and all the while he
must look ahead a month or so, either to provide more men to do the work
or more work for the men to do. He must constantly discipline the men
and readjust their wages, and in addition to this must fix piece work
prices and supervise the timekeeping.
The first of the four leading principles in management calls for a
clearly defined and circumscribed task. Evidently the foreman's duties
are in no way clearly circumscribed. It is left each day entirely to his
judgment what small part of the mass of duties before him it is most
important for him to attend to, and he staggers along under this
fraction of the work for which he is responsible, leaving the balance to
be done in many cases as the gang bosses and workmen see fit. The second
principle calls for such conditions that the daily task can always be
accomplished. The conditions in his case are always such that it is
impossible for him to do it all, and he never even makes pretence of
fulfilling his entire task. The third and fourth principles call for
high pay in case the task is successfully done, and low pay in case of
failure. The failure to realize the first two conditions, however,
renders the application of the last two out of the question.
The foreman usually endeavors to lighten his burdens by delegating his
duties to the various assistant foremen or gang bosses in charge of
lathes, planers, milling machines, vise work, etc. Each of these men is
then called upon to perform duties of almost as great variety as those
of the foreman himself. The difficulty in obtaining in one man the
variety of special information and the different mental and moral
qualities necessary to perform all of the duties demanded of those men
has been clearly summarized in the following list of the nine qualities
which go to make up a well rounded man:
Brains.
Education.
Special or technical knowledge; manual dexterity or strength.
Tact.
Energy.
Grit.
Honesty.