CHAPTER III

WAGES AND PROGRESS

(_a_) ANTAGONISM BETWEEN EMPLOYER AND WORKER.

Let us try to see straight on this point.

First as to the relations between them. The employer wants to get as

much profit as he can, and, as wages are usually a large and a plastic

item in his expenditure, he always tries to cut down that item either

by lowering wages or by getting more work produced for the same wages.

"Low labour cost" is the continual cry of the employer.

Next, the average worker wants as much wages as he can get for as

little work as possible. He thinks that the less work he does the more

there is for somebody else, and it suits his nature to go easy. "High

wages and short hours" is the cry of the worker.

Is there anything to choose between them? Only the fact that, as the

employer's profits are so high and the worker's wages are so low, there

ought to be a better distribution of the wealth produced. Morally there

is nothing to choose between them, because each is trying to rob the

other. They cannot help it. Neither is to blame altogether; it is the

fault of the present industrial conditions. Under these conditions the

employer cannot give to the worker a fair share of the wealth produced.

To have a factory it is necessary to have capital. That capital has

been obtained from the surplus wealth produced by the worker. The

worker cannot work without the capital necessary to provide the tools

to work with and the material on which to work. Interest must be

paid on capital in order that the employer may live, and in order to

accumulate more capital, because there are more workers coming into

being every year, and they will want work and there must be capital to

provide the means necessary for that work.

And so the vicious circle goes on. It is not the fault of the employer;

it is not the fault of the worker. It is, I repeat, the fault of the

system.

Take any worker from his work and place him in charge of a factory with

a large capital, and ask him to run the business in competition with

other businesses; he would soon find how keen a man must be in order

to keep the business going successfully. Suppose the profits fell off,

what would our worker-employer do? Cut down wages, of course!

There is no getting away from it, and we must look the conditions

squarely in the face and blame neither employer nor worker overmuch.

Now, here is where the Reward System scores. The employer gets "low

labour costs"; the worker gets "high wages and shorter hours," with

good conditions and greater comfort added.

I am quite convinced that there will be less antagonism between them

under the Reward System than under any other. It keeps both up to the

mark, and it means a mutual dependence on each other and a mutual

interest in high and efficient production. An employer who pays wages

under the Reward System soon finds that he has adjusted his whole

establishment and sales policy on this basis. If he goes back to day

work or piece work, the labour costs go up instantly. So he must stick

to the system: it pays him to stick to it. Yet he dare not make things

too harsh for the worker; if he tries to do so, down comes efficiency.

And the essential items that make for efficiency are reasonable hours,

pleasant conditions of labour, and a reward in proportion to that

efficiency.

(_b_) TRADE-UNIONS AND THE REWARD SYSTEM.

The trade-unions must be properly organised to meet the new conditions.

The trained engineers of the unions should be thoroughly up to date

in their knowledge of all the branches of the trade. In connection

with engineering workshops, they should be acquainted with the latest

practice in all kinds of machines and tools, tool steels, methods of

cutting, and everything else bearing on the working of metals.

Such a trained engineer is worth a good deal to the union, and he

should be paid highly. The saving to the union cannot be adequately

calculated. In many cases an exhaustive inquiry into conditions of

work would often prevent an expensive strike or would smooth out

difficulties that tended towards a strike. Such a man should be

paid anything from L500 to L1,000 a year. This sounds a lot, but it

is absolutely essential for the unions to be in a position to let

the employer see that they know as much about the business as he

does--perhaps a bit more--and they cannot get the sort of man they need

for less.

The trade-union must also see that time studies are properly made. This

will be no part of the union's duty until disputes arise. If there is a

general complaint from any shop that time studies are unsatisfactory,

the trade-union engineer should be sent to the factory to study one or

two representative jobs.

He will do this side by side with the employer's engineer, and he must

allow the firm to choose the worker (who would, of course, be a union

man), so that there can be no complaint of unfairness and no accusation

can be made that the union desires to impose conditions on the employer.

A comparison between the times thus obtained and the firm's standard

times will show at once whether the complaint is well founded.

The allowances on the fastest time in order to obtain standard time

is a matter more open to arrangement. It is, in fact, one of the

most vital matters in connection with the time study system, and one

where the most unfairness will take place. But an approximate check

may be obtained because the handling times of each element of the job

can be totalled and the cutting times totalled, and according to the

circumstances of the case the allowances can be arranged.

The relation between reward and standard times is a simple matter.

It is only necessary to see that reward when standard efficiency is

reached is at least 25 per cent. of the day wage. That is to say, if

wages are 20s., the reward when the work reaches standard efficiency

should be 5s.; if wages are 30s., reward should be 7s. 6d.; if wages

are 40s., it should be 10s.

(_c_) SCIENTIFIC MANAGEMENT AND THE REWARD SYSTEM.

This Reward System, when based on time study, is a part of what is

called "scientific management," and cannot be carried on without

proper departments for standardising products and methods of

production, planning and routing the work, attending to tool repair

and replacement, examining and maintaining machine tools and driving

gear, keeping stores and stocks, inspecting the product, costing

production accurately, preventing waste, keeping the sales and

publicity department up to a high standard, and watching every phase

of the work so as to keep everything up to a high pitch of efficiency.

All this does not directly concern the worker. His chief interest lies

in whether his conditions of work are improved, whether he suffers less

fatigue, whether he gets more wages, whether he does his fellow-worker

no injury in earning high rewards If he is satisfied on these points,

then all the rest does not concern him.

Now, scientific management is not some fanciful suggestion that the

worker may accept if it pleases him, and refuse if it doesn't. It is

here already, and the war will cause an enormous increase in the number

of firms adopting it. And where scientific management is introduced,

efficiency in production follows--that is what it is for. The point is,

is the worker going to accept it and its consequences, understanding

it, seizing its good points, rejoicing in increased efficiency,

increased wages, and increased opportunities of a satisfactory life

which these things provide, or is he going to resent it and try to

fight it as his fathers fought against the introduction of machinery?

If he chooses the latter course, it means bitter antagonism, suspicion,

Labour troubles, instability of employment, low wages, loss of

earnings, and the whole of the intellectual forces of the country

will be against him, because the conditions after the war will demand

industrial peace if we are to maintain the commercial position we had

before the war. And in the end it will only mean a sullen acceptance of

defeat.

Would it not be better for the worker to get a clear understanding of

the system, welcome it for its advantages, and reserve all his strength

and power to adjust and preserve the bases upon which the payment of

labour depends in the various trades of the country?

It is quite true that the worker will work harder and will produce

considerably more; it is equally true that prices will be reduced in

consequence, and therefore more men will be required to make more

articles for the increased demand that is bound to follow the reduction

in price. In the long run, the system will mean employing more men

than would be employed under present methods, and they will be men of

high efficiency, and on the average of a better class, such men as

will greatly increase our national assets, and such as will maintain

our reputation in the markets of the world for the excellence and

durability of our manufactures.

In the clash of interests that will prevail for a time when the war

is over, the worker will have to decide whether to be the controller

of his own destinies or whether to become servile. Much depends on

the attitude of the skilled worker towards the capitalist. The burden

of debt left by the war _must_ be shouldered, and both interest and

repayment of loans must come from somewhere. Unless the worker is to

be ground to the dust, he must assert himself; but he will be utterly

ignored if a selfish and stubborn attitude be adopted, and he will be

driven by stress of the nation's adversity to accept what is offered

to him by the more far-seeing and powerful members of the State. This

means losing all the freedom that he fought for in the great war, and

it will put back the worker's progress for an indefinite number of

years.

Let him follow up the great sacrifices he has made during the war by

an intelligent understanding of the altered conditions, and the worker

will take an honoured place in the affairs of the State and share its

responsibilities and its benefits. If he is to take that place--and no

man has a better right to it--if he is to have a voice in the councils

of the nation that will compel attention and respect, will it come by

antagonism to progress and indifference to the general welfare, or by

organisation and efficiency?

The reply is obvious.

The organisation is the duty of the trade-unions, and the Reward System

is a method of providing the efficiency. These will compel the worker

to take a greater interest in his surroundings and in the way he is

governed. He will resent inefficiency in civic and national matters

when he realises how he suffers from its consequences and what perils

it brings upon him.

And it must always be remembered that the worker will owe nothing to

the employer in attaining this position; there will be no paternalism

or "giving shares for nothing" about it. It will be clean, honest hard

work and endeavour, and the employer will not only be giving nothing

away, but will actually profit by it.

And while each benefits by the efficiency of the other, the State will

benefit by both.

(_d_) THE FUTURE OF LABOUR.

How will this time study and Reward System affect the position of the

worker?

This is a very serious problem.

It is evident that a transmutation of labour is taking place and will

proceed more rapidly after the war.

Workers on the whole are becoming less skilled as craftsmen, and

machine attendants are taking the place of hand-skilled men.

it is quite impossible to stop this change. But what cannot be avoided

may possibly be controlled, and the trade-unions should endeavour

to direct these economic changes rather than to obstruct what is

inevitable.

Handicrafts can never wholly cease to exist, but the skilled fitter,

and more especially the skilled turner, finds machinery and methods of

using machinery encroaching more and more on his particular domain.

An unskilled man is given three or four weeks' tuition, and then,

if he shows sufficient intelligence, he is put on a machine with an

instruction card. The setter-up sets up the machine and gives advice

and surveillance, and the man is henceforth a tradesman, getting full

wages for that class of work.

The systemisation of production thus means a great increase in the

average skill of the workers as a whole. There are about 4,000,000

skilled workers who are members of trade-unions at the present time,

and this number will be greatly increased if the machine attendants of

the near future are absorbed by the unions. If the trade-unions are

to control the organisation of Labour, this new class of semi-skilled

workers must be absorbed either in one of the older unions, such as the

A.S.E., or else a new union must be formed for its accommodation. The

former would be by far the better arrangement.

At any rate, it will be fatal to allow this growing class to be at the

mercy of the employers. Such a state of affairs will mean not only the

exploitation of the new class, but the destruction of the old, because

the more intelligent men of the new class will be selected and trained

to take the place of trade-union men. This is a natural process, and is

not aimed at the destruction of the unions.

The general result will be to transfer craftsmanship from the craftsman

to the standards book. Then the instruction card will be made out from

the standards book and handed to the machine attendant, who will work

to it, and will earn something in excess of his weekly wages according

to his diligence and care in working to the instructions.

A new profession will result--indeed, has already resulted--one that

will employ many intelligent people: I refer to the profession of the

rational industry organiser.

It will mean, further, a great increase in the clerical staffs of firms

who adopt these systems.

Yet, again, it means a new trade, the trade of inspector, a trade

especially suitable for women on account of the lightness of the work

and the delicate handling of the gauges.

And, above all else, it means a great increase of production per man,

with a consequent lowering of prices. Now, a lowering of prices always

means a greater demand, which in its turn means more workers. Speaking

generally, any article made in very large quantities is sold to a great

number of people, which means that it is sold largely to the working

class. Therefore the reduction in price of an article tends to be to

the advantage of the workers--it would be more correct to say the

better-paid workers.

But now we come to the vital point in connection with all industry and

industrial systems--namely, the ultimate advantage or disadvantage to

the workers as a class.

The employer will, of course, endeavour to reduce wages, because the

semi-skilled labourer need not be paid so highly as the fully skilled

craftsman.

It is impossible to say what the trade-unions will do--whether they

will accept the situation and adopt sliding scales of wages for

different classes of labour, or whether they will insist on the same

wages being paid to all union members.

Of course, semi-skilled labour would be engaged almost always on

repetition work--work, that is, which lends itself excellently to the

Reward System. This system means, as I have shown, an addition to

the day rate of wages, and therefore the unions might arrange for a

lower wage to be paid to semi-skilled workers, and rely on individual

efficiency to bring wages approximately up to the union rate.

In such a case it would be necessary for the unions to see that at

"standard efficiency" the wages received were at least equal to the day

rate for skilled men, and that the tasks were set in such a manner that

this efficiency could be reached without excessive strain.

Skilled men would get the ordinary union rate, and if put on reward

their individual efficiency would bring the earnings to considerably

more than the highest earnings of semi-skilled workers.

This arrangement should be a satisfactory compromise between the

employer and the worker, but it can only be brought about by the Reward

System, or some similar method, and under trade-union control.

Unless such a compromise is attempted, industry will soon be in a state

of economic warfare, and the division of the workers into skilled

and semi-skilled camps will be disastrous. If the trade-unions lose

control over labour-not only skilled, but semi-skilled labour also--the

natural tendency will be for the employers to coerce and intimidate the

workers into accepting lower and still lower wages. Our tremendous war

indebtedness will provide the excuse, and a "free labour market" will

contribute to the success of this reduction.

There is a certain level of necessity to which wages always tend. If

wages are high, they tend to be reduced; if they are low, they tend

to increase. The tendency to reduction is due to the endeavour of the

employer to lower costs, and the acceptance, under pressure, of a lower

wage by the worker so long as the wage does not fall below the limit of

absolute necessity. The tendency to increase is due to the discontent

of the worker when wages are below the necessity level, this leading to

strikes, slacking, and inefficiency, which compel the employer to raise

wages in order to avoid excessive loss. I am speaking here of skilled

labour, where there is always more or less of a demand for workers. In

the case of unskilled labour, where the supply is always considerably

in excess of the demand, wages are always below the necessity level.

There is a constant "regression towards mediocrity," to use Galton's

phrase--in other words, a constant tendency towards the average. It is

because this average at present is an average of _necessity_ instead

of an average of _reasonable comfort_ that Labour troubles recur so

frequently; the slightest variation in the price of necessary articles

immediately affects the purchasing power of wages.

It is evident to all unbiased persons that no one can be efficient

without a certain minimum income based on comfort; a minimum based on

necessity means inefficiency, because no worker can be really efficient

when haunted by the constant fear of debt and misery and starvation.

And it is also evident that this minimum of comfort cannot be based

on the money a man receives as wages, but on what he needs. What

constitutes need is open to argument, but there are certain items of

necessity which are beyond dispute.

No matter where a person lives, he needs a good roof over his head,

food to eat, clothes to wear, fuel, household necessities, and a

surplus for emergencies. The cost of living differs in various parts of

the United Kingdom, and therefore there should be a scale of wages for

each district, based on the purchasing power of wages in that district.

This is recognised by the trade-unions, and in consequence union wages

are higher in London than in provincial towns.

In each district the amount of wages should be based on the price

of perishable articles--food, fuel, household necessities--in that

district.[1] It is an easy matter to record the prices of these

necessities: and if an annual revision of wages be made, the employer

cannot complain about excessive increases, because between one year and

another prices do not vary sufficiently to cause any great difference,

and all manufacturers would be affected the same way.

[1] What is necessary in the way of food, clothes, fuel, household

articles, rent, etc., in order to keep an average family in reasonable

comfort can easily be determined. I have worked this out in detail, but

it is hardly a subject for these notes.

Fixed items, such as rent, should be revised every five years or so.

Such an arrangement would mean basing wages on what may be termed

"reasonable comfort" instead of on necessity. This alteration of the

basis of wage calculation, together with the payment of a reward

for efficiency, would have a remarkable effect in lessening the

difficulties between Capital and Labour, and would make for a permanent

and progressive industrial peace.

(_e_) THE ACTUAL AND THE IDEAL.

Whenever scientific management is criticised, there seems to be a

tendency to avoid a comparison between the conditions of work under

scientific management and other _existing_ conditions. The comparison

generally drawn is between scientific management and some non-existent,

more or less ideal, condition imagined by the critic.

But we have to deal with immediate practical problems; with prevailing

conditions; with a non-producing investing society which is constantly

seeking profits; with masters who are in open or veiled antagonism

to the workers; with workers who have no chance of obtaining a real

education, and whose minds are so confused by the contradictory

statements made in the Press--their only means of becoming acquainted

with the broader aspects of citizenship--that they can rarely exercise

a balanced judgment on any subject. Any scheme of work and wages must

take into account these things as well as the present-day desires and

ambitions of the average worker, if it is to be of any real use or if

it is to assist the worker, consciously or unconsciously, towards the

attainment of what are considered better things.

The worker cares more for money than for anything else. In this he

is singularly like most other people. The aesthetic nature of his

surroundings when at work make little appeal to him, and no appeal at

all if two or three shillings a week are in the balance against it.

He does not know how his health improves and his efficiency increases

when he is in pleasant surroundings, and he will have no hesitation in

leaving a pleasant factory for a dismal one if he receives a slight

increase in wages by doing so.

Certain employers--Rowntree, Cadbury, Lever, for instance--after

becoming wealthy, try to improve the condition of their workers.

Increased efficiency is not their aim so much as making the lives of

their workers pleasant and happy. But it is impossible for all firms to

be wealthy, and there are few even among the wealthy who care how their

workers live; hence the multitude of repellent workshops up and down

the land.

Scientific management, however, starts in at the beginning with

pleasant conditions because it pays to have them. It is frankly

utilitarian, and if slavery in a dark house resulted in greater

efficiency, then that method would be adopted. But since it _does_

mean healthier and happier conditions, and more wages and greater

opportunities for a fuller life, why cling to worse conditions while

dreaming of some vague future state which is utterly outside present

practical possibilities?

That Capital is necessary is evident to everyone. Whether the

capitalist is necessary is open to argument, but we must accept him

for the present whether we like it or not. And, accepting him, we must

acknowledge that he has certain rights and privileges--rights and

privileges which so many of us are seeking for ourselves; for instance,

the right to control his capital, to increase it by any legitimate

means, to dispose of it in any way he chooses.

One of the ways of increasing capital is by lowering the cost of

production and thereby gaining a wider market. Better organisation and

the introduction of automatic machinery enable the capitalist to do

this. He risks his capital in the hope of greater returns, and no one

can deny him the right to better his organisation, to use his brains

and energy and wealth to attain this end.

One of the most striking and successful methods of organisation is

this of scientific management, of which the Reward System is a part.

To oppose the system, to oppose the introduction of machinery, is not

to make things better. If one could say we will not have efficient

management, we will not have automatic machinery, the case would be

different; but this system and this machinery were being introduced

before the war, and the installation of automatic machinery has been

increased enormously since the war began. This class of machinery

has come to stay, and, now that the urgency of war work has forced

engineers to realise their possibilities, they are looking forward to

the application of automatic machines to thousands of jobs that were

previously done on general machines.

Now, automatic machinery is the same under any system of management or

wage payment. The same amount of manual skill is required, and the same

amount of mental application. But whereas day work means constant close

supervision by the foreman, and piece work means mutual dishonesty, the

Reward System means a keen interest in both the quality and quantity of

the work produced.

Under what system can work on automatic machines be made pleasant? The

usual reply of the idealist is to draw a comparison between handicrafts

and automatic machinery, dwelling on the skill and interest and beauty

of the one and the deadening monotony of the other. But when a man is

compelled to take up a handicraft for the sake of a living--and this

always _was_ the case--there is not so much difference between being

compelled to work on an automatic machine and being compelled, for

example, to throw a shuttle through the frame of a hand loom, which is

but a man-driven machine, after all. And, to be fair, the comparison

should be completed, and the comparative luxury enjoyed by present

workers set against the bare, cheerless existence of the artisan of the

Middle Ages.

It is assumed that the craftsman of those days had a tremendous pride

in his work, but it is to be doubted whether he was really so proud all

the time of the work whereby he earned a miserable pittance. How many

of those workers would gladly have given up their beloved crafts and

tended automatic machinery if they could have obtained the conditions

of the present day by doing so!

The conditions obtaining in the Ford motor factories at present show

what influences and governs the actions of the worker. Mr. Henry Ford

put into practice a bonus scheme which included all workers who had

certain qualifications. For some time after this became known the

Ford Company received over one thousand letters a day from workers

desiring employment. The conditions of the work did not weigh with

them at all, but, Mr. Ford being what he is, the conditions were, of

course, excellent. This gave the Ford Company the pick of the workers

of the United States. As far as can be ascertained, there is great

satisfaction among the Ford workers, and it is considered a privilege

to get a situation with the Ford Company. Now, an essential feature of

the work in this firm is team work. The work is split up into small

elements arranged so that, as the work is passed from one worker to

another, the least time is taken on each element. Repetition work is

the order of the day, and even the man whose work for over three years

was to give two turns to No. 16 nut did not leave because the work was

too monotonous.

The fact remains that, as a rule, workers do not object to monotony so

long as they are well paid for the work, and there does not appear to

be any increase of idiocy in the Ford shops owing to the dulness and

once-and-for-ever nature of the work.

To produce work by handicraft means a life of unremitting toil for

the craftsman, and even then the cost of the finished article is so

great, if the worker is to get but a very moderate return, that only

the wealthy could buy it. This postulates a wealthy class which is

diametrically opposed to the principles of the idealist.

The craftsman would have neither leisure nor opportunity for the study

and appreciation of finer things, and in the end it means poverty, and

poverty means ignorance and misery.[2]

[2] Since writing this paragraph I have found the following statement

in Mr. Graham Wallas's book, "The Great Society" (p. 347): "It is true

that Morris, for all his greatness, never faced the fact that we cannot

both eat our cake and have it; cannot use slow methods of production,

and also turn out without overwork large quantities of consumable

wealth. Once, while I listened to him lecturing, I made a rough

calculation that the citizens of his commonwealth, in order to produce

by the methods he advocated the quantity of beautiful and delicious

things which they were to enjoy, would have to work about two hundred

hours a week. It was only the same fact looked at from another point of

view which made it impossible for any of Morris's workmen, or, indeed,

for anyone at all whose income was near the present English average,

to buy the products either of Morris's workshop at Merton or of his

Kelmscott Press. There is no more pitiful tragedy than that of the

many followers of Tolstoy, who, without Tolstoy's genius or inherited

wealth, were slowly worn down by sheer want in the struggle to live the

peasant life which he preached."

We must accept the fact that wealth is the product of machinery or

of some worse form of slavery, and, for my part, I prefer it to be

produced by machinery.

Besides all this, machinery is here, and to do without it is absolutely

impossible--as impossible as it is for a highly developed organism to

revert to its primitive state.

Where shall we draw the line and say, We will have no more machinery

than we have at present? We cannot do so; it is manifestly impossible.

Where, then, shall we draw the line and say, This work must be done by

hand and not by machine; this work must be done on a general machine

and not on an automatic; this work must be done by a single man and

not by a team of men; this work must be done under this or that

old-fashioned system and not under a well-organised system? These lines

can never be drawn. Progress, by its very nature, will crush whatever

opposes it, even though it has no intention of doing so. And it is

not desirable to oppose progress if we desire to live and develop. As

automatic machinery is the extreme end of one line of progress, so it

is undesirable to sweep it away, even if it were possible.

Now, automatic machinery means cheap production, and this means

more wealth. More wealth ought to mean more leisure for everybody.

In order to make the best use of leisure, better education, real

education, is needed--education in reasoning, in science, in civics, in

art, in economics, in freedom.

The trade-unions are not educational; it is no part of their programme.

The workers depend on their opponents for their education. Instead of

curtailing wealth, the trade-unions should endeavour to control the

production and distribution of it, to divert it so that it will benefit

the workers, in order that both leisure and education may be theirs.

Under any conceivable system, the man who has the energy and initiative

of the man who at present becomes a capitalist would always be a more

important and better paid or better rewarded man than the worker. But

he would be a leader and not a driver, and whatever he possessed would

be looked upon by those who worked under him as a natural and righteous

return for his ability. I merely mention this because trade-union

control is no menace to the progress and success of the man of ability.

Finally, let me say that, if we must have cheap production, if we

must have better organisation and make more and more use of machinery,

if we must increase each man's output in order to meet the financial

necessities of the immediate future, what method shall we adopt? Is

it to be day work or piece work? Is it to be co-partnership or profit

sharing that tend to rob a man of his liberty and turn him into a

miniature capitalist? Or is it by such a method as this Reward System,

whereby a man retains his full liberty, where his work is made more

interesting, where he does no harm to his fellow-workers by earning

high wages, where his trade-union is his stand-by?

These are the ways, the practical available ways, that confront the

worker. It is easy to imagine pleasanter ways, but the devil drives and

we have to decide now. The trade-unions would be wise to give close

attention to the Reward System and that greater organisation of which

it is a part. With trade-union support it will become one of the most

satisfactory solutions of the differences between worker and employer;

without trade-union support no system will be satisfactory.

It is not efficiency for efficiency's sake that is the issue.

Efficiency is only a means to an end, to the end that the worker

eventually may be in a position to exercise some control over the

making and distribution of wealth. Present conditions drive him farther

and farther from that end, and only education, better conditions

of living, a certain amount of leisure, and a desire to undertake

responsibility, will enable him to achieve it. Following on that will

come the realisation of what efficiency would mean applied to the

general production and distribution of commodities, to education, to

the affairs of State, and with that comes the desire to control, and

after that, again--well, perhaps Idealist will begin to see daylight!

These notes are not concerned with the essential rightness or

otherwise of this or any other system of wage payment, or of the

wages system itself, or of the Capitalist System. These are matters

altogether outside the subject. These notes are only written because

the writer considers the Reward System, when properly carried out,

to be the best of several existing methods of payment for work done;

and as this particular method will be adopted more and more, and as

it undoubtedly leads to greater production and is to the direct and

immediate advantage of the worker, those concerned with the welfare of

the worker ought to consider the system in all its bearings, and not

hurriedly condemn it because it is new, because it is American, and

because it increases the productivity of the worker. If there is any

practical scheme that can be immediately adopted and will appeal as

strongly to both worker and employer, by all means let us have it and

abolish existing methods of wage payment altogether.

PART II

AN APPLICATION OF THE

PRINCIPLES TO A PARTICULAR

CASE

CHAPTER IV

WORK AND REWARD

The following is a description of one particular method of the time

study and reward payment following out the principles described in

Part I. This particular case is one which has been introduced into two

engineering factories in England.

It must be understood that the methods described are not necessarily

those which apply in all factories. Only the basic principles have been

described in Part I., and only one particular method of application is

described in Part II. Almost every shop will have its special details,

its individuality, and different trades will differ widely in the

carrying out of the principles. Manufacturing machinery, laying bricks,

sewing shirts, shaving, etc., cannot all be brought under one exact

scheme. But all must have time study and reward payment in proportion

to efficiency as a foundation on which to build a superstructure

of sound economical business management with satisfactory labour

conditions.

There will be an occasional repetition of points dwelt upon in Part I.,

but this is in order that the detailed description will be complete in

itself.

(_a_) ROUTING THE WORK.

When an order is received for a certain quantity of any article, the

first thing to do is to make a drawing of the article, and, following

on that, all the operations to be done on it are studied in the drawing

office.

The kind of metal is decided on; which operation must be done first

and which next; which machine each operation must be done on; how many

operations can be done on one machine and with one setting up of the

article; which tools to use; how fast the machines must run; what speed

and depth of cut is best; what cutting compound to use, etc.

Then a time study is made of the job as it goes through the various

operations on each machine.

It depends on the nature of the work how this study is made. On

automatic machines the output depends largely on the speeds of the

machines and the moving of the turret, and these can be calculated

from the countershaft speeds, the gears, and the cams. On other work,

however, where each job has to be set up and taken down, and where

tools have to be brought into position by hand, it is necessary to

watch all the processes and movements carefully, so as to discover the

best and quickest way of doing it.

On hand work it is the same, but there is more scope for motion

study--that is, moving the job and working on it with the least number

of movements.

A good average worker is chosen, and is paid time and a quarter during

the study.

After the job has been done a few times in order that the worker

may become familiar with it, to see that the tools and speeds are

satisfactory, and to cut out useless motions, the time study is made,

every detail being observed carefully.

The reason for separating the job into its details or elements is in

order to see that each detail receives careful attention, for only in

this way can the best method of doing the job be found. The essence of

the system is that the best methods shall be found for all the details,

and the record thus obtained puts all the workers on the same basis.

It must be particularly noted that the time study is not for the

purpose of driving the worker. The study of the job is really a

process study, and method after method is tried until the best way of

doing the work has been determined. Then, and then only, the time is

taken--not for purpose of driving to get a shorter time, but to record

the actual time in which the work has been done under certain special

conditions. The process study, together with the time recording, form

what is called the "time study," which is a permanent record of all the

circumstances under which the job has been done, _including_ the time

taken, so that when the job has to be repeated all the conditions are

known accurately and immediately. This should be borne in mind both by

the worker and the employer.

(_b_) THE TIME STUDY.

A time study sheet is filled in with the general information connected

with the job, and also a dimensioned sketch of the article in the

finished condition. (If necessary, a sketch or the dimensions of the

article before machining are also given.)

Methods of tool setting are given, and also description and details of

fixing any jigs, carriers, clamps, etc.

Each element of the operation, from picking it up and putting it on

the machine bed to taking it off when finished, is put in a column in

sequence on the left side of the sheet. Even an element which requires

only a few seconds to perform is entered separately.

There are several columns for entering the times of the elements, one

column for each complete operation.

The time study engineer stands where he may see every motion of the

machine and every movement of the hand. The stop-watch is mounted on

the same board as the time study sheet, so that they can be held in one

hand while the times are jotted down with the other.

The watch is set to 0, and the figure is entered against the first

element. When the operation begins, the watch is started, and at the

end of the first element the time is noted and set down. The watch is

not stopped, and therefore each element time consists of the watch

reading of the last element subtracted from the reading of the element

under consideration. For instance:

TIME STUDY READING.

-----------------+---------------+---------------+---------------+-------

Element. | 1st Timing. | 2nd Timing. | 3rd Timing. |

---+-------------+-------+-------+-------+-------+-------+-------+Average

No.| Name. |Reading| Time |Reading| Time |Reading| Time | Time

| |(Mins.)|(Mins.)|(Mins.)|(Mins.)|(Mins.)|(Mins.)|(Mins.)

---+-------------+-------+-------+-------+-------+-------+-------+-------

| | 0.00 | | 0.00 | | 0.00 | |

1 | Set up +-------+ 3.40 +-------+ 3.20 +-------+ 3.36 | 3.32

| | | | | | | |

|-------------+ 3.40 +-------+ 3.20 +-------+ 3.36 +-------+

| | | | | | | |

2 | Turn face +-------+ 2.70 +-------+ 3.00 +-------+ 2.88 + 2.86

| | | | | | | |

+-------------+ 6.10 +-------+ 6.20 +-------+ 6.24 +-------+

| | | | | | | |

3 | Turn radius +-------+ 1.10 +-------+ 0.90 +-------+ 1.06 | 1.02

| | | | | | | |

+-------------+ 7.20 +-------+ 7.10 +-------+ 7.30 +-------+

| Turn | | | | | | |

4 | Periphery +-------+ 1.00 +-------+ 1.20 +-------+ 1.12 | 1.11

| | | | | | | |

+-------------+ 8.20 +-------+ 8.30 +-------+ 8.42 +-------+

| | | | | | | |

5 | Bore +-------+ 2.30 +-------+ 2.80 +-------+ 2.61 | 2.57

| | | | | | | |

|-------------+ 10.50 +-------+ 11.10 +-------+ 11.03 +-------+

| | | | | | | |

6 | Tap +-------+ 1.80 +-------+ 2.10 +-------+ 1.93 | 1.94

| | | | | | | |

+-------------+ 12.30 +-------+ 13.20 +-------+ 12.96 +-------+

| | | | | | | |

7 | Take down +-------+ 0.40 +-------+ 0.35 +-------+ 0.34 | 0.30

| | | | | | | |

+-------------+ 12.70 +-------+ 13.55 +-------+ 13.30 +-------+

| | | | | | | |

| +-------+ +-------+ +-------+ +------

|Total (mins.)| 12.70 | | 13.55 | | 13.30 | | 13.18

---+-------------+-------+-------+-------+-------+-------+-------+------

It will be seen that the watch is not stopped until the end of the

complete operation, and therefore the last reading indicates how long

the operation has taken; it is the sum of all the elements.

If anything happens which is not a part of the operation--for instance,

if a tool needs replacing owing to accident or becoming dull too

quickly, or if a belt breaks--the watch is stopped, and when the

operation begins again it is started and goes on from the point where

it stopped.

During the timing, observations are made to determine whether any part

of the operation may be done in a quicker or easier way, or whether any

element is taking longer than it ought to do.

It must be particularly noted that there is a distinct difference

between time study and time recording. Any job, the slowest or fastest

in the whole factory, may be time-recorded by merely observing the time

with a stop-watch, but this is not a time _study_.

When several sets of figures have been obtained, the number of sets

depending on the circumstances, the timing part of the study is over.

The figures are now examined. The time of each element is obtained as

described in the example. In noticing the times of any one element,

times which are much less or much greater than the others are

eliminated, and the average of the remaining times is taken. Then all

these averages are added together, and the average time of the complete

operation is thus obtained.

This time is considered to be the fastest time in which the operation

can be done. It is not actually the fastest for two reasons. One is

that any time so obtained may be improved on when the worker becomes

thoroughly used to the job, and the other is that a good _average_

worker is chosen for the time study; therefore a first-class man can

improve on the time obtained.

But it is considered to be the fastest time, and we will call it the

base time.

Now, this time has been obtained under exceptional circumstances. When

a man is working on a time study job--that is, with the knowledge that

he is on trial, so to speak, and with the time study engineer timing

and observing every detail and motion--he works faster than usual.

There is no opportunity for little breaks, or rests, or breathing

spaces; it is hard slogging all the time. The time study engineer does

not intend it to be so, but by the nature of the circumstances that is

what happens, and no man can keep this up for long.

It is quite evident, therefore, that this time cannot be reached

regularly by every worker, and this is taken into consideration when

determining the standard time--_i.e._, the time in which the job should

be done by the average worker.

To obtain the standard time an allowance is made on the base time. This

allowance depends on the nature of the work, a higher allowance being

made for jobs that need a good deal of handling than for jobs that are

nearly all cutting, because cutting is independent of the worker.

The way to arrive at the allowance is to examine the recorded figures,

and add together all the cutting times and then all the handling times.

An allowance of about 10 per cent. is usually given on the cutting

times, and from 15 per cent. to 50 per cent., or even more, on handling

times. The cutting times depend on the machinery, and that is why a

smaller allowance is given for them.

(_c_) FIXING STANDARD TIME.

This standard time is the basis of the Reward System, and is therefore

the most important time. It is so fixed in relation to base time that

every worker put on that work should be able to reach it after a little

practice. If he does so, he is said to have reached an efficiency of

100 per cent.

A worker who reaches continuously 100 per cent. is a high efficiency

man.

This efficiency should always be reached by a worker who follows the

instructions and works diligently.

Reward begins, however, considerably before this point is reached,

because it may be necessary for a worker to be on a job some time

before he reaches a high efficiency. Again, sometimes one worker is

naturally slower than another; and although his work is good, he can

reach 100 per cent. efficiency only by special effort. There would

be little encouragement if reward did not begin until the worker had

reached 100 per cent. efficiency.

For these reasons, and as an incentive to every man to become as highly

efficient as possible, reward begins when the worker reaches 75 per

cent. efficiency.

This means that an allowance of 33-1/3 per cent. is given on the

standard time or standard production, and this new figure is called

"reward time" or "reward production" because it is the point where

reward begins.

The following examples will make the matter clearer:

Let us assume that the time in which the job can be done is found

by the time study to be 12 hours; this is the base time, and can be

reached or even exceeded under favourable circumstances, because in the

first place it has already been reached during the time study, and in

the second place the worker on the time study was a good _average_ man,

so that a _first-class_ man should be able to do the job in quicker

time.

Now, suppose the job needs a good deal of handling. In such a case

the time will be increased by, say, 25 per cent. in order to obtain

the standard time; 25 per cent. of 12 hours is 3 hours, so that the

standard time is 12 + 3 = 15 hours. Therefore, if the worker does the

job in 15 hours, he has reached 100 per cent. efficiency, which is the

point to be aimed at. It should always be attained by every worker who

follows the instructions accurately and works diligently, while a good

worker should always be able to do it in less time.

The point when reward begins is arrived at by adding 33-1/3 per cent.

to the standard time--that is, 15 hours with 33-1/3 per cent. of 15

hours added; 33-1/3 per cent. of 15 is 5, and 15 + 5 = 20 hours. Reward

is earned, therefore, when the job is done in anything less than 20

hours.

It will be seen that, while it is quite possible to do the job in 12

hours or even less, yet if the job be done in anything under 20 hours

reward is earned.

What amount of reward? Well, suppose the job rate is 36s. This means

that the job is given to a worker whose day wage is about 36s. per

week. This is 9d. an hour on a 48-hour week. Suppose the work is done

in 16-1/2 hours. As the standard time is 15 hours, the job has taken

longer than standard time; it is 1-1/2 hours longer than standard. But,

as the reward time is 20 hours, it has been done in 3-1/2 hours less

than reward time; in other words, 3-1/2 hours have been saved on the

job. The worker gets paid for all the time he saves = 3-1/2 hours at

9d. per hour; total reward 2s. 7-1/2d. So that for his 16-1/2 hours'

work he gets his day wage of 9d. per hour (= 12s. 4-1/2d.) + a reward

of 2s. 7-1/2d.--that is, 15s. in all. In other words, he earns 11d.

per hour instead of 9d. per hour.

His efficiency is 91 per cent., but efficiency calculation will be

mentioned later.

Let us now examine another case, a small part job. We will assume that

the time study shows a production of 40 of these small parts per hour.

We have now shifted from times to quantities. The base quantity is 40

per hour, that number being the greatest number produced by a good

average worker in 1 hour under favourable circumstances. The standard

quantity will, of course, be less than this, and, as such work would

probably be done on an automatic machine with practically no hand work,

an allowance of 10 per cent. is made on the base quantity in order to

obtain the standard quantity. Ten per cent. of 40 is 4; therefore the

standard quantity is 40-4 = 36. This is the quantity the worker ought

to produce continuously if he is diligent and attends to the machine

properly.

As before, reward begins at an earlier point than standard. That is to

say, if a smaller quantity than 36 be produced reward is earned, but a

certain minimum quantity must be produced before reward begins. This

minimum quantity is called "reward production," and begins at 75 per

cent. of the standard production. (36 x 75)/100 = 27.0, and this is the

reward production for one hour, reward being paid on any excess above

this.

Let us assume that a worker is 6 hours on this work, and in that time

produces 220 pieces. The reward quantity is 27 per hour, and for the 6

hours is 27 x 6 = 162. The job rate is, say, 24s., because this work

would be done by unskilled or partially skilled labour. This is 6d. per

hour, and if the worker produces 27 or less pieces per hour that is

what he receives. If he produces more than 27 per hour, he gets paid at

the rate of 6d. per 27 for the excess, this being equivalent to being

paid for all the time saved.

The production in 6 hours is 220; the reward quantity for that time is

162, and the standard quantity 216. It is seen that efficiency in this

case is over 100 per cent., because 220 is 4 more than standard. Reward

is paid on 220-162 = 58, and payment is made at the rate of 6d. for

each 27. If we divide 58 by 27, and multiply the result by 6d., this

will give the amount of reward--namely, 1s. This is the reward for 6

hours' work, and is 2d. per hour, so that the worker gets 8d. per hour

instead of 6d.

Efficiency is about 102 per cent.

The following shows these examples in tabular form:

I.

Base time 12 hours

Standard time 15 "

Reward time 20 "

Time taken 16-1/2 "

Time saved 3-1/2 "

Job rate per hour 9d.

Reward 3-1/2 x 9 = 2s. 8d.

Total reward for week if reward is earned at

same rate all the week (namely, 48 hours) 7s. 9d.

Total earnings .. .. .. 36s. + 7s. 9d. = 43s. 9d.

II.

Base quantity 40 per hour

Standard quantity 36 "

Reward quantity 27 "

Time worked 6 hours

Quantity produced 220

Reward quantity for 6 hours 162

Excess quantity 58

Reward at 27 for 6d. 1s.

Total reward for week if reward is earned

at same rate all the week (namely, 48

hours) 8s.

Total earnings 24s. + 8s. = 32s.

The foregoing examples are of average workers. The following is an

example of what a good worker can do, and, as the method of calculation

is given above, a tabular statement is all that is necessary:

III.

Base time 8 hours

Standard time (base + 25%) 10 "

Reward time (standard + 33-1/3%) 13.3 "

Time taken 8.5 "

Time saved 13.3 - 8.5 = 4.8 "

Job rate per hour 9d.

Reward 9 x 4.8= 3s. 7d.

Total reward for week if reward is earned

all week at same rate 20s. 2d.

Total earnings 36s + 20s. 2d. = 56s. 2d.

Efficiency 117.5%

The result is not an exceptional one.

(_d_) THE INSTRUCTION CARD.

After the time study has been made, an instruction card is made out for

the job. On this card all the particulars are given--how to do the job,

the sequence of operations, the tools to be used, the base, standard

and reward times or productions, the job rate, and any other necessary

information.

It is by acting in accordance with the instructions on the card that

the worker can reach standard time regularly, and the foreman or

setter-up and the superintendent are always ready to assist the worker

in every way to attain this result.

If the operator finds he cannot reach standard time by diligent

work and following the instructions, he should always inform the

superintendent, in order that the matter may be investigated.

(_e_) SPOILED WORK.

The question of spoiled work must be taken into account. It is almost

impossible for all the work produced to pass inspection. Machines may

not work quite right; tools become dull; material is not always the

same; workers sometimes get careless.

How is this spoiled work to be dealt with?

It would be quite unfair to make the worker responsible for bad work

which was due to no fault of his. It would be equally unfair for him to

get paid for bad work which was due to his own carelessness or neglect.

When work is inspected, and some of it found to be bad, it is not

difficult as a rule to find where the fault for this bad work lies. If

it is due to bad material or bad machining, the question arises of how

far the worker is to blame. He should stop his machine and call the

attention of the foreman to any fault of tools or material. If too deep

a cut be taken, or if a part be badly worked by hand tools, this is the

worker's fault.

Work which is spoiled by the worker or by his neglect is deducted from

his gross production, and his reward is reduced accordingly.

It is quite possible that, if a large amount of bad work be produced,

and the worker's total production be not very high, the amount to

be deducted is greater than the amount of reward. In such a case

nothing is deducted from his day wage, and nothing is held over to be

deducted from reward earned in a later week. For instance, suppose a

worker receives a day wage of 36s. per week. Then suppose his total

production would bring him a reward of 10s., but that deductions on

account of spoiled work amounted to 8s. His wages for that week would

be 36s. + 10s. = 46s.--less 8s. = 38s. net. Now, if reward due to total

production was 6s., and spoiled work amounted to 10s., then if spoiled

work were deducted in full he would get 36s. + 6s. =42s.--less 10s. =

32s. net (namely, 4s. less than his day wage). But this is never done.

He gets his full 36s., and the 4s. is cancelled altogether. Each week

is taken entirely by itself, and the day wage for the week is always

guaranteed, whatever happens in connection with the work or the reward.

If any of the spoiled work be rectifiable, this does not interfere

with the deduction. It means that, in order to make the article pass

inspection, more work, more inspection, and more supervision, must be

done on it.

(_f_) ALLOWANCES.

It happens quite frequently that stoppages occur during the progress of

the work. For instance, the worker may have to wait for material; the

driving belt may need tightening; tools may need changing at odd times

not recorded in the instructions; metal may be hard or bad, thereby

necessitating a reduction in speed--and so on.

All these things result in a reduction in the quantity of articles

produced, and none of them is due to the fault of the operator.

In such cases the worker either clocks off or receives a day time

allowance. He clocks off when his machine is actually stopped for

fifteen minutes or more at one time. If he has several short stoppages,

the foreman adds the times together and writes a day time allowance for

the whole on the worker's operation card. If it be necessary to reduce

the speed of the machine on account of hard metal, bad material, tools

not tempered correctly, or anything that tends to lower production

without actually stopping the machine, a day time allowance is made and

written on the operation card; or in some cases the standard time is

increased, thus giving a longer time in which to do the job.

Clocking and day time allowances mean that this time is deducted from

the time on reward. For example, suppose the machine is stopped for 1

hour during a job that has the standard time of 7 hours, and suppose

the time from start to finish is 8-1/2 hours. The 1 hour is subtracted

from the 8-1/2 and is paid for at day rate, the time for the job being

calculated to be 7-1/2 hours.

If during the week there are day time allowances of 7 hours, then there

are 41 reward hours and 7 day time hours.

The effect of making day time allowances is to increase the reward, as

will be seen from the following example:

Assume that during 20 hours 500 small pieces are produced, and that

the machine stops 4 hours out of the 20. If the production be spread

over the whole 20 hours and reward production be 24 per hour, the

reward quantity is 20 x 24 = 480. Reward is therefore paid on 500-480

= 20 pieces. If the 4 hours be deducted, the net time on reward is 16

hours, not 20, and the reward quantity for the 16 hours is 16 x 24 =

384. Reward is paid on 500-384 = 116 pieces, instead of 20. Let the job

rate be 8d. per hour. Then, as the reward production is 24 per hour,

this means that the worker receives 8d. for each 24 pieces; the reward

on 20 pieces at 24 for 8d. = 6-1/2d., while the reward on 116 pieces

= 3s. 3d. This shows how important it is to get the proper day time

allowances. The 4 hours are, of course, paid for at the worker's day

rate.

(_g_) EFFICIENCY CALCULATION.

Efficiency is the percentage ratio between the time it takes to do the

job and the standard time. Or, if we are dealing with quantities, the

percentage ratio between the quantity actually produced in a certain

time and the standard quantity which ought to be produced in that time.

The standard time or standard quantity is considered to be 100 per

cent. efficiency, as we have seen.

If the standard time for a job be 12 hours, and the worker does it in

12 hours, his efficiency is 12/12 x 100 = 100 per cent. Suppose he

does the job in less than 12 hours, then it is quite clear that his

efficiency is more than 100 per cent. Say he does it in 10 hours; his

efficiency is (12 x 100)/10 = 120 per cent. If he takes longer than

standard time, his efficiency is less than 100 per cent. Say he does it

in 15 hours; his efficiency is (12 x 100)/15 = 80 per cent. Reward time

is 12 + 33-1/3 per cent. of 12 = 12 + 4 = 16 hours. Suppose the worker

takes the reward time of 16 hours to do the job; his efficiency is (12

x 100)/16 = 75 per cent. This efficiency is the ratio between reward

time and standard time, and that is why we say the efficiency point for

reward is 75 per cent.

RULE I.--In order to calculate efficiency on a time basis, the

standard time must be multiplied by 100 and the result divided by the

actual time.

In dealing with small parts, the basis is the standard _quantity_ per

hour--in other words, the quantity which ought to be produced in one

hour in order to reach 100 per cent. efficiency.

If the standard quantity per hour be 20, and the worker is on the job

8-1/2 hours, then the standard quantity for that time is 20 x 8-1/2 =

170. If the worker produces 170, his efficiency is (170 x 100)/170 =

100 per cent. Suppose he produces 200 in the time, then his efficiency

is more than 100 per cent., because he has produced more than the

standard quantity. His efficiency is (200 x 100)/170 = 117.5 per

cent. If, on the other hand, he produces less than 170, say 150, his

efficiency is (150 x 100)/170 = 88.25 per cent.

RULE II.--In calculating efficiency by this method, it is evident that

the quantity produced in a certain time must be multiplied by 100 and

divided by the standard quantity for that time.

If a definite number of articles are to be machined, the whole

quantity may be looked upon as a single job. For instance, suppose

there are 3,000 pieces to be produced, and standard quantity is 150 per

hour. Then the _standard time_ for the whole quantity is 3000/150 = 20

hours. _Reward time_ will be 20 + 33-1/3 per cent. of 20 = 20 + 6-2/3 =

26-2/3 hours. Efficiency may now be worked out by the first method.

Efficiencies are, of course, calculated on the _net time_--that is, on

the total time of the job after day time and other allowances have been

deducted.

PART III

EXPLANATION OF DIAGRAMS

SHOWING DIFFERENT METHODS

OF REWARD PAYMENT

CHAPTER V

REWARD AND EFFICIENCY

In order to illustrate the general principles of the Reward System, an

individual case was taken and one particular relation between reward

and standard times was selected--namely, 75 per cent.

The sewing on of buttons, the laying of bricks, ploughing,

shipbuilding, etc., would have served just as well, and the same

general results would have been obtained.

The relation between reward and standard times has given rise to

much discussion and experiment, and the relation selected in Part II.

is one that appeals most strongly to the worker as he gets paid for

all the time he saves. If reward begins earlier and the worker gets

a proportion of the time he saves instead of the whole, reward at

standard time should be just the same, or nearly so. It only means that

the worker has a better chance of getting a higher reward when he is

below the 100 per cent. line, and a smaller one when he is above it.

The following diagrams show the relation between reward and efficiency

according to the principal methods in use at the present time, some of

them being used in the same factory for different classes of work. A

complete diagram is illustrated on p. 88, but, for convenience, only a

portion of this is used in most of the other diagrams.

It must be noted that reward at standard time must be never less than

25 per cent. of the job rate, while 30 per cent. to 35 per cent. is

fairer.

In order to find the amount of reward at any efficiency, read off

the efficiency on the bottom line, run a pencil along the line

corresponding to this efficiency until it touches the graph, then run

the pencil along horizontally until it reaches the vertical scale. Read

off the percentage of reward on the vertical scale.

It will be seen at once that any efficiency below the reward point

means that no reward is earned, but that there is no reduction of day

wages. (The Taylor and Gantt methods are exceptions to this rule.)

The diagram on p. 88 is a descriptive one. The first column shows wages

plus reward on a wage basis of 8d. per hour.

The second column shows wages plus reward on a wage basis of 10d. per

hour.

The third column shows the proportion of the reward to the day wage for

any efficiency, the day wage being considered 100 per cent.

The efficiencies are shown along the bottom line, and the 100 per

cent. efficiency line is dotted.

[Illustration: DESCRIPTIVE DIAGRAM]

Two methods of wage payment are plotted on this diagram, the full line

being Reward System No. 1, and the dotted line the Taylor System.

For convenience the following diagrams are enlarged: Nos. 1, 2, 3, 4,

and the Emerson diagrams consist of the rectangle ABCD, and the Taylor

and Gantt diagrams consist of the rectangle EFGH. The Rowan diagram

is to the same scale as the Taylor and Gantt diagrams. The relation

between the vertical and horizontal scales has also been altered to

make the readings clearer.

(_a_) REWARD SYSTEM NO. 1.

In this method, reward begins at 62.5 per cent., and half the time

saved is paid for until standard time is reached. At that point and

above it two-thirds of the time saved is paid for.

Reward begins early, and increases definitely until standard time is

reached. Then there is a considerable jump, and after that the reward

goes on regularly at a higher rate than before.

This method is, in the opinion of the writer, the best of all reward

payments, and carries out the spirit of reward principles better than

any other.

The worker gets some reward, however little, and there is a direct

incentive to reach 100 per cent. efficiency owing to the rapid increase

of reward at that point. If he gets nothing, then he either feels

ashamed of his laziness, or, what is more likely, he inquires into the

reason why he has received no reward. This is just what the employer

wants, as it discovers inefficiencies in connection with machinery or

supplies or with other processes or routines.

At the same time, an inaccurate time study neither penalises the worker

too much on the one hand, nor causes excessive reward on the other.

Yet again, the worker always gets his day rate even though his

efficiency falls below the reward point.

It is eminently suitable for both employer and worker.

[Illustration: N^o. 1]

(_b_) REWARD SYSTEM NO. 2.

In this case the reward consists of payment for half the time saved,

and reaches 30 per cent. increase on the wage rate at 100 per cent.

efficiency.

It is suitable for many classes of work, and neither worker nor

employer suffer too much in the event of an inaccurate time study.

Reward begins early and is a direct incentive to efficiency, but there

is not the same urge towards the 100 per cent. line as in the case of

System No. 1. Usually there is an extra bonus given, say 5 per cent.,

to those reaching standard time, and this takes the form of a lump sum,

so that the angle of the line of increase is not interfered with.

[Illustration: N^o. 2]

(_c_) REWARD SYSTEM NO. 3.

Reward in this case begins at 80 per cent. efficiency and all the time

saved is paid for.

It is a method suitable for high-class workers and necessitates a very

accurate time study. It needs a decided effort to get reward, but once

reward begins it increases rapidly. An inaccurate time study means

either little or no reward if the inaccuracy results in increasing the

difficulty of the job; while if it makes the job easy, then excessive

rewards are earned.

There is usually an extra bonus of 10 per cent. when standard time is

reached.

The system is suitable for automatic work where there cannot be a great

variation in efficiency, and where the operations are to a large extent

taken out of the hands of the worker.

This method of payment is now adopted by Mr. Allingham after

conference with trade-union officials, as it gives the worker the whole

of the time saved.

[Illustration: N^o. 3]

(_d_) REWARD SYSTEM NO. 4.

This is a diagram illustrating the example given in the foregoing

description of the reward system.

Reward begins at 75 per cent. efficiency, and when standard efficiency

is reached the proportion of reward to job rate is 33-1/3 per cent.

At this point a bonus of 5 per cent. is given, and the line of reward

above this point is parallel to the line below it, but 5 per cent.

higher.

All the time saved is paid for, and from this point of view it is more

satisfactory to the worker.

Diagrams 1 to 4 are similar in principle to the Halsey bonus method,

the vital difference being that Halsey bases his standard time on the

average time taken under ordinary day or piece work conditions instead

of on a time study.

[Illustration: N^o. 4]

(_e_) THE TAYLOR SYSTEM.

This is the system advocated by Mr. Taylor, the originator of

scientific management, and hence of the Reward System.

A certain piece rate is paid until standard time is reached. At that

point there is a jump to another higher rate, say from 10d. to 14d.,

a jump of 40 per cent. The worker gets this increase for all the work

done, and the increased rate is paid on the rest of the work.

The worker makes strenuous efforts to reach 100 per cent. efficiency

because of the great increase, and also because he suffers directly

when he fails to obtain it.

The task set is so high that only highly skilled and rapid workers can

reach it, but the reward is also high. A good man can earn as much as

from 60 per cent. to 100 per cent. of his wages.

The system is one that weeds out the inefficient and the moderately

efficient. It is only satisfactory to highly skilled men, the elite of

the workers, and its use is therefore limited as most men will not work

under it. Its greatest fault is that it penalises the worker too much

for inefficiency. A man who regularly attains 90 per cent. efficiency

would be considered a fair worker in most shops, but under this system

he would not only receive no reward, but he would only receive 90 per

cent. of his day wages.

The rate must jump at least 40 per cent. at 100 per cent. efficiency,

otherwise the method is not so advantageous as some of the other

methods, while it is much more difficult to earn reward.

[Illustration: TAYLOR]

(_f_) The Gantt System.

This method is very similar to the Taylor System, except that the

worker is not penalised so much if he fails to reach standard time.

A large increase in the piece rate is given when 100 per cent.

efficiency is reached. For all time taken in excess of standard the

worker gets three-quarters of his wage rate instead of the whole of

it. As an example, suppose the standard time of a job be 10 hours and

the worker takes 12 hours. He is paid full-day rate on 10 hours, and

three-quarters the day rate on 2 hours. At 10d. per hour this amounts

to--

d.

10 hours at 10d. = 100

2 " " 7-1/2d. = 15

----

115

for 12 hours' pay, which is equal to 9-1/2d. per hour. The efficiency

is (10/12) x 100 = 83.3 per cent.

The sloping line below the day rate line shows the hourly rate at

various efficiencies.

After 100 per cent. efficiency is reached, the reward is just the same

as in the Taylor System.

The advantage of this system over the Taylor System is that the

loss for inefficiency is not heavy, yet it is enough to make the

worker endeavour to reach standard time. This, again, is a method only

suitable for highly skilled workers.

[Illustration: GANTT]

(_g_) THE EMERSON SYSTEM.

In order to arrive at a gradually increasing bonus line, Mr. Emerson

took a point on the wage line at 66.6 per cent. efficiency, and another

on the 100 per cent. efficiency line at 20 per cent. bonus. The bonuses

between these two efficiencies were then arranged so that for each

1 per cent. increase in efficiency the bonus increased in greater

proportion. The resulting diagram is a curve which is approximately a

parabola. Beyond 20 per cent. efficiency the worker gets paid for all

time saved.

By this method reward begins fairly early, so that all workers should

be able to get some reward. It progresses very slowly from 66.6 per

cent., and at 80 per cent. is about 3-1/4 per cent. of the wage rate.

Then it increases more quickly, and at 90 per cent. efficiency it is 10

per cent. of the wage rate, at 95 per cent. efficiency it is about 15

per cent., and at 100 per cent. efficiency it is 20 per cent.

One thing must be noticed: The reward above 100 per cent. efficiency

is based on standard time, and not on reward time. This means that the

worker gets a bonus of 20 per cent. on the time worked, and in addition

to that the full rate of wages for the time he saves above standard

time. As an example, take a job with a standard time of 20 hours:

[Illustration: EMERSON]

_Case I._

Suppose job done in 22 hours.

Efficiency 91 per cent.

Bonus (see diagram) 10 "

10 per cent. of 22 hours 2.2 hours.

Reward: 2.2 hours at 10d. 22 pence.

Wages: 22 hours at 10d. 220 "

Total payment for 22 hours 242 "

Hourly rate for job (wages + reward) 11 "

_Case II._

Suppose job done in 18 hours.

Efficiency 111 per cent.

20 per cent. on 18 hours 3.6 hours.

Time saved (20-18) 2.0 "

Reward: 5.6 hours at 10d. 56 pence.

Wages: 18 hours at 10d. 180 "

Total payment for 18 hours 236 "

Hourly rate for job (wages + reward) 13.1 "

This method enables the worker to get reward at a comparatively low

efficiency. The reward is not much to begin with, but it is enough to

induce the worker to try and get a higher efficiency. When standard

time is reached, the reward is not enough, but beyond that it increases

rapidly.

(_h_) THE ROWAN SYSTEM.

This method differs from all others in the variation of reward earned.

It is extremely simple in calculation, as the worker gets 10 per cent.

increase in wages for every 10 per cent. of time saved. He cannot save

more than, say, 99 per cent. of the time on the job, because when 100

per cent. is saved it means that the job is done in no time at all.

[Illustration: N^o. 1]

[Illustration: N^o. 2]

Suppose the time allowed is 10 hours. If it be done in 5 hours, 50 per

cent. of the time has been saved, and the worker gets 50 per cent.

increase of wages for the 5 hours he has worked. If the job be done in

over 10 hours, day wage, say 10d. per hour, is paid for all the time

taken. If done in 9 hours, 11d. per hour is paid; if in 8 hours, 1s.

per hour; if in 7 hours, 13d. per hour; and so on.

The efficiency is the standard time (time allowed) divided by the time

taken. If a line be plotted of efficiencies and rates-paid, the line

is not a straight one, as in other cases, but a curve as shown in the

diagram.

Reward rises rapidly at first, but it gets less and less as efficiency

increases, which is in direct opposition to reward principles.

The method has little to recommend it except the simplicity of

reckoning the reward payment.

It will be seen that the employer cannot possibly overpay the worker,

no matter what his efficiency.

No. 1 is the ordinary diagram, 100 per cent. efficiency being the point

where bonus begins. This point is based on an estimated time, not on a

time study.

No. 2 is a diagram drawn to compare the Rowan System with the Reward

System. Assuming that the worker under the Rowan System will usually

earn 20 per cent. in excess of his day wages, this has been used to

determine the 100 per cent. efficiency line, and the curve has been

drawn as before.

(_i_) DAY RATE.

The thick horizontal line marks the day rate of payment for work done.

It is the same at all efficiencies, and there is no inducement whatever

for a worker to increase his efficiency. Under such conditions the

average worker will only do enough work to enable him to keep his job,

and will resist all attempts to find out whether the work may be done

more efficiently.

(_j_) PIECE WORK.

The straight piece work system means that the worker gets so much

for each piece produced no matter how long it takes to produce it.

Therefore the faster the work is done the more money is earned.

Efficiency is based on the quantity a worker ought to do in order to

earn the standard rate of wages. Assuming he gets 10d. an hour, then

the payment for the work done ought to equal 10d. when working at

the normal rate--namely, 100 per cent. efficiency. If less than this

is earned, efficiency falls below 100 per cent.; if more is earned,

efficiency is over 100 per cent.

The sloping line shows the earnings per hour at different efficiencies.

There is no scientific basis on which to determine the proper time of

the job, and there is great inequality in the prices of different jobs,

some being easy, some very difficult. For the disadvantages of the

system, see p. 6.

[Illustration: DAY WORK. PIECE WORK. FORD SYSTEM.]

(_k_) THE FORD SYSTEM.

The Ford System is illustrated in the diagram on p. 108. The amount

received by the worker is the same no matter what his efficiency may

be, but wages are 50 per cent. higher than the standard day rate. For

this reason the firm adopting this system has a far greater choice

of workers than other firms, all the best labour gravitating to the

firm. The worker is, of course, expected to submit to the conditions

prevailing in the factory, and to do the work allotted to him in the

stated time and with the degree of accuracy stipulated. Needless to

say, the amount of work expected is far greater than under ordinary day

work conditions.

This system has two serious disadvantages, the first being that

it is of extremely limited application, and the second that it

necessitates an exceptionally high degree of organisation if it is to

be satisfactory.

With regard to the first point, the system depends entirely on paying

wages considerably higher than the average of the district or country

in which the factory is situated. This high wages inducement gives the

firm the pick of the workers and holds the men to their positions. It

is obvious that only one or two firms in each trade can do this. If

the system became general, it would mean that wages would be increased

all round and that men need no longer be afraid of being discharged.

They could leave and get equally high wages elsewhere. Under such

circumstances all the advantages of the system would disappear, and

wages would be reduced all round until some firm began again.

Dealing with the second point, production will not be increased, or

will be increased very little, if the men are left to themselves, and

therefore a high degree of organisation is necessary. It means time

study, planning, constant improvement in methods and machines, and

all those incidentals described herein under Reward System, but with

an overhanging threat of dismissal that is absent from the Reward

System. The firm must have a standard product if the system is to be

economically successful, and each man must do one job only and do it

in the manner indicated. Team work is the essence of the system. It

is quite impossible to obtain any beneficial result from the Ford

System if applied to an average factory. Men cannot produce anything

approaching their maximum capacity unless the work is thoroughly well

organised, and waste of time, labour, and material, eliminated. And no

matter how much the men desire to be worthy of the increased wages,

they cannot be blamed if the organisation fails. The only incentive to

high production is, of course, the threat of dismissal.

If the Ford System is to be successful, therefore--

1. The organisation must be as keen as, or even keener than, that of

the Reward System.

2. The firm must have a highly specialised business.

3. Efficiency must be maintained under threat of dismissal.

4. The system must be adopted by only one or two firms in each trade.

Where these conditions prevail the system should be highly successful.

APPENDIX

A FLOATING WAGE RATE

The following suggestion for a floating wage rate would prove a

perpetual automatic incentive to continuously high efficiency.

It consists of a variation of, say, 6s. per week in the wage rate

of every class of worker, the lowest wages in the class being the

trade-union rate, and the highest wages being 6s. above the trade-union

rate.

Every quarter-day each worker who reaches an average efficiency

of, say, 95 per cent. or over during the previous three months for

a minimum number of reward hours worked, say 500, will receive

automatically an increase of 1s. per week in his wages for the next

three months. If he keeps up this efficiency for eighteen months he

will reach the highest wage rate.

The wages of every worker who fails to reach an average efficiency of,

say, 85 per cent. during the previous three months will automatically

drop 1s. per week until he is on the lowest rate.

Under these conditions a worker on the lowest rate will try to reach

a higher one, and if he is on a higher rate he will always try to

maintain his efficiency. A drop in efficiency means a direct loss to

the worker, and the worker would probably complain of the conditions

of his work. If other workers can keep up their efficiencies on the

same jobs, the complaint is groundless; while if other workers cannot

keep their efficiencies, it is obvious that something is wrong, and the

conditions will be investigated.

The variation of the wages being automatic, no one can complain of

unfairness.

The advantage of making the change every three months instead of a

longer period would mean that every worker would take a live interest

in his continuous efficiency, and would not be content with a good week

one week and a medium week the next. And, again, a good man who dropped

down owing to unforeseen circumstances would only be down for three

months, while a medium worker would always respond to the incentive,

and when he reached another step up he would make great efforts not to

go down again.

There would be an automatic selection of the best men, and favouritism

would be reduced to almost nothing. A foreman could not prevent a man

getting the increase when his efficiency proved that he had earned it,

and he could not push on an inferior man because of personal friendship.

Should a high wage man leave, then he would have to come back on the

lowest wage rate if he wanted to come back. This would induce men to

keep their situations. Should a man be discharged, the same thing would

happen. But a high wage man is of far more value to a firm than a low

wage man, and he would not be discharged unless discharged permanently

for some fault.

If a firm thought to lower wages by discharging all the high efficiency

men, and then take them on again at a lower wage, that firm would

immediately lose caste, and no high efficiency man would work there. A

high efficiency man can get a job anywhere.

This floating wage rate would be quite apart from the question of

reward, and the job rates for reward work would be the same for all

workers no matter what their wage rate was.

BILLING AND SONS, LTD., PRINTERS, GUILDFORD, ENGLAND

* * * * * *

Transcriber's note:

Obvious errors were corrected.

Page 46: accordng changed to according

Page 55: unbiassed changed to unbiased

Page 59: introdution changed to introduction

Page 111: efficiences changed to efficiencies

A rational wages system · 第 3 / 3 章