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Piece Rates
Production methods or labor conditions are often such that piecework is impossible.
There are many functions and processes which thus far have not been satisfactorily
adjusted to task systems; there are others (the inspection service in a factory,
for instance) where a premium on increased output would defeat the first purpose
of the service. Where results can be accurately measured, however, and the
quality of the service can be automatically secured or is not sacrificed by
concentration upon quantity, the task system--whether it take the form of
piece rates, premiums, or bonus--has such superior psychological advantages
that it will probably come more and more into use.
Under the general heading quoted above--
``How do you make the most of the wages paid your
employees?''--the following question was asked: ``What special method do you
employ to make men satisfied or pleased with their wages?'' The answers were
most interesting and instructive. One manager having many thousand men in
his organization narrated various methods by which he kept in personal touch
with his men, and turned this personal relationship to the advantage of the
house.
One illustration will make clear the line he pursued. In the card catalogue
of the employees, the birthday of each is noted, the executive recognizing
that for the average man this is an anniversary even more important than New
Year's.
If for any reason a member of the organization deserves or requires the
executive's personal attention, his birthday may be chosen as the date of
the interview. Then whether the man merits an advance for extra good work
or needs help to correct a temporary slump in efficiency, the reward or the
appeal takes on added meaning because it coincides with a turning point
in his life.
To facilitate the plan, the manager's file of employment cards is arranged,
not by initials or departments, but by birthdays. Each workman's name falls
under his eye a few days in advance, long enough to secure a report from his
foreman, if knowledge is lacking of his progress.
As I entered this manager's office, I met a young man coming out. He had been
in the company's employ only a few months and his relations with the organization
had not yet been established. Asked for a report, his foreman gave him a good
record and recommended a small advance. Imagine the surprise, the instant
access of pride and loyalty, the impulse towards greater effort and efficiency,
when the young man was called into the manager's office on his birthday, congratulated
on his record, and informed that he would start his new year with an advance
in wages. Double the advance, if allowed in the usual way, would not have
so impressed and satisfied him. The increased wage made its appeal direct
to the instinct for social recognition, and hence was very effective.
Such a method does not admit of general application. Practiced in cold blood,
it might even be harmful. But in this case, it struck me not as an act of
selfish cleverness, but as the expression of a real sympathy and interest
which the manager felt for his men. The cleverness lay in the recognition
that no man is ever so susceptible to counsel, to appreciation, or to rebuke
as on his birthday, when the social self is especially alert.
In other organizations, the effort to extend this factor of human sympathy
to each worker and to see that full justice is rendered to him takes the form
of a department of promotion and discharge. The head is the direct representative
of the ``front office'' and is independent of superintendents and foremen.
No man can be ``paid off'' until the facts have been submitted to the consideration
of this department. Here also the man may present his case to an unprejudiced
and sympathetic arbiter.
In actual practice the man ``paid off'' is
sometimes retained and the foreman, on the evidence of prejudice, bad temper,
or other incompetency, is discharged. In consequence every workman knows that
his place does not depend upon the whim of his immediate superior, but that
faithful service will certainly be recognized.
Furthermore, this department assumes the task of shifting men from one department
to another and thus minimizing the misfits which lower the efficiency of the
whole organization. Records of each man's performance are kept, and promotions
and discharge are more nearly in accord with facts than would be possible
in a large house without some such agency. In too many big establishments
the individual feels that he does not count in the crowd and that he is helpless
to do anything to advance himself or to protect himself against an antagonistic
foreman. In large measure, such a department reduces this feeling and bridges
the chasm between the men and the firm.
In its effect on the attitude and efficiency of employees, the method of fixing
and adjusting wages is no less important than the wages themselves. The steady
trend of the labor market has been upward and always upward; it is one of
the notable achievements of trade and industry that this constant appreciation
in the price of man power has been neutralized by increase in the efficiency
of its application. This increase in earning capacity has been secured not
alone by the development of automatic machinery, but by the division of labor,
the subdivision of processes, and the education of workers to accept the new
methods, and acquire expert skill in some specialty.
Hardly a generation has passed since one man, or perhaps two working together,
built farm wagons, steam engines, and a thousand other articles entire. Now
a hundred mechanics or machine tenders may have contributed to either wagon
or engine before it reaches the shipping department. Three fourths of these
workers are paid piece rates. The substitution of these piece rates for day
wages, the striking of a satisfactory balance between production and compensation,
and the endless changes in the scale as new parts or faster or simpler processes
are invented-- have all been operations in which the tact and man-handling
skill of executives have played a significant part.
In the larger organization this knowledge or skill is often supplied by a
manager who has ``come up through the ranks'' and has not forgotten his journeyman's
dexterity on the way or neglected to keep in touch with improved methods.
Frequently the advantage of a small industry or trading venture over its
larger rivals depends on the owner's mastery of all the processes or conditions
involved and his ability to deal with his employees on a personal plane in
fixing wages or in establishing the standard day's work.
In a stove factory where four fifths of the processes are paid by piece rates,
it was necessary, not long ago, to fix the remuneration for the assembling
of a new type of range. Most of the operations were standard; the workmen
and the management differed, however, on what should be paid for the setting
and fastening of a back piece with seventeen bolts. The men asked fifteen
cents a range. When refused, they named twelve cents as an ultimatum. The
company was willing neither to pay such a price nor to antagonize the workmen.
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