INDUSTRIAL MANAGEMENT LIBRARY WORK, WAGES, AND PROFITS SECOND EDITION REVISED AND ENLARGED BY H. L. GANTT NEW YORK THE ENGINEERING MAGAZINE CO. 1919 Copyright, 1913, By THE EXGIXEEEING MAGAZINE CO. INTEODUCTION TO SECOND EDITION The first edition of Mr. Gantt's book appeared in 1910 as a volume of 194 pages, with seven charts, the graphic illustrations and most of the specific examples being drawn from results secured in the textile industries. Since that date a rapid rise has taken place in public attention to the methods used and the results secured, and in the active effort (evi- denced by inquiry and undertaking) to obtain ad- vantages corresponding to those so substantially realized in the cases cited. This interest and inquiry have been the principal influence inspiring the enlargement of this book, not only by inclusion of additional instances, but by more detailed development of some features of the work, and the summation of the argument into a comprehensive and entire (even if broadly sketched) outline of a plan of systematic management, based on the policies and methods defined by Mr. Gantt. His experience in the field of labor management covers a quarter-century of close practical applica- tion. His special methods, which even yet are but partially and imperfectly understood by many, have been identified with his name for at least half this period. These methods are sometimes incorrectly supposed to be summed up in the bonus system of wage payment; but the inducement of increased earnings is only one factor, and almost the last fac- tor, in the complete statement of Mr. Gantt's meth- 3 4 INTRODUCTION TO SECOND EDITION ods. His whole concept of scientific investigation, careful standardization, individual instruction, and interconnected reward to both instructor or super- visor and workman, must be clearly grasped before any adequate idea of task work with bonus can be obtained. This full concept is set forth in the present vol- ume, multiplied by ample exhibition of practical re- sults. The added material is drawn from the me- chanical industries, from machine-shop, metal-work- ing and locomotive-building plants. The colored charts, which have been received with so much in- terest, are increased in number from six to twelve, the whole number of illustrations being brought up to twenty-seven, and the original nine chapters being enlarged by expansion and supplement to twelve. The larger portion of the first edition was gath- ered by compilation of a series of articles published in The Engineering Magazine from February to June, 1910, with incorporation of three of Mr. Gantt's important earlier contributions on the same subject. To this are now added a new chapter on "The Task Idea," adapted from Mr. Gantt's paper before the Tuck School Conference; an enlargement of the discussion on "Fixing Habits of Industry,'' based upon results observed since the former volume was issued; a new chapter on "Eesults," inspired by comment and inquiry addressed to the author dur- ing the last three years; and a concluding chapter, condensed from an article on "A Practical Example of Scientific Management," published in The Engi- neering Magazine for April, 1911. It is natural, and indeed inevitable, in the present active development of the philosophy of efficiency and the practice of scientific management, that such revisions should be made. The underlying ideas are INTRODUCTION TO SECOND EDITION 5 vital; and, like all live things, they are still grow- ing, and will continue to grow. Growth means ex- pansion, if not change of form, and this makes final definition impossible, because definition means limi- tation. In the following pages, however, Mr. Gantt gives the fullest exposition ever put forth of his ma- ture thought and work. He gives to the world here the latest word (though happily far from the last word) on his principles and practice. His grasp of fundamentals is scientific. His association of ef- fects with their causes is philosophic. In its entirety the work offers an interpretation of industrial con- ditions and a promise for betterment that make it a classic — a classic of optimism — in the literature of industry. Charles Buxton Going. PEEFACE TO SECOND EDITION The law of development is evolution. Revolution is justified only when evolution is impossible. If the most complete system of scientific manage- ment which has ever been devised could be installed in a manufacturing plant over night, it would prob- ably be impossible to operate that plant at all the next day, and for weeks, perhaps months, it would be operated in such an inefficient manner as un- doubtedly to cause very serious losses. A system of management especially designed for economical production is a mechanism which is suc- cessful only when all parts work in harmony. The men who form a part of this mechanism must be trained individually and collectively. At the battle of Santiago, individually capable men, serving good guns, under high-class officers, made an average of three per cent in their hits, at an average distance of not over two miles. These same men, under the same officers, properly trained to use the best scientific knowledge and methods of today, would easily score in hits eighty per cent of the shots at the same range, at the same time firing five times as rapidly. To attempt to operate a new system of gun-fire control from rules and instructions, without train- ing the men, would result in the loss of even the three per cent efficiency which existed before the introduction of the new system. 7 8 PREFACE TO SECOND EDITION While I do not believe that, in an ordinary manu- facturing establishment, a sudden change of manage- ment would be quite as disastrous as such a change would have been in the navy, yet it would unques- tionably be very detrimental to the business, per- haps for a long time. The principles of modern industrial organization, popularly known as "Scientific Management," are getting to be pretty well understood by those who have studied the subject thoroughly. Even the meth- ods of operating the various mechanisms used for this purpose are becoming more clear to people who are in the habit of investigating new methods and ideas. These methods, however, can never be util- ized properly until the rank and file have been trained to operate under them. This training necessarily takes time; but, if it is properly done, I have yet to find anybody more enthusiastic than the workmen themselves operating under it. They have the same kind of enthusiasm that the gunner in the navy has acquired since he learned that shooting is no longer guess-work. The man who undertakes to introduce scientific management and pins his faith to rules, and the use of forms and blanks, without thoroughly compre- hending the principles upon which it is based, will fail. Forms and blanks are simply the means to an end. If the end is not kept clearly in mind, the use of these forms and blanks is apt to be detrimental rather than beneficial. This book is an effort to explain the principles of "Modern Industrial Organization," and to give some idea of how to utilize the methods of evolution in the introduction of a system of management based on these principles. PREFACE TO SECOND EDITION V A system of management is an asset, and a good system is a valuable asset. The cost of acquiring such an asset cannot be legitimately charged to operating expenses. H. L. Gantt. April, 1913. CONTENTS "Chapter I. The Application of the Scientific Method to the Labor Problem Economical Utilization of Labor the Great Modern Problem for Engineers and Managers — Limitation of Output by Workers — Limitation of Workmen's Allowable Earnings by Employ- ers—How These Tendencies Militate against the Common Good — Permanently Successful Man- agement Must Be Beneficial to both Employer and Employee — The Inefficiency of Ordinary Management Systems — ^The Ineflficiency of Ordi- nary Labor — The Possible Betterment Obtaina- ble through Scientific Study — The Attainable Output Generally Three Times the Present Average — Realization of This Large Possible Productivity Depends on the Manager — His Guide Is Scientific Investigation— The Three Parts of the Problem Defined — The Benefits Secured. 19 Chapter II. The Utilization of Labor The Commercial Axiom that Good Bargains Benefit both Parties — The Same Principle now Realized in Industrial Relations — Eflicient Work Goes with High Wages — Inefficient Plant Design or Equipment Makes Efficient Labor Impossible — Common-Sense Methods in Improv- ing Plant Efficiency — Scientific Study Necessary to Determine the Efficiency of Operations — In- stances of Uneconomical Methods — The Ele- ments of Operation Study — How Operation Times are Standardized — How the Workman Is Induced to Reach Standard Times — The Four 11 12 CONTENTS Conditions Necessary to Secure Best Results — Exact Knowledge of the Best Way of Doing the Worlv — Instructing the Worlcnien how to Do It — Wages as an Inducement — Loss of Bonus as a Preventive of Failure — Manage- ment and Wages. 33 Chapter III. The Compensation of Workmen The Passing of the Age of Force — The Con- flict between Employer and Employee — ^Trade Unions ; Why They Exist — Collective Bargain- ing the Inevitable Accompaniment of a Class Wage Rate — Its Disadvantage to the Employer — Its Disadvantage to the Progressive Work- man — Possibility of Offering the Individual Worker Something Better than the Union — Ordinary Methods of Wage Payment and Their Tendencies. 51 Chapter IV. Day Work Day Work Defined — What Regulates Day Wages — The Class Wage Rate Destructive to the Efficiency of Labor — Keeping Individ!ual Efficiency Records — The Difficulties and the Pos- sibilities — Practical Methods Outlined — The Re- sults Secured in Practice — The Suggestion of a System that can Supplant the Union 65 Chapter V. Piece Work How It Differs from Day Work — How Ordi- nary Piece Work Involves the Same Evils as the Day Wage — Why Ordinary Piece Work Pro- duces Labor Troubles — Unreliability of Ordi- nary Time Records and Foremen's Estimates — How the Efficient Worker under the Ordinary Piece-Rate System Is Penalized — A New and Better System Proposed — Its Essentials — Ex- pert Investigation, Standard Methods, Capable Workers, Proper Instruction, Sufficient Com- pensation — Why the Ordinary Foreman can not Do the Work of the Expert — Ordinary Shop Difficulties in Introducing the System — How They may Be Overcome — Training of Work- men — Compensation of Workmen and of Train- CONTENTS 13 ers — Keeping Good Faith with the Men — The Value of the Efficient Man to His Employer — A Modern Counterpart of the Apprentice Sys- tem 77 Chapter VI. Task Work with a Bonus A Review of the Wage Conditions That Lead to Labor Unions and Labor Conflicts — A Survey of What Has Been Accomplished in Reward- ing Efficiency and Promoting Labor Peace — The History of the Bonus System — Its Early Results — How It Succeeded at the Bethlehem Steel Works — How Its Abandonment There Brought Back Labor Troubles — A Recapitula- tion of the Elements of the Successful System. 103 Chapter VII. The Task Idea Fundamental Principle Underlying Task Work with a Bonus — Its Essential Difference from the "Drive" Method — The Task Idea Sug- gested by Proved Experience in Training Chil- dren — The Inspiration of Working for an Ob- ject — Task and Bonus in Accord with Human Nature — Task and Bonus Therefore a Proper Foundation for Successful Management — The Problem Is to Set the Proper Task — Obstacles Discovered in Practical Experience — Schedules as Tasks — Scheduling Miscellaneous Work — In- dividual Efficiency Rapidly Raised by Simple Schedules — Practical Introduction of the Sched- uling System — Preparation for Task Setting — What Steps It Is Necessary to Take — How Hard the Task Should Be — Performing the Tasks — Obligations of the Management — Task Work in a Machine Shop — Actual Experience in a Bleach- ery — Planning and Task Setting Often Increase Output Threefold — Maintaining Proper Condi- tions 121 Chapter VIII. Training Workmen in Habits of Industry and Co-operation Habits of Industry More Valuable than Knowl- edge or Skill — How These Habits Are Culti- vated by the Bonus System — Its Practical Ap- plications Explained in Detail — How Habits of Work Are Practically Cultivated — How Quality 14 CONTENTS as Well as Quantity of Output Improves — The Setting of Tasks — The Standardization of Work — Obstacles to the Introduction of the System — Helps to Its Stability after It Has Been Intro- duced — The Co-operation of the Men Secured — The Reasons Why Work Is Better as Well as Larger — Method of Introducing the System into a New Plant ^ 147 Chapter IX. Fixing Habits of Industry Records of Specific Cases Since 1905 — The Task and Bonus System in a Cotton Mill — Indi- vidual Records of the Weavers Exhibited on a Colored Chart — The Chart Explained and Dis- cussed — Experience in a Weave Shed Exhibiting Great Success — Colored Chart Showing the Bonus System Applied to Winding Bobbins — Discussion — Colored Chart Showing Conditions in the Same Department Three Years Later — Colored Chart Showing Task and Bonus System Applied to Spoolers — Progress of Efficiency Pointed Out — Chart Showing Task and Bonus System with Inspectors — Chart Showing Actual Results on Wages, Output, and Unit Costs in Folding-Room — How the Results Were Main- tained for Three Years Continuously — Colored Chart Showing Results in a Worsted Mill — Col- ored Chart Showing Increase in Efficiency of Weavers — Colored Chart Showing Maintenance of Result for Several Years — How the Spirit of Co-operation Is Established 175 Chapter X. Results Diagram Showing Comparison Between Old Conditions and New — Improvement in Ratios of Output, Wage Costs, and Wage Rate — Better- ment of Quality as Well as Quantity of Output — Reorganization Effected in a Packing-Box Fac- tory — Chart Showing Results Secured with Automatic Screw Machines — Chart Showing Betterment in Miscellaneous Machine Work — Similarity of Effects in All Cases — Effect on Reduction of Overhead Expense — Treatment of Mistakes in Task Setting — Universality of the Principles Proved by Charts — The Essentials of the Methods Employed — Favorable Physical and Mental Effects Observed Among Bonus Workers 207 CONTENTS 15 Chaptee XI. Prices and Peofits The Trust Movement of 1890 — Effects of Con- solidation on Economy of Operation — Effects of Union Labor on Increase of Production Cost — Two Ways of Increasing Profits: Increasing Selling Price or Decreasing Production Cost — The Vicious Cycle of Increased Prices — Horizon- tal Rise of Wages Not a Cure but a Transient Expedient — Necessity of Adjusting Prices to Value — The Economic Law That Permanent Large Profits Can Be Secured Only by Efficient Operation — American Reliance on Huge Na- tional Resources Most Unsafe — Increased Ef- ficiency a Question of National Importance — Scientific Methods Must Be Applied to Manufac- turing Problems — Difficulties Inherent in the Factory System — How Task and Bonus Restores the Advantages of the Older Order — The Ele- ments of Manufacturing Cost — Profits Can Be Greatly Enlarged Only by Increasing Efficiency of Operation — The System of Management Ad- vocated Insures Efficient Control — The Cost Is Small 227 ''Chapter XII. A Practical Example Origin of the Task and Bonus System — Ele- ments of the System — The Limitation of Bonus — Making Out Instruction Cards — How Task Times and Work Methods Are Determined — Ad- vantages of Bonus over Piece Rates — Application of Instruction Cards to a Machine Shop — Illus- trations of Typical Cards — The Man Record — Daily Balance of Work — A Foundry Schedule and Balance — Illustration of Balance Sheet — The Daily Balance as a Permanent Record — A Machine-Shop Balance and Schedule — Illustra- tion — Value of Balance Not Dependent upon Method of Compensation — Cost of Keeping Bal- ances — Illustrations of Time Cards — Time Rec- ords — Cost Determinations — Cost of Time-Keep- ing System — Determining Progress of Produc- tion — Difficulties of Getting a Daily Balance — Values of the Balance when Obtained — The Schedule System — Routine and Expert Work — General Principles and Details 253 TABLE OF ILLUSTRATIONS Man Record Sheet 68 Weavers' Achievement of Task 182 Fixation of Habits of Industry 182 Disappearance of the Slack Monday Habit 186 Maintenance of Conditions for Three Years 189 Disappearance of Slack Saturday Habit 190 Betterment of Output by Bonus to Foremen 190 Twelve Months' Improvement under Task and Bonus System, Girls Working in a Folding Room 192 Bonus Record of Girls in a Worsted Mill 194 Same Room Later, Showing Progress of Betterment 194 Results of Too Great Haste in Putting Workers on Bonus 196 Errors of Hasty Start Corrected by Perseverance 200 Very Recent Record Showing Success of Task and Bonus in Spite of Hostility of Workers 204 Improvement of Ratios of Production, Wage-Cost, and Earnings by Task and Bonus Methods in Pillow-Case Factory 208 Improvement of Output, Wage Earnings, and Pro- duction Cost of Small Automatic Machines 213 Improvement of Output, Wage Earnings, and Pro- duction Cost of Large Automatic Machines 214 Improvement of Output, Wage Earnings, and Pro- duction Cost in Miscellaneous Machine Work 217 Instruction Card for Turning a Crank Shaft 264 Instruction Card, Planing Locomotive Frames 265 Instruction Card, Drilling Cylinder Cover, (Front)- 267 Instruction Card, Drilling Cylinder Cover, (Back)., 267 Graphical Balance for Foundry Records 273 Graphical Record, Building 15 Locomotives 276 Graphical Record, Showing Effect of Deficient Frame-Drilling Capacity 277 Time Card for a Machine Shop 282 Time Card Used in a Bleachery 283 Rack for Time Cards 284 16 THE APPLICATION OF SCIENTIFIC METHODS TO THE LABOR PROBLEM WORK, WAGES, AND PROFITS Chapter I THE APPLICATION OF SCIENTIFIC METH- ODS TO THE LABOR PROBLEM ' I ''HE greatest i3roblem before engineers ''- and managers today is the economical utilization of labor. The limiting of output by the workman, and the limiting by the em- ployer of the amount a workman is allowed to earn, are both factors which militate against that harmonious co-operation of em- ployer and employee which is essential to their highest common good. Scientific investigation is rapidly putting at our disposal vast amounts of knowledge concerning materials and forces, which it is the business of the engineer to utilize for the benefit of the community. Well-designed plants and efficient labor-saving devices, to be seen on every hand, bear testimony that 19 20 WORK, "WAGES, AXD PROFITS lie is doing at least a portion of his work well. When, however, it comes to the opera- tion of these i^lants and the utilization of these labor-saving devices, the lack of co- operation between employer and employee, and the inefficient utilization of labor, very much impair their efficiency. The increase of this efficiency is essen- tially the problem of the manager, and the amount to which it can be increased by proper study is, in most cases, so great as to be almost incredible. In considering the subject of management we must recognize the fact that in this coun- try, so long as a man conforms to the laws of the State, he has a right to govern his own conduct, and to act in such a manner as his interests seem to dictate. Granting this, it follows that any scheme of management to be permanently successful must be beneficial alike to employer and employee, and neithel^ labor unions that regard their interests as essentially antagonistic to that of employers, nor employers' associations whose only ef- fort is to oppose force with force, can ever effect a permanent solution of the problem of the proper relations between employers and employees. SCIENTIFIC METHODS FOR THE LABOR PROBLEM 21 Boards of arbitration are temporary ex- pedients, and the results of tlieir work are seldom better than a sort of Missouri com- promise, to be fought out later ; for although they be composed of men of the highest in- telligence, and of the greatest integrity, the conditions under which they are organized and the means at their disposal never enable them to get more than a superficial knowl- edge of the subject. The information such a board gets is all in the form of testimony, which, although it may be honestly given, can never produce a complete understanding of the subject; for, as a rule, neither employer nor employee knows exactly in detail the best way of doing a piece of work, and, as far as my own experience goes, they never know ex- actly Jiotv long it should take a good man fitted for the work, and provided ivith proper implements. Before intelligent action can be taken in any case these facts must be known. In order to get a general idea of the con- ditions that exist in the mass of our manu- facturing industries it is necessary to review briefly the manner of their development. The expert mechanic, who, with a business growing to larger projiortions than he could take care of, hired a few men to help him, 23 -WORK, WAGES, AND PROFITS and directed them all by his personal ex- ample and skill, first gave place to the small factory, which he could run on the same lines. Today, however, even the smaller fac- tories have grown beyond the point where they can be directed or controlled by one man, and methods which were successful on the smaller scale fail now to apply on the larger. The factory is divided into depart- ments, each directed by a foreman, who, in many cases, has had no training in manage- ment, and often has no capacity for it. He is invariably overworked if he attempts to do his duty, and the manager seldom has time to inquire into his troubles, but fre- quently tries to remedy matters by appoint- ing another foreman, often making matters worse. Again, if expenses are too great, and it seems impossible to meet competition, there is seldom any serious effort made to find out why expenses are too high, but it is assumed that the way out of the difficulty is to reduce wages. It never appears to occur to a man- ager that perhaps the cause of the excessive expense may not lie with the workman, but with the management. Managers rarely seem to suspect that, if the workmen were more SCIENTIFIC METHODS FOR THE LABOR PROBLEM 23 intelligently directed, the output per man might be largely increased without a corre- sponding increase in expense. Those who have given even superficial study to the subject are beginning to realize the enormous gain that can be made in the efficiency of workmen, if they are properly directed and provided with proper appli- ances. Few, however, have realized another fact of equal importance, namely, that to maintain permanently this increase of effi- ciency, the workman must be allowed a por- tion of the benefit derived from it. To obtain this high degree of efficiency successfully, however, the same careful scien- tific analysis and investigation must be ap- plied to every labor detail as the chemist or biologist applies to his work. Wherever this has been done, it has been found possible to reduce expenses, and, at the same time, to increase wages, producing a condition satis- factory to both employer and employee. The great difficulty in instituting this method of dealing with labor questions is that usually neither employer nor employee has sufficient knowledge of the scientific method to realize either the amount of detail work necessary, or the extent of the benefits 24 AVORK, WAGES, AMD PROFITS to bo derived from it. In general, tlieir in- clination is to adhere to the methods with which they are familiar, and to distrust all others, even though their methods have failed to bring them appreciably nearer the solu- tion of their problems, and the newer methods have produced results far more sat- isfactory than they even hoped for. A scien- tific investigation into the details of a condi- tion that has grown up unassisted by science has never yet failed to show that economies and improvements are feasible that benefit both parties to an extent unsuspected by either. The scientific laboratory for the study of materials and forces, originally considered as belonging only to educational institutions, has recently become a recognized necessity in all our large industries, and to it princi- pally the great advance of recent years has been due. As yet, however, in but few cases has any definite attempt been made to study in a scientific manner the most efficient way of utilizing the human labor. Of how much work of various kinds the ordinary man has done, we have many records ; but of how much a man specially suited to any class of work can do, we have almost no knowledge. SCIENTIFIC METHODS FOR THE LABOR PROBLEM 25 Enough study has been spent on the subject, however, to determine that men specially suited to any particular kind of labor, if sup- plied with proper implements and intelli- gently directed, can do on the average at least three times as much as the average workman does, if the limiting factor is physi- cal exertion; and, if assured sufficient com- pensation, the average workman will do this increased task, day after day. The ratio of what can be done to what is done is even greater than three to one in work requiring skill and planning. Well thought out plans alone, if accompanied by complete instructions for doing work, often produce an increase of more than 100 per cent, over what is usually done. This is par- ticularly true in complicated work, which should be planned most carefully, but which is often not planned at all. It is usually left to the judgment of a busy foreman, whose first knowledge of what is to be done reaches him with the order to do it. In such a case, it is the exception when the work does not cost in wages several times what it should, and this with no fault of the foreman or workman. These facts have been established in num- 26 WORK, WAGES, AND PROFITS erous cases of ordinary labor, in doing ma- chine-shop work, in building engines, and in the erection of structures of various kinds. Similar possibilities have been indicated wherever the slightest effort has been made to study or to plan, showing that in many in- stances a condition of affairs exists which is not only wasteful to the owners, but discour- aging and unjust to the workmen, most of whom would be willing to do more work to earn increased pay if only the opportunity to do so were offered, and they were guaran- teed that they would not ultimately lose by doing so. Mr. E. F. Du Brul, formerly the Commis- sioner of the National Metal Trades Asso- ciation, an organization of employers formed to protect themselves from the unjust de- mands of the labor unions, stated some time ago that a large majority of strikes were produced by mismanagement. Mr. Du Brul has perhaps had more general experience with striking employees than any other man in this country, and his conclusion is that the best insurance against strikes is good man- agement. He, therefore, strongly advises managers to study the subject. The neces- sity for this advice will become evident when SCIENTIFIC METHODS FOK THE LABOR PROBLEM 27 we realize that hardly any two managers, un- less they have been trained under the same influence, agree as to the proper way of deal- ing with any of the intricate questions that are constantly arising between employer and employee; much less will they agree on any general principles of management. There have been in the past and are today great managers. Are there not some general principles by which they either consciously or unconsciously are governed? In other words, are there not some general principles, applicable, at least to a large number of cases, according to which substantial equity can be insured between employer and em- ployee, and a higher degree of efficiency re- alized from their harmonious co-operation? The only successful method of determin- ing general laws has been that of scientific investigation, and, in the study of questions involving human labor, enough has been done to show that the same method is applicable to at least a large number of individual cases, and there is good reason to believe that it is universally applicable. Labor unions demanding all they can get, and employers' associations organized sim- ply to oppose the demands of the unions, can 28 WORK, WAGES, AKD PROFITS never evolve a satisfactory system of manage- ment ; for, although each, in its way, may be (and undoubtedly is) often beneficial to its members, both are formed with the idea of using force only, which can never be a substi- tute for knowledge. Although a board of arbitration may be useful in averting a crisis, the decision of such a board founded on such facts as are available should be professedly only tempo- rary in character, to be revised later accord- ing to the results of a scientific investigation of the matter in dispute, to be undertaken at the earliest possible date. This problem consists of three parts : First. — To find out the proper day's task for a man suited to the w^ork. Second. — To find out the compensation needed to induce such men to do a full day's work. Third. — To plan so that the workman may work continuously and efficiently. The problem is difficult, for a man suited to the work must be found and induced to work at his full capacity. The details of the work must be arranged so that he can work most efficiently, and the time to do each de- tail must be carefully studied with a stop SCIENTIFIC METHODS FOR THE LABOR PROBLEM 29 watch. From such detail observations it is possible to determine what a good man can do, day after day, and there is but little diffi- culty in finding out what men have to be paid to make them do all they can; for, although men prefer, as a rule, to sell their time, and themselves determine the amount of work they will do in that time, a large proportion of them are willing to do any reasonable amount of work the employer may specify in that time, provided only they are shown how it can be done, trained to do it, and guaran- teed substantial additional amounts of money for doing it. The additional amount needed to make men do as much as they can depends upon how hard or disagreeable the work is, and varies from 20 to 100 per cent, of what they can earn when working by the day, ac- cording to their own methods and at their preferred speed. The cost of these initial investigations is necessarily large, for they can be made only by capable men who have had the special training necessary, and hence the expense must be borne by the employer; but the re- turns, when the results of these investiga- tions begin to be applied, are so great as to pay in a short time for the investigations, to 30 WORK, WAGES, AXD PROFITS allow a substantial increase of wages to the employee, and to leave a good margin of profit to the employer. The benefits which have been derived from such investigations are : An increase of output. A decrease in cost of product. Better workmen attracted by higher wages. Improvement of quality of product due to better workmen and more careful super- vision. These results are well worth striving for, and the fact that they have been obtained by the application of the scientific method to the ordinary problems indicates strongly that progress is to be made in such matters by the scientific method, which has been re- sponsible for other kinds of progress in the past. EFFICIENT UTILIZATION OF LABOR Chapter II EFFICIENT UTILIZATION OF LABOR T T has become an axiom in the commercial -*" world that in the long run those transac- tions most promote prosperity which are ad- vantageous alike to buyer and seller. It is coming to be realized in the industrial world that the same thing is true regarding the ar- rangements between employers and em- ployees, and that no arrangement is perma- nent that is not regarded by both as being beneficial. In other words, the only healthy industrial condition is that in which the em- ployer has the best men obtainable for his work, and the workman feels that his labor is being sold at the highest market price. The employer who insists on more service than he pays for, and the employee who de- mands excessive wages for his work, both lose in the long run. The former worries continually about how to manage dissatis- fied workmen, who are continually on the verge of a strike, and in dull times the lat- ter lives in constant dread that his employer 33 34 WORK, WAGES, AND PROFITS may no longer be able to continue business, and he may be out of work. In otlier words, unless efficient work goes with high wages, the result is apt to be disastrous to both em- ployer and employee, and if we would have satisfactory workmen we must learn how to make their labor efficient, for it is to effi- cient labor only that high wages can be uni- formly paid. Again, if a plant is badly laid out, if it contains inferior or antiquated machinery, or if the management is inefficient, it may be impossible for the best workman to do an amount of work really entitling him to good wages. Any one of these causes and others may explain why a plant, whose name for years has been a synonym for prosperity, has gradually become less prosperous, until finally it scarcely holds its own by decreas- ing the wages of its employees. The final stage of such a plant is to close down in- definitely, and to remain for years a monu- ment to the short-sighted policy of its own- ers and the misfortune of its employees. The time to make provision against such a fate is not when sharp competition begins to show the need of it, but when prosperous times produce a large surplus of earnings. EFFICIENT UTILIZATION OF LABOR 35 Out of such earnings ample provision should be made to take full advantage of all im- provements in apparatus or management that are available. Improving a plant does not necessarily mean enlarging it, but equipping it with the best and most efficient apparatus scientific investigation can suggest and ingenuity can devise. Improving the system of management means the elimination of elements of chance or accident, and the accomplishment of all the ends desired in accordance with knowl- edge derived from a scientific investigation of everything down to the smallest detail of labor, for all misdirected effort is simply loss, and must be home either hy the em- ployer or employee. In a proper system of management prac- tically all loss of this character is eliminated, and the saving effected by this alone will usually pay all the expenses of the system and leave a handsome profit. Wherever any attempt is made to do work economically the compensation of the work- man is based more or less accurately on the efficiency of his labor. Very fair success in doing this has been accomplished in day 36 WORK, WAGES, AND PROFITS work by keeping an exact record of the work done each day by every man, and by fixing his compensation accordingly. This method, however, falls very far short of securing the highest efficiency, for very few workmen know the best way of doing a piece of work, and almost none have the time or ability to investigate different methods and select the best. It often happens then that a man work- ing as hard as he can falls far short of what can be done on account of employing in- ferior methods, inferior tools, or both. We can never be certain that we have de- vised the best and most efficient method of doing any piece of work until we have sub- jected our methods to the criticism of a com- plete scientific investigation. Many people who have been accustomed to seeing an oper- ation performed in a certain way, or to per- forming it in that way for a number of years, imagine they know all about it, and resent the intimation that there may be some better wa}^ of doing it. Anybody, however, who carefully analyzes the sources of his methods will find that the mass of them are either inherited, so to speak, from his prede- cessor, or copied from his contemporaries. ITe will find that he knows but little of their EFFICIENT UTILIZATION OP LABOR 37 real origin, and consequently has no ground on which to base an opinion of their effi- ciency. Even such a simple operation as shoveling is done very uneconomically in many places. I have seen the same shovel used for coal, ashes, and shavings, and this when coke forks were available for the shavings. The fore- man had apparently given the subject no study, and was content if the men were at work. The idea of working efficiently had never occurred to him. This is, of course, an extreme case, but it is a real one, and all degrees of efficiency exist between this and the case where each workman is provided with the proper implement and given a spe- cific task, for the accomplishment of which he is awarded extra compensation. The knowledge needed to set a task, even in such a simple case as shoveling, is much greater than is at first realized, for hardly any two substances can be treated exactly alike, and the same substance is often much harder to shovel from the top of a pile than from the bottom, which rests on a smooth, hard surface. In studying shoveling the first thing to be determined is the size of shovel, which must be gauged to hold the weight 38 WORK, WAGES, AND PROFITS which it is most economical to handle. The second step is to find how long it takes to fill the shovel. For sand, fine coal, ashes, etc., it makes no difference in loading the shovel whetlier the material is taken from the top or the bottom of the pile; but in egg coal, broken stone, or lump ore, the difference is very great ; for, while it is quite easy to get a full shovel from the bottom of the pile which rests on a smooth, hard surface, it is, in some such cases, practically impossible to fill a shovel from the top of the pile without actually raking the material onto the shovel. Again, the distance or height to which the material is thrown is a factor in all cases, not only because the higher or longer throw takes slightly more time, but because it takes more energy. This analysis shows that each such opera- tion is composed of a number of elements, which may be studied separately. Having determined each element, they may be com- bined in a number of ways to show the time needed to fill and empty a shovel, with any material, under a variety of conditions. Knowing the time needed for an operation, we can add to it the percentage of time needed for rest, etc., which has been deter- EFFICIENT UTILIZATION OF LABOR 39 mined by a long series of tests, and calculate just how many shovelfulls a good man can average per minute without over-exerting himself. Having determined thus the amount of work that a man can do, we can usually get it done if we offer the proper wages for doing it, and furnish an instructor who will teach the workman how to do it. Having determined the best method and taught it to a capable workman, to whom good wages are paid for its successful opera- tion, would seem to be enough to assure that the work should be done that way perma- nently. Such, however, is not the fact, for while these conditions will usually produce the desired result, they will not always main- tain it, but must be supplemented by another condition, namely, no increase in wages over day rate on the part of the luorkman unless a certain degree of efficiency is maintained. The importance of maintaining a definite degree of efficiency is readily understood when we consider that a properly equipped plant has only its proper complement of each kind of machine, and if the output of any one falls below a certain amount the output of the whole plant is diminished in propor- tion and the profits fall off in a much greater 40 WORK, WAGES, AND PROFITS ratio. This fact does not appeal to the work- man who has made good wages for several days and concludes to take it easy for a while, unless he also feels the loss his easy going causes his employer. In order to get the best results these four conditions are necessary: First — Complete and exact knowledge of the best way of doing the work, proper ap- pliances and materials. This is obtainable only as the result of a complete scientific investigation of the problem. Second — An instructor competent and will- ing to teach the workman how to make use of this information. Third — Wages for efficient work high enough to make a competent man feel that they are worth striving for. Fourth — No increase of wages over day rate unless a certain degree of efficiency is maintained. When these four conditions for efficient work are appreciated their truth seems al- most axiomatic. They are worthy of a very careful consideration. SCIENTIFIC INVESTIGATION. The first condition is an investigation of how to do the work and how long it should EFFICIENT UTILIZATION OF LABOR 41 take. The fact that any operation, no matter how complicated, can be resolved into a series of simple operations, is the key to the solution of many prob- lems. Study leads us to the conclusion that complicated operations are always composed of a number of simple operations, and that the number of elementary operations is often smaller than the number of complicated op- erations of which they form the parts. The natural method, then, of studying a complex operation is to study its component element- ary operations. Such an investigation di- vides itself into three parts, as follows: An analysis of the operation into its elements ; a study of these elements separately; a syn- thesis, or putting together the results of our study. This is recognized at once as simply the ordinary scientific method of procedure when it is desired to make any kind of an investi- gation, and it is well known that until this method was adopted science made practical- ly no progress. The ordinary man, whether mechanic or laborer, if left to himself seldom performs any operation in the manner most economical either of time or labor, and it has been conclusively proven that even on ordi- 42 WORK, WAGES, AND PROFITS nary day work a decided advantage can be gained by giving men instructions as to bow to perform tbe work they are set to do. It is perfectly well known tbat nearly every operation can be, and in actual work is, per- formed in a number of different ways, and it is self-evident tbat all of tliese ways are not equally efficient. As a rule, some of tbe metbods employed are so obviously inefficient tbat tbey may be discarded at once, but it is often a problem of considerable difficulty to find out the very best method. To analyze every job and make out instruc- tions as to how to perform each of the ele- mentary operations requires a great deal of knowledge, much of which is very difficult to acquire, but the results obtained by this method are so great that the expenditure to acquire the knowledge is comparatively in- significant. iisrsTRucTiOasrs. As a result of our scientific investigation, we find in general that it is possible to do about three times as much as is being done; the next problem is how to get it done. No matter how thoroughly convinced we may be of the proper method of doing a piece of work EFFICIENT UTILIZATION OF LABOR 43 and of the time it should take, we cannot make a man do it unless he is convinced that in the long run it will be to his advantage. In other words, we must go about the work in such a manner that the workman will feel that the compensation offered will be perma- nent. When we have established this condition of affairs, we are ready to start a workman on the task, which, when properly set accord- ing to our investigation, can be done only by a skilled workman working at his best normal speed. The average workman will seldom be able, at first, to do more than two-thirds of the task, and, as a rule, not more than one out of five will be able to perform the task at first. By constant effort, however, the best workmen soon become efficient, and even the slower ones often learn to perform tasks which for months seemed entirely be- yond them. If our people have confidence in us and are willing to do as we ask, the problem of getting our task work started is easy. This, however, is frequently not the ease, and a long course of training is neces- sary before we can teach even one workman to perform his task regularly, for workmen are very reluctant to go through a course of 44 WORK, WAGES, AND PROFITS training to get a reward, especially when they fear that the high price will be cut when they can earn it easily. BUYING LABOR. Buying labor is one of the most important operations in modern manufacturing, yet it is one that is given the least amount of study. Most shops have expert financiers, expert designers, expert salesmen, and expert pur- chasing agents for everything except labor. The buying of labor is usually left to people whose special work is something else, with the result that it is usually done in a manner that is very unsatisfactory to buyer and seller. It is admitted to be the hardest prob- lem we have to face in manufacturing to-day, and yet it is only con^dered when the man- ager ''has time," or has 'Ho take time," on account of "labor trouble." The time to study this subject is not when labor trouble is brewing, but when employer and employee have confidence in each other. Men, as a whole (not mechanics only), pre- fer to sell their time rather than their labor, and to perform in that time the amount of labor they consider proper for the pay re- ceived. In other words, they prefer to work EFFICIENT UTILIZATION OF LABOR 45 by the day and be themselves the judges of the amount of work they shall do in that day, thus fixing absolutely the price of labor with- out regard to the wishes of the employer who pays the bill. While men prefer as a rule to sell their time, and themselves determine the amount of work they will do in that time, a very large number of them are willing to do any reasonable amount of work the employ- er may specify in that time, provided only they are shown how it can be done, and paid substantial additional amounts of money for doing it. The additional amount needed to make men do as much work as they can de- pends upon how hard or disagreeable the work is and varies (as previously stated) from 20 to 100 per cent, of their day rate. If the work is light and the workman is not physically tired at the end of the day he will follow instructions and do all the work called for if he can earn from 20 to 30 per cent, in addition to his usual day's wages. If the work is severe and he is physically tired at the end of the day he requires from 40 to 60 per cent, additional to make him do his work. If in addition to being physically tired he has been obliged to work under dis- agreeable conditions or in intense heat, he 46 WORK, WAGES, AND PROFITS may require 70 per cent, or even 100 per cent, additional. These facts are derived from ex- perience and give us a key to the intelligent purchase of labor. If we wish to buy the amount of labor needed to accomplish a cer- tain task, we must find out exactly, and in detail, the best method of doing the work, and then how many hours' labor will be needed by a man suited to the task working at his best normal rate. This is simply get- ting up a set of specifications for the labor we wish to buy, and is directly comparable to a set of specifications for a machine or a machine tool. The man who buys the latter without specifications is often disappointed even though the manufacturer may have tried earnestly to anticipate his wishes; and the man who buys the former under the same conditions has in the past almost universally found that a revision of his contract price was necessary in a short time. The relative importance of buying labor and machinery according to the best knowledge we can get, and the best specifications we can devise, is best illustrated by the fact that while the purchase price of a machine may be changed whenever a new one is bought, that of the EFFICIENT UTILIZATION OF LABOR 47 labor needed to do a piece of work should be permanent when it is once fixed. As was said before, few men can work np to these specifications at first, if they are properly drawn, but many men will try if they are properly instructed and assured of the ultimate permanent reward. Most men will not sacrifice their present wages to earn a higher reward in the future, and even if they were willing few men could afford to. Therefore, while they are learning to per- form the task, they must be able to earn their usual daily wages, and the reward for the accomplishment of the task must come in the form of a bonus above their daily wage. Increase in efficiency makes the payment of high wages possible, and it may be added that without efficient labor, high wages can- not be paid indefinitely, for every tvasteful operation, every mistake, every useless move has to be paid for hy somebody, and in the long run the ivorkman has to bear his share. Good management, in which the number of mistakes is reduced to a minimum, and use- less, or wasteful operations are eliminated, is so different from poor management, in which no systematic attempt is made to do away with these troubles, that a man who has al- 48 WORK, WAGES, AND PROFITS ways worked under the latter finds it ex- tremely difficult to form a conception of the former. The best type of management is that in which all the available knowledge is utilized to plan all work, and when the work is done strictly in accordance with the plans made. The best mechanical equipment of a plant that money can buy avails but little if labor is not properh" utilized. On the other hand, the efficient utilization of labor will often overcome the handicap of a very poor equipment, and an engineer can have no greater asset than the ability to handle labor efficienth^ The subject of wages is then inextricably bound up with that of management. Poor management usually means poor wages. Good management means good wages, for the high efficiency demanded by good man- agement can only be maintained by such wages as will attract good men and induce them to work at their highest efficienG5^ The manager who boasts of the low wages he is paying for his work would generally find, if he had a reliable cost system, that his costs were greater than those of his compet- itor who paid better wages. THE COMPENSATION OF WORKMEN Chapter III THE COMPENSATION OF WOEKMEN '\X7'E all like to feel that we are passing away from the age of violence, and approaching an age when justice and equity will have more influence in the world than brute force. If we rely too much upon the progress already made, however, we are bound to get into trouble. Kipling sounded a world note in his lines: "An' what 'e thought 'e might require, 'E went and took, the same as me." As far then, as acquiring property was concerned, he put the ancient Greek and the modern Briton in the same class. The Jap- anese-Russian war was caused by the fact that each of two powerful nations wanted the property of a third weak one. Neither had any right to it, but the fact that each wanted it was enough to set aside all ques- tions of right. Recently the seizure of the provinces of Bosnia and Herzegovina by Austria was another example of an act done 51 52 WORK, WAGES, AND PROFITS because the aggressor had the power to do it. The present alarm in Great Britain over Germany's armaments is not due to the fact that England thinks there is any real cause for a war, but the fear that if Germany has the power it will be used to the detriment of Britain. In other words, it is still accepted as common practice that "they should take who have the power and they should keep who can." To come a little nearer home, we find that large corporations are not very much more squeamish, or particular, than large nations. The Standard Oil Company, the Beef Trust, the Sugar Trust, and any number of others, have absolutely no regard, apparently, for right or wrong. They get what they can by any means available. The difference be- tween the savage and civilized communities is largely that the civilized communities have enacted laws which tend to restrain individ- ual greed. Inasmuch, however, as it is im- possible to foretell all the forms individual greed may take, it is impossible to enact in advance laws to cover all possible cases, and the best that can often be done is to make new laws to restrain new forms of greed as fast as they develop. Laws were msde ]nv'* THE COMPENSATION OF WORKMEN 53 ago that restrained robbers, sneak thieves, and even the *' robber barons," but none have so far been framed that restrain the ''high financier," who, without giving any- thing in return, taxes tlie community for his own benefit to an extent that makes all other forms of acquiring without giving an equi- table return seem utterly insignificant. One of the foremost American patent lawyers not long ago stated that the tremendous indus- trial success of the United States had been largely brought about by its beneficent pat- ent laws, and yet the greatest part of the legal talent among the patent lawyers is en- gaged in evading those very patent laws, which are so beneficent to the community. These statements only go to show that in general it is only in so far as the laws re- strain, that men fail to take advantage of each other. Certainly there are many hon- orable exceptions. There are many people who are actuated by higher motives, and who are doing a great deal to advance the cause of equity and justice, and to establish proper relations between human beings, and we give them all credit. But if we consider their methods the rule, and base our plans on them, we shall find that others, not quite 54 WORK, WAGES, AXD PROFITS SO scrupulous as we are, will get the better of us. Therefore in discussing the relations between employer and employed, we must recognize the fact that in the majority of cases, men still act on the principle that ''they should take who have the power and they should keep who can." This is true whether you are speaking of employer, or employed. Labor unions are just as insistent in their demands for things that do not belong to them, as the Sugar Trust is in its efforts to evade duties that it ought to pay. One of the best illustrations of this spirit of which I ever heard, was in- cident to the ending of a strike in a West- ern State, where the labor union had won. Soon after the men had gone back to work, one of the employers said to a workman, "I hope you are satisfied now." "No!" said he, *'we are not satisfied, and we never shall be, until we come to the works in our car- riages, and you walk!" As long as the interests of the employer and employee seem antagonistic there will be conflict, and in any discussion of the sub- ject, we must recognize that antagonism means conflict. Until we can find some means of doing away with the antagonism, the con- THE COMPENSATION OF WORKMEN 55 flict will continue. Onr search, then, must be for such means. If the amount of wealth in the world were fixed, the struggle for the possession of that wealth would necessarily cause antagonism; but, inasmuch as the amount of wealth is not fixed, but constantly increasing, the fact that one man has become wealthy does not neces- sarily mean that someone else has become poorer, but may mean quite the reverse, es- pecially if the first is a producer of wealth. The production of wealth can be so greatly facilitated by the co-operation of employer and employed that it would seem that if the new wealth were distributed in a manner that had in it even the elements of equity, neither party could afford to have the work- ing arrangement disturbed. As long, however, as one party — no mat- ter which — tries to get all it can of the new wealth, regardless of the rights of the other, conflicts will continue. On account of the disregard of law and order that unions so frequently show in their strikes, it is the fashion in many places to condemn them as utterly bad, when they are only human. As a matter of fact, they are not all bad by any means. They have done a 56 WORK, AVAGES, AND PROFITS great deal for the cause of workmen. If it had not been for them, the working people of today would probably be in the same con- dition as were those of England sixty or a hundred years ago. The average workman is a good citizen, just as loyal to his country as the capitalist, and just as proud of its po- sition in the world. He is even more inter- ested in its prosperity, for in times of de- pression, when the capitalist loses his sur- plus, the workman loses his means of living. It is a realization, perhaps, of the small mar- gin that they have above their absolute needs, that makes workmen so liberal to each other, for it is a well-known fact that the wage earner is far more liberal than the cap- italist. He will go much further out of his way to help a friend than the rich man will, although it is much harder for him to do so. Our method of studying labor problems in detail, and studying the individual work- men, has taught us much about them and given us a high opinion of them as men. The proportion of high-minded and honest men is just as great among them as among any other class, and far greater than among those people we continually hear complain- ing of them. Of course there are worthless THE COMPENSATION OF WORKMEN 57 and dishonest men among them, but the pro- portion is no greater than among those who have better opportunities. There are many individuals who do what they can to help their less fortunate friends, and there may- be unions formed to help the poor workman ; but as a business proposition, such a union cannot long be successful. Unions are formed, as a rule, by men of energy to help each other, and the poor workman is taken in, not for the good he does in the union, but the harm he does if not in. The poor work- man is thus advanced with the good, and the employer pays the bill. It is undeniable that unions have advanced the cause of workmen in general, and we must not blame them for using force to ac- complish their ends. It was the only means they had. If we wish them to use any other means we must provide them with a means that they will consider more desirable, and that will give better results, for in this coun- try, so long as a man conforms to the laws of the State, he has a right to govern his actions in such a manner as his interests seem to dictate. Men join the union because they think they will be better off in the long run for being in the union. The idea of the 58 WORK, WAGES, AND PROFITS union is to get a higher rate of wages for the whole class, because in general nobody in that class can get a substantially higher rate unless the whole class gets a higher rate. The employer usually pays but one rate of wages to one class of workmen, because, as a rule, he has no means of gauging the amount of work each man does. It is exceed- ingly difficult to keep an exact record of what each of a number of men does each day ; and even if he had such records, the difficulty of comparing them would be very great, unless the work done by each man was of the same nature, and done under the same conditions. The result is that he keeps no individual records, but usually treats all workmen of a class as equals, and pays them the same wage. There may be 20 per cent, who are very much more efficient than the rest, but he has no way of distinguishing them from the others with any degree of certainty; hence he declines to increase any wages, or makes the difference in wages insignificant as com- pared to the difference in efficiency. In hiring men he offers the wages he can get the cheapest man for, and if the good man stood out for higher wages, he would not get any wages at all. Hence if the good THE COMPENSATION OF WORKMEN 59 man is to get high wages, the whole of his class must get high wages. This is the strongest argument for the formation of la- bor unions, and when they are successful in raising the class wage, as they have repeat- edly been, the employer is forced to pay the poor man more than he is worth. The desire of the union to take in all the members of its class is not philanthropic. Self-preservation is the first law of nature. Under ordinary conditions a man will ad- vance himself first, and his neighbor next. He will join the union to advance his own in- terests, and it is only right and natural that he should advance his own interests. Any community made up of people who did not advance their own interests would very soon go to pieces. If a workman thinks it is to his interest to join a union, he has a legal right to do so. If we v/ish to prevent him, we must make it to his interest not to do so. In other words, we must provide him with means of advancing his interest that is su- perior to what the union offers. If any such scheme is to be permanently successful, it must be beneficial to the employer also. Under ordinary conditions where there is no union, the class wage is practically gauged 60 WORK, WAGES, AJJD PROFITS by the wages the poor workman will accept, and the good workman soon becomes dis- couraged and sets his pace by that of his less efficient neighbor, with the result that the general tone of the shop is lowered. On the other hand, when the union has had the class wage raised, the inefficient work- man is demoralized by getting more than he is worth, while the efficient man still does less than he could, for it is not absolute wages that stimulate exertion, but difference in wages. Thus under both non-union and union con- ditions, where no individual records are kept, the employer fails to get the efficiency he should, and the general tone of the shop runs down. This is very marked in many old shops which have been successful in the past. If shops are to be continually successful the efficiency of the workmen must not only not be allowed to decrease, but must be sys- tematically increased. Increase of efficiency is essentially a problem of the manager, and the amount to which efficiency can be in- creased by proper management is in most cases so great as to be almost incredible. Decrease in efficiency is not, as a rule, the fault of the workmen, but of the manage- THE COMPENSATION OF WORKMEN 61 ment, and the manager who continually com- plains of the decreasing efficiency of labor is simply advertising his own incompetence. There are only two methods of paying for work ; one is for the time the man spends on the work, and the other is for the amount of work he does. The first is day work. The second is piece work. All other systems, whatever may be their name, are combina- tions of these two elementary methods in dif- ferent proportions. It is natural that the employer should wish to get all the work he can for the money he spends. It is also nat- ural that the workman should wish to get all the money he can for the time he spends. Any other condition would be wrong, would be almost suicidal. These two conditions seem to be so antagonistic that most people give up any attempt to harmonize them, and adopt a scheme of bargaining. Bargains, as a rule, are made for a definite length of time, at the end of which they are revised. Under such a system the most aggressive group, or the one that has the most favorable condi- tions, wins in the long run. DAY WORK Chapter IV DAY WORK DAY WORK, or that in which men are paid for the time they spend, may be divided into two ckisses ; first, ordinary day work in which there is no attempt made to keep individual records, and every man of a ckiss receives the same wages regardless of the amount of work he does ; second, that in which the work is carefully planned be- forhand so that each man can have contin- uous work, and so that an exact record can be kept of what he does, and his rate of pay adjusted accordingly. The day rate of any class of men, such as laborers, weavers, machinists, moulders, etc., is regulated by supply and demand, except where it is regulated by the union; and in times of extreme depression even the unions are unable to keep up the rate. The rate may be, and usually is, different in different localities. Under the condition where no in- dividual records are kept, it does not make much difference whether one man is more 65 66 WORK, WAGES, AND PROFITS efficient than another or not; it is almost impossible for him to get a higher rate of wages than the rest of them. If the pay of one is raised, others are apt to claim that they also are entitled to an increase, and in the absence of records it is impossible often to disprove their claim. To save discussion, then, and possible trouble, the employer de- clines to sanction any increase of pay. The industrious and efficient man naturally be- comes dissatisfied and gradually slackens his pace to that of the poorer workman. Thus the employer, who pays only the rate the poorer man can earn, gets only the efficiency he pays for, even from his capable man, who thus works far below his capacity. This method of buying labor is similar to buying all materials sold under the same name at the same i^rice, without regard to quality; but it is much more wasteful, as the difference in the quality of materials is sel- dom as great as the range of efficiency in workmen. The result of this policy — and it is the logical result — is that the efficient man, the man with boundless energy to spare, says : *'I can't get any more money by doing more work. I am going to see if I can get it some DAY "WORK 67 other way." Then he organizes all his fel- lows into a union, and they all say, *'We want more money ! ' ' and they get it, and no man cares whether he does more work or not. The moral tone of the shop and the community is lowered, as is always the case when there is a resort to force. In the second class of day work some intel- ligent man studies the work to be done, lays it out carefully, perhaps several days ahead, provides the proper appliances, divides it up in such a manner that it can be done by in- dividuals or by men in small gangs, so an exact record can be kept of what each indi- vidual or gang does, and compensation be made accordingly. Such a method of hand- ling workmen has exactly the reverse ef- fect, and their efficiency begins to increase at once. When we increase one man's wages because his record shows he deserves it, it not only does not cause trouble with the other workmen, but it acts as a stimulus to them, and we are glad to have each workman know what the others are making. It is difficult and often impossible, es- pecially at first, to plan all the work of a plant and to keep a record of each workman, but some planning can be done, and some rec- X a a 1 1 •i » O Is u JS a cussed in detail in the subsequent chapters. TASK WORK WITH A BONUS Chapter VI TASK WOEK WITH A BONUS TN the preceding chapters an attempt has -'' been made to show that present labor conditions — that is, labor unions and em- ployers' associations — are a natural and al- most a necessary result of the present meth- ods of handling workmen. The horizontal wage, under which men in a certain class get a certain wage and under which it is prac- tically impossible for any individual to get much more than the average day, or piece- work, wage of the class, has its effect in causing the workmen of that class to com- bine to get the average wage of the class in- creased. It was also explained that as long as we classified workmen and paid those of one class substantially one wage, without greatly varying that wage according to efficiency, the efficient men, realizing that they could not get any more money than was paid to the average of their class, would continue to combine with the others in that class to have 103 104 WORK, WAGES, AND PROFITS the class wage raised. This is what they have done in the past; and, if we read hu- man nature aright, this is what they will do in the future, until some means has been de- vised by which the efficient man can get proper compensation for his work. When his compensation is independent of what the inefficient man gets, he will not worry him- self greatly about combining with the ineffi- cient man. The employer recognizes that the efficient man is worth more to him than the inefficient man, but most employers do not know any scheme by which they can com- pensate the efficient man according to his deserts, and avoid trouble with the ineffi- cient man. The object of this chapter is to show what we have accomplished both in the way of rewarding the efficient man, and of making the inefficient man efficient. In March, 1899, I became associated with the Bethlehem Steel Company to assist in putting into operation methods for increas- ing the efficiency of their labor. This work was being done by Mr, F. W. Taylor, with whom I had been associated twelve years previously in the Midvale Steel Company, where the methods underlying Mr. Taylor's TASK WORK WITH A BONUS 105 work originated, and where they are still in operation. One object that Mr. Taylor had in mind was to establish throughout the plant a sys- tem of i3iece work based on a scientific study of what could be done, and to make piece rates that should be permanent. The por- tion of the works that seemed to offer the greatest field was the main machine shop ; but before setting these piece rates it was necessary to make a great many changes. Machines in this shop had been located, not with reference to any particular system of management (because nobody had given the system of management any particular thought) but promiscuously, throughout the shop. In order to do work economically it was desirable to rearrange the machine tools in such a manner that a foreman, expert on one class of work, should be able to supervise that work. Accordingly the location of the machines was so changed as to place the large lathes in one group, the small lathes in another, the planers in another, etc. "While the machines were being moved they were respeeded to enable them to utilize to ad- vantage the improvements that had been 106 WORK, WAGES, AND PROFITS made in tool steel, Mr. Taylor at the same time making a large number of experiments* to determine the best shapes of tools and the best tool steel with which to do the work, which in this shop was very miscellaneous in character. Even when we got the shop re- arranged, much study still had to be done before we could know enough about the con- ditions to make permanent piece rates. The high degree of perfection demanded by Mr. Taylor took much time ; and the con- sequence was, that although slide rules for determining how to do m.achine work and in- struction cards for directing the workmen had been in use since 1899, the monthly out- put of the shop during the year from March 1, 1900, to March 1, 1901, had been but little more than the monthly average for the five years preceding. Up to this time we had devoted ourselves to the study of what could be done, and had done but little to cause the workmen to co- operate with us. This record shows that we had not in any measurable degree secured their co-operation. In other words, we had much knowledge, but were unable to get any substantial benefit from it because the men *The result of these experiments was the development of the Taylor-White method of treating tool steel. TASK WORK WITH A BONUS 107 would not help. Not being ready to intro- duce the differential piece-rate system, which was regarded as the ideal one for obtaining a maximum output, I felt that we should not wait for perfection, but should offer the workmen additional pay in some manner that would not interfere with the ultimate adoption of the differential* piece-rate sys- tem. Accordingly on March 11, 1901, I sug- gested that we pay a bonus of 50 cents to each workman who did in any day all the work called for on his instruction card. This was adopted at once, and Mr. E. P. Earle, the superintendent of the machine shop, suggested that we should also pay the gang boss (the man who supplied the work) or speed boss (foreman) a bonus each day for each of his men that earned his bonus. This was also approved, and both plans were ordered to be put into execution as promptly as possible. This bonus payment was begun at once, and on May 13 the assistant superintendent *The differential piece rate was devised by Mr. F. W. Taylor while withi the Midvale Steel Co., to stimulate maximum production. It consisted of a high rate per piece if a definite large product per day was attained, and a lower piece price if the output was less than the amount set. The effect of the system was to cause a big increase in wages for attaining a definite degree of efficiency. 108 WORK, WAGES, AND PROFITS of the machine shop, Mr. E. J. Snyder, made the following report: Mr. E. P. Eakle. Supt. of Machine Shop No. 2. Dear Sir: I hand you herewith some notes on the results obtained by the introduction of the "bonus" plan for remunerating' labor in Xo. 2 machine shop. (Here follow machine numbers and dates when they were started on this plan.) One of the best results after a short trial has been the moral effect upon the men. They have had it placed in their power to earn a very substantial in- crease in wages by a corresponding increase in their productive capacity, and this has given them the feel- ing that the company is quite willing to reward the increased effort. They display a willingness to work right up to their capacity, with the knowledge that they are not given impossibilities to perform. This effect has been brougbt about by the good use of our excellent slide rules in the hands of a number of the most thoroughly practical men, who, when the results which they demand have been declared impossible to obtain, have repeatedly gone out into the shop and themselves demonstrated that the time was ample, by doing the work well within the limits set. All this has inspired the confidence of the shop . hands, and the excellent instruction cards sent out are gradually evolving from laborers a most efficient lot of machine hands. . . . The percentage of errors in machin- ing has been very materially reduced, which is un- questionably due to the fact that in order to earn his bonus a man must utilize his brains and faculties to the fullest extent, and so has his attention closely fixed on the work before him, as every move must be TASK WORK WITH A BONUS 109 made to count. He thus has no time for dreaming, which was, no doubt, the cause of many errors. The condition of the machines is vastly improved. Most care has been taken to point out to the men that the best results can be obtained only by keeping their machines in good running condition, well-lubri- cated and cleaned. They have not been slow to realize this, and cases of journals cutting fast are very rare, while before the introduction of the "bonus" plan this was a very common occurrence. Breakdowns are also of a less frequent occurrence. The crane service lately has given us little trouble, and lack of crane service was formerly a constant excuse of the bosses and m6n for not being able to keep machines filled with work. The improvement in this case arose from the rule laid down that no exceptions or allowances would be made for delays due to this cause. It is only by the introduction of this "bonus" plan that we have had furnished the automatic incentive for men to work up to their capacity and to obtain from the machines the product which they are cap- able of turning out. It has lifted the hands of the speed bosses (foremen) and enabled them to act in the capacity for which those positions were created — that of instructors. These are some of the direct results obtained. In- directly it has eliminated the constant necessity for driving the men, and has enabled the shop manage- ment to divert some of its energy into perfecting the organization, which only will enable us to give a good account of the shop equipment. Much good has also resulted from putting the work through in lots, and keeping each machine as nearly as possible on the same kind of work. 110 WORK, "WAGES, AXD PROFITS It is also a pleasure to note in this connection the deep interest taken in the work b}^ the men connected with it, and the fine co-operative spirit which pre- vails among all hands. This report was made only two months after the bonus system was started, now nearly nine years ago, and is particularly valuable as it emphasizes some of the fun- damental jDrinciples on which successful work of this character must be founded. We must secure the confidence and co-operation of the workman by assuring him equitable compen- sation. If we fail to do this, any results we may get will be of short duration and our work will finally come to naught. Many of the failures to get continuously the high efifi- ciency which seemed easily possible, have been due to a disregard of the fact that the workman is entitled to a share in the bene- fits of increased efficiency, and in the long run will not co-operate unless he gets it. The attempt to drive the workman to in- creased efforts which benefit the employer alone, necessarily creates a force of opposi- tion which grows greater as it is carried far- ther. Finally, the force of opposition be- comes so great that further progress is im- possible and the system of management TASK WORK WITH A BONUS 111 based on force breaks down. This is as it should be, if we are to progress from an era of force to one of equity, and to make ob- solete the doctrine that "they should take who have the power and they should keep who can." Continual failure to obtain our ends per- manently by the use of force, and success in obtaining them by co-operation, will ulti- mately show that the selfishness that prompts the use of force is unintelligent, and that the most intelligent selfishness is that which shares the benefits equitably among those helping to obtain them. In closing the discussion on a paper on training workmen, read before the Ameri- can Society of Mechanical Engineers, De- cember, 1908, I made the following state- ment: A system of management may be defined as a means of causing men to co-operate with each other for a common end. If this co-operation is main- tained by force, the system is in a state of unstable equilibrium, and will go to pieces if the strong hand is removed. Co-operation in which the bond is mutual interest in the success of work done by intelligent and honest methods produces a state of equilibrium which is stable and needs no outside support. 113 WORK, WAGES, AND PROFITS In the paper itself the following statements are found: The general policy of the past has been to drive, but the era of force must give way to that of knowl- edge, and the policy of the future will be to teach and to lead, to the advantage of all concerned. It is too much to hope, however, that the methods about to be described will be adopted extensively in the near future; for the great majority of managers, whose success is based mainly on their personal abil- ity, will hesitate before adopting what seems to them the slower and less forceful policy of studying problems and training workmen; but should they do so, they will have absolutely no desire to return to their former methods. In some quarters I have been regarded as not making the most of opportunities because of adherence to this policy, but results in the long run have been so much greater and more stable than those obtained by the driv- ing method, that even the strongest advo- cates of force are beginning to recognize that in their desire to get great results quickly they may fail to get them permanently. To go back, however, to the Bethlehem Steel Works, we note that the average monthly output of the shop from March 1, 1900, to March 1, 1901, was 1,173,000 pounds ; and from March 1, 1901, to August 1, 1901, it was 2,069,000 pounds. The shop had 700 TASK WORK WITH A BONUS 113 men in it and we were paying on tlie bonus plan only about 80 workmen out of that en- tire 700. In September, 1901, the ownership of the works passed into the hands of Mr. Charles M. Schwab, and with this change came a change in management. Mr. Schwab had been brought up in a school where the drive method only was used, and he did not believe in any other. Mr. Taylor had already left the works, and the services of the writer and all others that had been prominent in installing the new methods were shortly dis- pensed with. An unintelligent selfishness on the part of the management soon caused them to cease paying any bonus to the foreman. Other changes gradually followed, and, although at- tempts were made to retain some of the me- chanical features of our methods, in a few years the essential principles of this work were practically eliminated and the eflficieDcy of the shop ran down to such an extent as to become notorious. A complete return to the drive method after repudiating these principles, has produced a series of labor troubles, which, at this writing, have culmi- nated in closing down the whole plant. 114 WORK, WAGES, AND PROFITS Contrast this ivith over thirty years' free- dom from labor troubles enjoyed by the Mid- vale Steel Company, where long ago these methods had their beginning. The plan as started at Bethlehem of pay- ing a fixed bonus for performing the task had one element of weakness, namely, that after the men had earned their bonus there was no further incentive to them. It was some time before I devised a satisfactory method for adding such an incentive, which was finally accomplished by paying the work- man for the time allowed plus a percentage of that time. For instance, if the time allowed for a task is three hours, the workman who performs it in three hours or less is given four hours* pay. He thus has an incentive to do as much work as possible. If the workman fails to perform the task within the time limit he gets his day rate. The time allowed plus the bonus is the equivalent of a piece-rate ; hence we have piece work for the skilled and day work for the unskilled. One other feature of this work at Bethle- hem had a most important effect on the re- sult — namely, that in addition to the bonus paid the foreman for each man under him TASK WORK WITH A BONUS 115 who made bonus, a further bonus was paid if all made bonus. For instance, a foreman having ten men under him would get 10 cents each, or 90 cents total, if nine of his men made bonus ; but 15 cents each, or $1.50 total, if all ten made bonus. The additional 60 cents for bringing the inferior workmen up to the standard made him devote his ener- gies to those men who most needed them. This is the first recorded attempt to make it to the financial interest of the foreman to teach the individual tvorker, and the import- ance of it cannot he over-estimated, for it changes the foreman from a driver of his m,en to their friend and helper. Under former conditions, the foreman hes- itated to teach the workman for fear the lat- ter might learn as much as he knew and pos- sibly get his job. Under the new conditions, the man who knows is paid for teaching others as much as he knows, and the others are paid a bonus for learning and doing what they are taught. It is this feature of the task and bonus system that has enabled us not only to obtain, but to maintain permanently, such satisfactory results. The expert work- man who becomes a good teacher soon makes his services valuable, for, by his assistance, 116 WORK, WAGES, AND PROFITS tve can often make the average efficiency of the shop even greater than his best efficiency was before we began to study the question of efficiency. He learns to remove obstacles which stood in his ivay when he was a simple workman, and often becomes an expert also not only at removing these obstacles, but at developing better methods to avoid them. Such, in brief, is the history of the devel- opment of the task and bonus system, which, starting as a substitute for differential piece work, gradually supplanted it, differing only by the fact that the worker who failed to earn the high rate got his day's pay instead of a lower piece rate, thus allowing the in- efficient workman a chance to earn a living while learning to become efficient. This ef- fort to help the poor workman by giving him a living wage and an instructor, enables us to utilize many bright young men who either did not have a chance to learn a trade, or did not appreciate it when they had it. This is an exceedingly large class, and one that we find everywhere. To review again the elements on which this system is founded, we note : 1. — A scientific investigation in detail of each piece of work, and the determination of TASK ^YORK WITH A BONUS 117 the best method and the shortest time in which the work can be done. 2. — A teacher capable of teaching the best method and shortest time. 3. — Reward for both teacher and pnpil when the latter is successful. Are not these elements sure to make for success? The fact that we have been able to develop promptly workmen who could satis- factorily perform any ordinary task is the best answer. This method of providing workers for the semi-skilled jobs of a factory has been so successful that we are led to ask whether our method is not the basis on which to found a system of instruction and training for apprentices and workmen in general. In a following chapter we shall show in de- tail what has been accomplished, and give data which prove that money invested in es- tablishing a scheme of management and training on these lines yields a very large re- turn. One of the best results of this work is that the trained workmen almost always hold on to their jobs, and the few that leave soon come back. Under our methods workmen take pride in being efficient. THE TASK IDEA Chapter VII THE TASK IDEA T TNDERLYING the theory and practice of ^ "Task Work with a Bonus" is an im- portant principle — a concept altogether dif- ferent in kind from that which actuates the ''drive" method, or the policy of urging men to mere strenuous toil, without any well- measured standard of how much work a man should reasonably do under the conditions of the case. This principle is the Task Idea. What are its elements and influences ? In studying a problem it is best to consider first the simplest form in which that problem presents itself, and one if possible in which the issues are perfectly clear to all. A good example for our purpose is to study the methods by which a child is taught to perform a simple operation. The in- variable method is to explain to the child as clearly as possible what is wanted, and then to set a task for it to accomplish. It may be noted that the accomplishment of the task is rendered much easier for both the 121 122 WORK^ WAGES, AND PROFITS child and the parent, if a suitable reward is offered for the proper performance. As a matter of fact, setting tasks and rewarding performance is the standard method of teaching and training children. The school- master invariably sets tasks, and, while they are not always performed as well as he wishes, he gets far more done than if he had not set them. The college professor finds the task his most effective instrument in get- ting work out of his students, and when we in our personal work have something strenu- ous or disagreeable to accomplish, it is not infrequently that we utilize the same idea to help ourselves, and it does help us. The inducement to perform the task is al- ways some benefit or reward. It may not al- ways be so immediate as the lump of sugar the child gets, but the work is still done for some reward, immediate or prospective. Further, it is a well-acknowledged fact that to work at a task which we recognize as being within our power to accomplish with- out overexerting ourselves, is less tiring and far more pleasant than to work along at the same rate with no special goal ahead. It is simply the difference between work- ing with an object, and without one. The THE TASK IDEA 123 hunter who enjoys following the trail of the moose, day after day, through snow and bit- ter cold weather, would find the same travel- ing very disagreeable except for the task he has set himself. To the uninitiated, golf seems a very inane sort of game, but its de- votees work at it with tremendous energy just for the satisfaction of reducing their score a few strokes. As they become more proficient, they become more enthusiastic ; for, having performed one task, there is al- ways one just a little harder to work at. A consideration of this subject will convince us that in the vast majority of people there readily springs up the desire to do some- thing specific if the opportunity offers, and if an adequate reward can be obtained for doing it. A NATUKAL METHOD The idea of setting for each worker a task with a bonus for its accomplishment seems thus to be in accord with human nature, and hence the proper foundation of a system of management. Our problem, then, is to find out how to set a proper task and what the reward should be for its accomplishment. The ideal industrial community would be 124 WORK, WAGES, AND PROFITS one in which every member has his proper daily task and receives a corresponding re- ward. Such a community would represent the condition of which Kipling says: "They shall work for an age at a sitting and never be tired at all." This is what Scientific Management in its best development aims to accomplish, for it aims to assign to each, from the highest to the lowest, a definite task each day, and to secure to every individual such a reward as will make his task not only acceptable, but agreeable and pleasant. Whatever we do must be in accord with human nature. We cannot drive people; we must direct their development. The greatest obstacles to the introduction of this method in the past have not been the workmen, but the foremen and others in au- thority. Those offering most objection have, as a rule, either not understood what was being done, or have felt their inability to hold their jobs if they were asked to perform them in accordance with the high standards set. Frequently, the higher they are in au- thority the less they can see that they should have a task set for them. Such a system THE TASK IDEA 125 bears hardest on those who hold their jobs by pull or bluff, and it is from them that we should expect the greatest oj^position. In this we are not disappointed. In fact, there is only one class that opposes ns more strongly, and that is the class which is using official position for private gain. Such peo- ple will often commit serious crimes in an attempt to prevent the exposure of their ir- regularities, and no concern, therefore, should undertake the installation of these methods, unless with the avowed purpose of eliminating all kinds of graft and special privileges. SCHEDULES AS TASKS The task idea is really so common that we do not recognize it. Every railroad schedule consists of a series of tasks, and in the manu- facture of such articles as sewing machines, tjrpewriters, and locomotives, the task idea is illustrated by the schedules according to which the various parts are started on their way through the different departments, and day by day make such progress as will bring them to the erecting shop at the proper time to be incorporated into the finished machine without delay. 126 WORK^ WxlGES, AND PROFITS In the case of locomotives, in particular, tlie task idea is specifically illustrated by the dates of shipment set, often months ahead, which are lived up to in a very remarkable manner. When the shipping date of a loco- motive has been set, there has also been set the time when every piece must start on its course through the shops to arrive at the appointed time in the erecting shop. Inas- much as this work has been done over and over again, all the principal men in the works know by heart the schedules of all the parts they are concerned with, and what their tasks are. Wherever the work is of one general char- acter, this condition exists, for each foreman, and in many cases the various workmen, soon learn the proper routes and time-schedules of the parts they are concerned with. The grand task of shipping at a predeter- mined date, then, consists of the sum of those detail tasks, each of which must be per- formed properly and in the proper sequence if the shipping date is to be lived up to. SCHEDULING MISCELLANEOUS WOEK Where the work is miscellaneous in char- acter, however, the task of having each part THE TASK IDEA 137 go through the proper sequence of operations and arrive at the erecting shop in the order wanted is not so easy. As a matter of fact, it is my feeling that the inability to get mis- cellaneous work through a shop on time be- cause of lack of proper schedules, and the delays caused thereby, are often the source of as much expense as inefficient work on the part of the operative. In a small shop one capable man can often so plan miscellaneous work, and keep account of it in his head, that but little expense is incurred from delays or interferences; but in the large shops of today, and especially in plants consisting of several shops, such a thing is quite impossible ; and the larger the shop or plant the greater the expense that arises from this source. This, then, is the greatest and most important task to be per- formed in any works, and it is one for which the management is solely responsible. To go into details of how such a task is performed would be impossible in the short time at my disposal. Suffice it to say, however, that, when a start has been made and each fore- man receives each day a list of jobs to be done that day, the general efficiency of the works is much increased, though nothing 128 WORK, WAGES, AND PROFITS whatever has been done to increase the effi- ciency of the individual workman. Although such an order of work is of great assistance to the foreman, its usefulness increases rap- idly as the work is so planned as to avoid in- terferences and to have all materials and appliances ready for the workman in ad- vance. With this result the efficiency of the individual increases, and, unless his ineffi- ciency is very flagrant, it is far better to solve this general problem first and to take up the efficiency of the workman later, except to the extent of keeping a daily record of his work; for when the large problem is solved, every advance made by the individ- ual counts for all it is worth, w^hich is not always the case when w^ork is done in the wrong sequence or by an inferior method. What I have said has often proved itself of value. Anybody who gives the subject thought will readily recognize the importance of it. I had a case a few years ago w^here there was a very good foreman of a certain shop — I say he was good because he intended to do the right thing and he was bright and he knew how to do the work — who neverthe- less had one failing, a very bad memory. He would promise anything and never perform THE TASK IDEA 129 it. It was not because he did not want to do it ; he would always forget. He honestly for- got. And when we gave him a list of the work in the order in which it was wanted, and presented him each day a list of the work he was to do next, he was perfectly delighted. I have had many similar cases and have always been able in this way to increase the efficiency of the foreman and of the work- men. In one case I was told that certain foremen in a large shop were useless; there was one in particular whom they Avould have to get rid of. Well, we did not discuss that question. We found that he was always be- hind in his work because he was always doing the wrong thing first. We went to work to straighten out what he should do and gave him each day a list of the work he w^as to do that day. In a short time he caught up with his work, and some months later he came to the superintendent of the shop and said, ''There is something wrong in this shop." The superintendent asked, "What is the matter?" "I don't know," said the fore- man; "but there is something wrong in this shop." "Well, what is it, if it is wrong?" "Well," the foreman replied, "nobody has 130 WORK, WAGES, AND PKOFITS been chasing me about my work for three days." That happened several years ago, and the man is still there as foreman. Having solved our large problem of sched- uling each part through the w^orks, and hav- ing devised means for knowing each day whether our schedules are lived up to or not, w^e come to what most people consider the real problem, that of setting a task for the workman. Many shops have a very nice schedule sys- tem; they plan their Avork beautifully — at least, it looks very pretty on paper ; but they have no means of finding out whether those schedules are lived up to or not. Usually they are not. I have been through shops where the superintendent or manager told me he had a fine system of management, and, having described his whole system to me, turned me over to a subordinate to take me around and see how it was working. It has been very seldom that I have found the sys- tem working the way the superintendent said it was. He had planned it and had given his orders, but when I got out into the shop and asked questions, I found that the foreman and the people charged with carrying out this system said, "We found we couldn't do THE TASK IDEA 131 it just that way and we have done it this way." One dear old man whom I knew very well w^as very proud of his shop system. He spent quite a time one day showing it to me, and then turned me over to one of his sub- ordinates to be shown the details of any- thing I Wanted to see. There w^as absolutely nothing going as he said it was going. The force had not argued with him ; they had just gone on and done things in their own way. He had this beautiful system all on paper. It looked to me pretty complicated, but he thought it was fine. Everybody was going on just the same as before, and he was ig- norant of the fact. They never brought it up to him; they got things out the best way they could, made whatever excuses were necessary, and got through. With regard to the subject of tasks it may be said that it is only in those cases where the number of routes is small and the se- quence of operations fixed, that proper tasks can be set for the workman before the solu- tion of the general problem. I have been working at one plant for a year and a half where they had a pretty good system of man- agement, and we have not set a task yet. We have been straightening out their routes. 132 WORK^ WAGES^ AND PROFITS We have been fixing it so that the work should go through the shop in the order wanted and not by the snap judgment of some individual. As soon as we have got into the various rooms — in many cases rooms which were crowded and where work was stacked all round the room — and begun to plan the work so as to have it done in proper sequence and without delay, congestion has disappeared. That has happened in so many cases that it cannot be attributed to acci- dent. In one case the shop was filled with small boxes of little pieces that were in pro- cess. There were a great many of those boxes. I said, "The first thing, gentlemen, is to get some racks made and classify these boxes according to the operation which is next to be performed on the pieces." They saw they had a great many boxes there and they built a corresponding number of racks. When they got this work classified and began to lay it out, they found they had many more racks than they needed. The work kept mov- ing instead of standing there. In many factories the amount of work in process, moving in a desultory way through the factory, is two or three times as great as there is any necessity for, if its course THE TASK IDEA 133 were properly planned. It not only takes up factory space, but it ties up a large amount of capital where work is not properly planned. The ordinary stock-keeper or fore- man always wants to give himself about two or three times as much time as is needed to get the work done. He always expects that when a man promises to give him something next Monday, it will be Monday week or Monday two weeks before he will get it. And that is true if the planning of that work is left to a series of foremen. There are many reasons why that has to be so. It is imprac- ticable to do it in any other way. If, how- ever, all that planning is done from one cen- tral headquarters, and each man knows how much he has to accomplish, and it is put up to him in such a way that he can accomplish it, it gets through pretty regularly. To send a clerk into a shop to time work- men with a stop-watch and set rates, or tasks, naturally arouses the opposition of the work- men ; and while no doubt it has been possible in many cases to get more work by so doing, no doubt, also, its effect on the industrial conditions of the country at large has been decidedly detrimental. It creates opposition, and justly. 134 WORK, WAGES;, AND PROFITS Working at tasks is not a hardship, but a pleasure, if they are properly set and ade- quately rewarded. Before task-setting can be carried on satisfactorily, the workmen must be convinced that we are not approach- ing them with a scheme for driving, but with one by which they will be benefited. They must be satisfied, too, that the man who is going to study their work knows what he is doing. He should not be a clerk picked up at random and given a stop-watch; he should be a man who knows what the prob- lem is and how to solve it. PEEPARATION FOR TASK-SETTINQ Among the steps to be taken before setting a task are : to get all machines and appliances in proper order, to establish a proper tool- room where suitable tools can be obtained for work, to arrange to supply the workmen with material in the order wanted, to plan work so that it is very seldom that one job shall be stopped to make way for another. In other words, before we begin the problem of task-setting for the individual, we should arrange conditions so that he can work to the best advantage, with proper ventilation and a comfortable temperature. These con- THE TASK IDEA 135 ditions alone will materially increase output, for petty annoyance of any kind reduces efficiency. If the work requires mechan- ical skill or ability, the problem should be studied by the most capable mechanic avail- able, and specific instructions given as to the best way to do the work and the time re- quired to do it. If necessary (and it usually is) the investigator and task-setter should now turn instructor and show the w^orkmen how to do the work, and the task should be such that a good workman can readily learn to perform it. If the task is set in this man- ner by a man in whose ability and honesty the workman has confidence, I have but little difficulty getting the task-work started, pro- vided a proper bonus is offered. This leads to the question, What is a proper bonus? The reply is that it is such a bonus as will make the workman feel that he is fully compensated for any extra exer- tion he puts forth. Judging from this point of view, it is evi- dent that the bonus depends upon the sever- ity of the work. It varies, as a rule, from 20 per cent to 50 per cent of the day rate. Task work does not necessarily mean more severe work, but it does mean more continu- 136 WORK, WAGES, AND PROFITS ous work, and work under more favorable conditions, which always produces greater efficiency. The attempt to set a task so severe that very few people can be taught to perform it is of no advantage from any standpoint, for few will continue to strive for a reward which they cannot reach. I have seen em- ployers who were much surprised that they did not get an increased output where they had set a reward for it — surprised that the reward was being earned by one or two only out of fifty or sixty. When a workman has made up his mind that the reward is beyond him, it has no effect. PEKFOEMING THE TASKS Having set a task, the responsibility for the performance does not rest upon the work- man alone, but must be shared by the in- structor, who must see that the conditions under which the task was set are maintained. That is an essential difference between task work with bonus and the ordinary form of piece work. The ordinary form of piece work is to fix a piece rate, and then let any- body do it, if he can; if he cannot, he gets out. We believe that it is our duty to show THE TASK IDEA 137 the man how to do it, and to do whatever we can to help hnn perform his task. To com- plete the scheme, therefore, every case of lost bonus must be investigated and the reason determined. Such investigations, when the case is that of a man who has learned the work, usually lead to the discovery of slightly defective material, imperfect tools, machine out of order, or any one of a large number of things that might hamper the out- put considerably, but which would not be noticed unless a special search was made for them. Thus, the setting of a proper task for a tcorkman also imposes obligations on, or sets tasks for, the management, with the in- variable result of a better and cheaper product, TASK WOEK IN A MACHINE SHOP The setting of machine-shop tasks is to- day quite different from what it was ten years ago. At that time machine operations took a relatively long time, and the time be- tween operations was of much less impor- tance. Today, when machine operations are, as a rule, three times as fast, the time of changing jobs has become three times as im- portant, and to plan our work so that there 138 WORK, WAGES, AND PROFITS will be no time lost in going from one job to another has become a far greater factor. For each machine-tool operative today, there has to be planned nearly three times as much work as formerly, and necessarily the super- vising force must be much greater. It is this increase in machine-tool capacity which has induced me to lay emphasis on the general scheduling of work, so that no more time than necessary shall be taken in changing jobs. The ratio between the number of men actu- ally engaged on mechanical work and those engaged in supervising or preparing work must necessarily be quite different from what it was before the advent of high-speed steel and methods of instruction and task setting. Task setting in every kind of shop is simi- lar, and although we do not have high-speed steel to reduce time in non-metal-working shops, we have, in many cases, something similar, the benefit of ^vhitjh is never fully realized until a proper and detailed study is made of the possibilities. I could give numerous illustrations of this. For instance, in the bleaching of cloth there are several jDrocesses, one of which is to sub- ject the cloth to the action of an acid. I found a variety of opinion in the plant in THE TASK IDEA 139 which I first worked as to how long the cloth should be subjected to this treatment. They told me that they thought an hour was neces- sary. By watching their performances, I found that, while the man who told me that an hour was necessary usually subjected his cloth to the action of the acid for an hour, he sometimes allowed it to stay in the acid for several hours and sometimes only five min- utes. That, of course, opened a field for in- vestigation. He also told me how strong the acid should be, and insisted that he always kept it at that strength. "We secured samples of his solution at different times and found that the strength varied from about 1 per cent to 7 per cent. That also opened up a line of study. We found but little difference between cloth which had been acted upon five minutes and that which had been acted upon for an hour. As a result of our studies, we found the strength of acid needed and the time the cloth should remain subjected to it. It had been the practice to pile the cloth in a series of piles, and when it had remained long enough in these piles, to sew the ends together again and to pull it through the subsequent solutions. This method necessi- tated the sewing of the top of the second pile 140 WORK, WAGES, AND PROFITS to the bottom of the first. As this process was usually repeated several times in the bleaching, it is easily seen that the pieces of cloth naturally became pretty thoroughly "shuffled" by the time the bleaching was completed. If the rope contained several kinds of goods, as was usually the case, the kinds were often so thoroughly mixed that they could not be gathered together again, except with much care and labor. The re- sult was that people frequently did not get all of the goods that they sent to the bleach- ery, but they got somebody's else, which were sometimes as good, and sometimes not. The discovery that those goods could be treated in a few minutes enabled us to make a remarkable change in the work and elim- inate a great deal of labor, besides keeping all the goods in exactly the order they went in. We devised a machine which automatic- ally turns upward the leading end of a pile of goods formed in it. From this leading end the goods are pulled off at exactly the same speed as that at which they are added to the pile. Thus all goods remain in the pile ex- actly the same length of time and are treated exactly alike, with the result of a uniformity of bleach before unattainable. THE TASK IDEA 141 The length of time the goods remain in the pile is governed by the judgment of the bleacher and is limited by the size of the machine. Several machines may be placed in series if it is desired to have the time very long. By means of this machine it has been pos- sible to bleach a number of small lots of different kinds of cloth together, yet to keep each lot intact, and to deliver to the finisher goods so uniform that he can feel sure that like treatment will produce like results. He is thus able to mix his starch according to his formula and be sure of his result. This one thing has had as much influence on the cotton-finishing industry as improved tool steel has had on the machine-shop indus- try. I say it has had — it will have, when it is extended to the degree to which it will ulti- mately be extended. The development is proceeding and it is being gradually extended throughout the country. This suggests that, in a non-metal-work- ing industry, there is nearly always some- thing in which improvement can be made, just as improvement has been made in the metal-working industry by high-speed tool steel. 142 WORK, WAGES, AND PROFITS We have found that if work is properly planned, so that unnecessary delays do not occur and the workmen are provided with proper implements to enable them to per- form their tasks in the best manner we can devise, they can, as a rule, w^herever the amount of work done depends upon physical exertion, do an average of three times as much as they did on day work, before plan- ning and task setting were begun, and feel no more tired at night. MAINTAINING PEOPER CONDITIONS While the setting of tasks under the proper conditions and in the proper spirit, accom- panied by a suitable reward for accomplish- ment, is of great advantage, it is essential that the conditions under which the tasks have been set should be maintained perma- nently. Failure to maintain these conditions will work hardship on the workman and will make it impossible many times for him to perform his task. No one, therefore, should undertake the introduction of task work, un- less he is prepared to maintain the condi- tions of his shop at a high standard; other- wise dissatisfaction is sure to spring up. The sum of the tasks which can be per- THE TASK IDEA 143 formed by the individuals of the shop is the shop task, and the sum of the tasks of the shops is the factory task. Every foreman who can succeed in the accomplishment of his shop task should be properly rewarded. In such a scheme as this the foreman and the workmen are brought together by mutual interest, and there develops a spirit of co- operation. Under this scheme also it is perfectly evident that there will be a decided increase in profits. STJMMAPT A task has a psychological effect which is very striking. Eailroad schedules are tasks. Miscellaneous work is done badly and uneco- nomically because it is usually done without scheduling or task-setting. Tasks should not be set until we have arranged to main- tain permanently the conditions necessary for the performance of the task. The set- ting of a proper task for workmen neces- sarily sets a task for and imposes obligations upon the management. The setting of proper tasks in a machine shop today im- poses upon the management more strenuous tasks than it did before the advent of high- speed tool steel. TRAINING WORKMEN IN HABITS OF INDUSTRY AND CO-OPERATION Chapter VIII TEAINING WORKMEN IX HABITS OF IN- DUSTRY AND CO-OPERATION '"T^HE widespread interest in the training of "*• workmen which has been so marked for several years is due to the evident need for better methods of training than those now generally in vogue. The one point in which these methods as a class seem to be lacking is that they do not lay enough stress on the fact that workmen mnst have industry as well as knowledge and skill. Habits of industry are far more valuable than any kind of knowledge or skill, for with such habits as a basis, the problem of acquir- ing knowledge and skill is much simplified. Without industry, knowledge and skill are of little value, and sometimes a great detriment. If workmen are systematically trained in habits of industry, it has been found possible not only to train many of them to be efficient in whatever capacity they are needed, but to develop an effective system of co-ojDeration 147 148 "WORK, AVAGES, AXD PROFITS between workmen and foremen. This is not a theory, but the record of a fact. It is too much to hope, however, that the methods here described will be adopted ex- tensively in the near future, for the great majority of managers, whose success is based mainly on their personal ability, will hesitate before adopting what seems to them the slower and less forceful policy of studying problems and training workmen ; but should they do so they will have absolutely no de- sire to return to their former methods. The general policy of the past has been to drive ; but the era of force must give way to that of knowledge, and the policy of the fu- ture will be to teach and to lead, to the ad- vantage of all concerned. The vision of work- men, in general, eager to co-operate in car- rying out the results of scientific investiga- tions must be dismissed as a dream of the millennium, but results so far accomplished indicate that nothing will do more to bring about that millennium than training work- men in habits of industry and co-operation. A study of the principles on which such train- ing has been successfully established will con- vince the most skeptical that if they are car- ried out the results must follow. An outline TRAINING ^VORKMEN TO INDUSTRY 149 of these principles was originally submitted to the American Society of Mechanical En- gineers in a paper entitled ''A PJonns System of Rewarding Labor." Under this system* each man has his work assigned to him in the form of a task to be done by a prescribed method with definite appliances and to be completed within a cer- tain time. The task is based on a detailed in- vestigation by a trained expert of the best methods of doing the work, and the task setter, or his assistant, acts as an instructor to teach the workmen to do the work in the manner and time specified. If the work is done within the time allowed by the exj^ert, and is up to the standard for quality, the workman receives extra compensation in ad- dition to his day's pay. If it is not done in the time set, or is not up to the standard for quality, the workman receives his day's pay only. This system, in connection with the other work of Mr. F. W. Taylor, greatly increased the output and reduced the cost of the work *A Bonus System of Rownrrling Labor, December. 1001, a system of task work with a bonus which had recently been introduced by the writer into the large machine shop of the Bethlehem Steel Company, as a part of the system of manatrement, being introduced into their works by Mr. F. W. Taylor. 150 "WORK, AVAGES, AND PEOFITS in the large machine shop of the Bethlehem Steel Company. In the closing remarks on the above paper, I emphasized the value of the system as a means of training workmen, and the late Dr. Eobert H. Thurston, in his discussion of it, was so optimistic as to the results it would produce on ''workmen and foremen and em- ployer alike" that I felt that my enthusiasm over a new and promising method had car- ried me, perhaps, a little too far. Results have fully justified Dr. Thurston's predic- tions, however, for today the method has been developed as a practical system of edu- cation and training for all, from the highest to the lowest. The fact, so repeatedly em- phasized by Mr. Taylor, that tasks should be set only as' the result of a scientific investiga- tion, has proven of an educational value hardly to be over-estimated, for the scientific investigation of a process that has been de- veloped without the assistance of science al- most always reveals inconsistencies which it is possible to eliminate, thus perfecting the process, and, at the same time, reducing its cost. It is this scientific investigation that points to improvement in methods and educates TRAINING WORKMEN TO INDUSTRY 151 owners and managers, but the average work- man is interested only in his daily wage and has no special desire to learn improved methods. The results of onr investigations are of little practical value, therefore, unless we can first teach our workmen how to use them, and then can induce them to do as they are taught. PRACTICAL APPLICATION. For this purpose an instructor, a task, and a bonus have been found most useful. People as a rule prefer to work at the speed and in the manner to which they have been accus- tomed, but are usually willing to work at any reasonable speed and in any reasonable man- ner, if sufficient inducement is offered for so doing, and if they are so trained as to be able to earn the reward. In carrying out this plan we try to find men who are already skilled and able to perform the task set. It frequently happens, however, that the num- ber of such men is insufficient and it takes time to train the unskilled to a jDroper de- gree of efficiency ; but with a bonus as an in- centive, and a proper instructor, a very fair proportion of the unskilled finally succeed in performing a task that was at first entirely beyond them. 152 WORK, WAGES, AXD PROFITS Unskilled "workmen, who under these con- ditions have become skilled in one kind of work, readily learn another, and soon begin to realize that they can, in a measure, at least, make up for their loss in not having learned a trade. As they become more skilled, they form better habits of work, lose less time and become more reliable. Their health improves, and the improvement in their gen- eral appearance is very marked. This im- provement in health seems to be due to a more regular and active life, combined with a greater interest in their work; for it is a well-known fact that work in which ive are in- terested and which holds our attention with- out any effort on our part, tires us much less than that ice have to force ourselves to do. The task with a reward for its accomplish- ment produces this interest and holds the at- tention, with the invariable results of more work, better work, and better satisfied workers. The "Task and Bonus" method of train- ing not only furnishes the workmen with the required knowledge, but by offering an in- ducement to utilize that knowledge properly, trains him in proper habits of work. TRAINING WORKMEN TO INDUSTRY 153 HABITS OF WORK. In all work both quantity and quality must be considered, and onr task metbod demands a maximum quantity, all of which must be up to the standard for quality. Workmen trained under this method acquire the habit of doing a large amount of work well, and disprove the oft-repeated fallacy that good work must be done slowly. As a matter of fact, our quickest workers almost always do the best work when following instructions. We set great store by the habit of working quickly, for no matter how much skill a workman may have, he will not attain the best success with- out quickness. Habits of work in a mechanic are compar- able with habits of thought in an engineer, and our industrial schools should make proper habits of work the basis on which to build their training in manual dexterity. The engineering school does not make engineers, but tries to furnish its graduates with an equipment that will enable them to utilize readily and rapidly their own experience and that of others. In the same manner, indus- trial training schools should equip their grad- uates with habits of industry that will make 154 WORK, AVAGES, AND PROFITS them, as meclianics, capable and willing to do a large amount of good work. As I see it, one of the most valuable assets that the grad- uate of a technical college or an industrial school can have is the habit of doing promptly and to the best of his ability the work set be- fore him. With this habit and reasonable in- telligence he can make good progress. This habit is one of the first results of the "Task and Bonus" system, for it is a noticeable fact that task workers form habits of indus- try which they maintain even when on day's work with no bonus in sight. In all schemes for technical or industrial education or training that I have seen, em- phasis has been laid on the importance of knowing how. I wish to add that ability and willingness to do are of at least equal im- portance. Many skilled workmen make their skill an excuse for slow work, and unless when they are taught hoiv to do they are also taught to do efficiently, they never attain the success that should be theirs. Under our task system the workman is taught hoiv and trained to do at the same time. Knoiving and doing are thus closely associated in his mind, and it is our experi- ence that the habit of doing efficiently what TRAINING WORKMEN TO INDUSTRY 155 is laid out for him becomes so fixed that he performs without hesitation tasks at which a man not trained to follow instructions would absolutely fail. This is exactly what should be expected, and means nothing more than that in our industrial army the work- man who has gained confidence in his su- perior follows his orders without hesitation, just as the private soldier follows the orders of his officer, even though he does not see where they lead. This is not a fanciful com- parison, for I have known more than one case in which a workman expressed his doubts as to the possibility of doing a task, and on get- ting the reply that the task was all right, said, "If you say it can be done, I will do it." Workers who have been unable to perform their tasks in the time set have frequently asked to have an instructor stand by them with a stop-watch to time the detail opera- tions and show them just wherein they failed, with the result that they soon learned to earn their bonus regularly. The first essential for a workman to be- come successful under our task system is to ohey orders, and having acquired this habit he soon finds out that a skilled investigator can learn more about doing a piece of work 156 WORK, WAGES, AKD PROFITS than he knows "off-hand." Having satis- fied himself on this point, he goes to work at the tasks set him with the determination to earn his bonus, with the result, if he has the natural ability, that he soon becomes a rapid and skillful workman. Learning to obey orders is often the hard- est part of the workman's task, for a large percentage of men seem so constituted as to be apparently unable to do as they are told. As a rule, however, this is a feature of a cer- tain stage of their development only, which, under proper conditions, they overcome at a later date. For instance, many very cap- able men who were impatient of restraint when they should have learned a trade, find themselves at the age of twenty-five, or less, in the class of unskilled workmen, although their ability would have enabled them to do well at almost any trade. It is this class of men, when they have come to realize the dif- ference between a skilled workman and one not skilled, that furnishes us with many of our best task workers. Such men often see in our instructor, task, bonus, a chance to re- deem some of their earlier errors, and by learning thoroughly how to do, and doing one thing after another, in the best way that TRAINING WOUKMKX TO IXDISTUV 157 can be devised, get in a short time a train- ing that does much to make up for the pre- vious neglect of their opportunities. BOSSES AS SERVANTS AND TEACHERS. In a shop operated on this system, where each workman has his task, one man whom we term a gang boss usualh' tends a group of workmen, supplying them with work and appliances and removing the work when fin- ished. Such a man is paid a bonus for each workman who earns a bonus, and an extra bonus if all of his group earn their bonuses. The result is that so long as the workmen perform their tasks, though nominally their boss, he is really their servant, and becomes the boss only when a workman fails to per- form his task. The loss of money to the gang boss in case a workman fails to earn his bonus is such that he constantly has his eye on the poor workman and helps him all he can. If, however, he finds that the workman is incapable of being taught, he uses his in- fluence to have a better man put in his place. In starting a shop on task work, an in- structor who is capable of teaching each workman how to perform his task must be constantly on hand, and must, as a rule, teach 158 WORK, WAGES, AND PROFITS one workman at a time. This instructor may be the man wlio lias investigated the work and set the task, or he may simply be an in- structor capable of following out the work of such an investigator, but he must be read- ily available as long as any of the workmen need his services, for we make it a rule not to ask a man to do anything in a certain man- ner and time unless we are prepared to show him how to do it as we specify. TASK SETTING. A task must always be set for performing a definite operation in a specific manner, a standard time being set for its accomplish- ment. As compensation, the workman is paid for the time set plus a percentage (usually 20 to 50) of that time, provided the work is done in the time allowed or less. If the time taken is more than the time allowed, the workman gets his day's pay only. The fact that in setting the task the manner of per- forming the operation is specified enables us to set another task for the same operation if we develop a better or quicker method. If after having performed his task a work- man wishes to suggest a quicker or better method for doing the same work, he is given TRAINING WORKMEN TO INDUSTRY 159 an opportunity if possible to demonstrate his method. If the suggested method really proves to be quicker or better, it is adopted as the standard, and the workman is given a suitable reward. No ivorkman, Jwtuever, is allowed to make suggestions until he has first done the ivork in the manner and time speci- fied. It is the duty of the investigator to de- velop methods and set tasks, and unless the methods developed by him are pretty gen- erally a great deal better than those sug- gested by the workmen, he is not retained in the position. Working at tasks is pretty good training for task setting, and I have gotten more than one task setter from the ranks of task doers. Inasmuch as, after a satisfactory method has been established, a large proportion of the work of the task setter is the study of the time in which operations can be performed, he is popularly known as the ''Time Study" man. This term has led to a misconception of his duties and has caused many honest people to claim that they were putting in our methods when they have put a stop watch in the hands of a bright clerk and told him to find out how quickly the best men were doing 160 WORK, WAGES, AND PROFITS certain work. Unquestionably they have in many cases been able to set more accurate piece rates by this method than they had been able to set by the older methods, but they are still far from our ideal, in which the best expert available investigates the work, stand- ardizes the appliances and methods, and sets a task that involves utilizing them to their very best efficiency. While the stop watch is often used to establish a method, it is used to determine the time needed to do the work only when the standard methods and appli- ances are used efficiently. Stop-watch ob- servations on work done inefficiently, or with ill-adapted appliances, or by poor methods, are absurd and serve only to bring into dis- repute all work in which the stop watch is used. Moreover, such use of the stop watch justly excites the contempt and opposition of the workman. To make real and permanent progress, the expert must be able to standardize appli- ances and methods and write up such in- structions as will enable an intelligent work- man to follow them. Such standards become permanent, and if the workman is paid a proper bonus for doing the work in the man- ner and time set, he not only helps maintain TRAINING "WOliKMEN TO INDUSTRY Kit the standards, but soon begins to exert liis influence to help the progress of standardi- zation. STANDARDIZATION. All work, and all knowledge, for that mat- ter, may be divided into two classes : Expert and Standard. Expert knowledge may be described as that which has not been reduced to writing in such a manner as to be gener- ally available, or exists only in the minds of a few. By analogy, expert work is work the methods of doing which either are known only to a few or have not been so clearly de- scribed as to enable a man familiar with that class of work to understand them. On the other hand, standard methods are those that are generally used, or have been so clearly described and proved that a man familiar with that class of work can understand them and safely employ them. The largest problem of our expert is to standardize expert methods and knowledge. When a method has been standardized, a task may be set, and by means of an instruc- tor and a bonus a method of maintaining that standard permanently may be established. With increasing efficiency on the part of the 16/i "WORK, WAGES, AXD PROFITS workman the standard always has a tendency to become higher. AVe have here the work- man and the foreman using their efforts to maintain standards, for both fail to obtain a bonus if the standard is not maintained. This is so different from the case in which the standard is maintained only by the man in authority with a club, that there can be no comjDarison. From workmen trained under these methods, we get a good supply of in- structors and foremen, and occasionally an investigator. From our investigators, who standardize our methods and appliances, we get our superintendents, and our system of management thus becomes self-perpetuating. The superintendent who believes that the sov- ereign cure for all troubles is to go into the shop and raise a row, has no place under our methods ; for when the task and bonus has been established, errors are far more fre- quent in the office than in the shop, and the man who is given to bluffing soon finds that his methods produce no effect on men who are following written instructions. OBSTACLES. Among the obstacles to the introduction of this system is the fact that it forces every- TRAINING A^OI;KMI■:X TO INDUSTRY 163 body to do liis duty. Many a man in autlior- ity wants a system that will force everybody else to do his duty, but will allow him to do as he pleases. The ''Task and Bonus" sys- tem when carried out properly is no re- specter of persons, and the man who wishes to force the workman to do his task properly must see that the task is properly set and that proper means are available for doing it. It is not only the workman's privilege, but his duty, to report whatever interferes with his earning his bonus, and the loss of bonus soon educates him to perform this duty no matter how disagreeable it is at first. We investigate every loss of bonus, and place the blame where it belongs. Sometimes we find it belongs pretty high up, for the man who has neglected his duty under one system of management is pretty apt to neglect it at first under another. He must either learn to perform his duty or yield his place, for the pressure from those who lose by his neglect or incompetence is continuous and insistent. This becomes evident as soon as the task and bonus gets fairly started and the effect is that opposition to its extension develops on the part of all who are not sure of mak- ing good under it, or whose expert knowledge 164 WORK, WAGES, AND PROFITS is sncli that they fear it will all soon be stand- ardized. The opposition of such people, however, is bound to give way sooner or later, for the really capable man and the true expert welcome these methods as soon as they understand them. HELPS. The fact that the task and the bonus en- able us to utilize our knowledge and maintain our standards, and that the setting of tasks after a scientific investigation must neces- sarily not only increase our knowledge but standardize it, brings to our assistance the clearest thinkers and hardest workers in any organization. Our greatest help, however, comes from the workmen themselves. The most intelligent soon realize that we really mean to help them advance themselves, and the ambitious ones welcome the aid of our instructor to remove obstacles that have been in their way for perhaps years. As soon as one such man has earned his bonus for sev- eral days, there is usually another man ready to try the task, and unless there is a great lack of confidence on the part of the men in the management, the sentiment rap- idly grows in favor of our task work. TRAINING WORKMEN TO INDUSTRY 165 DAY WORK AND PIECE WORK. As used by me, the "Task and Bonus" system of pay is really a combination of the best features of both day and piece work. The workman is assured his day rate while being taught to perform his task, and as the bonus for its accomplishment is a percentage of the time allowed, the compensation when the task has been performed is a fixed quan- tity, and is thus really the equivalent of a piece rate. Our method of payment then is piece work for the skilled, and day work for the unskilled, it being remembered that if there is only work enough for a few, it will alwaj'^s be given to the skilled. This acts as a powerful stimulus to the unskilled, and all who have any ambition try to get into the bonus class. This cannot be too clearly borne in mind, for ive have here all the advantages of day ivork combined with those of piece ivorJc tvithout the disadvantage of either, for the day worker who has no ambition to be- come a bonus worker usually of his own ac- cord seeks work elsewhere, and our working force soon becomes composed of bonus work- ers, and day workers who are trying to be- come bonus workers. 166 WORK, WAGES, AND PROFITS CO-OPERATION. When 25 per cent, of the workers in a plant are bonus workers, they, with those who are striving to get into their chiss, control the sentiment, and a strong spirit of co- operation develops. This spirit of co-opera- tion in living up to the standards set by the experts, which is the only way a bonus can be earned, benefits the employer by the pro- duction of More work. Better work. Cheaper work. It benefits the workmen by giving them Better wages. Increased skill. Better habits of work. More pleasure and pride in their work. Not the least important of these results is the fact that the workmen take more pride in their work, for this of itself insures good work. As an instance of this pride, I have known girls working under the task system to form a society, admission to which was confined to those that could earn bonus on their work ; the workers themselves thus put- ting a premium on industry and efficiency. TILMNIXG WORKMEN TO INDUSTRY 167 The fact that we get better work, as well as quicker work, seems inconceivable to some. The reasons are: 1. — Careful inspection, for no bonus is paid unless the work is up to the standard. 2. — Work done by a prescribed method, and always in the same way. 3. — Attention needed to do high-speed work, which keeps the mind of the worker on what he is doing and soon results in excep- tional skill. The development of skilled workmen by this method is sure and rapid, and wherever the method has been properly established, the problem of securing satisfactory help has been solved. During the past few years while there has been so much talk about the "grow- ing inefficiency of labor," I have repeatedly proved the value of this method in increas- ing its efficiency, and the fact that the sys- tem works automatically, when once thor- oughly established, puts the possibility of training their oivn workmen ivithin the reach of all manufacturers. TRAINING HELP A FUNCTION" OF MANAGEMENT. Any system of management that did not make provision for obtaining proper ma- 168 WOKK, WAGES, AXD PROFITS terials to work with would be thought very lax. The day is not far dis- tant when any management that does not make provision for training the workmen it needs, will not be regarded as much bet- ter, for it is by this means only that a sys- tem of management can be made permanent. To be satisfied to draw skilled workmen from the surplus of other plants means, as a rule, that second-rate men only are wanted, and indicates a lack of appreciation of the value of well-trained, capable men. The fact that few plants only have established methods of training workmen does not necessarily mean that the managers are satisfied with that con- dition, but rather that they know of no train- ing system that can be satisfactorily oper- ated in their plants, and as questions are sure to be asked about the method of intro- ducing this system, a few words on that sub- ject may not be amiss, it being borne in mind that the changing of a system of man^ge- ment is a very serious matter, and cannot he done by a busy superintendent in Ms spare time. METHOD OF INTEODUCTION". In order to set tasks, we must know before- hand what work is to be done, and who is to TRAINING WORKMEN TO INDUSTRY 169 do it. In order to pay a bonus, we must know after the work is done whether it was done exactly as specified. Hence our first care in starting to introduce this method is to provide means for assigning tasks to the workmen, and means for obtaining such a complete set of returns as will show just what each man has done. When this much has been introduced, the output of a plant is always increased and the cost of manufac- ture reduced. The next step is to separate such of the work as is standard, or can be readily made standard, from the more miscellaneous work, and to set tasks for the standard work. Then we begin to standardize, and as fast as pos- sible reduce the expert and increase the rou- tine work. The effort to classify and stand- ardize expert knowledge is most helpful to the experts themselves, and in a short time they begin to realize that they can use their knowledge far more efficiently than they ever dreamed. As soon as work has been standardized, it can be intelligently planned and scheduled, each workman being given his specific task, for which he is paid a bonus when it is done in the manner and time specified. As bonus 170 WORK, WAGES, AND PROFITS is paid only on the written statement of the inspector that the whole task has been prop- erly done, failure to earn a bonus indicates that our plans have not been carried out. An investigation of every case of lost bonus keeps the management closely in touch with the progress of the work, and as the workmen are ever ready to help disclose and remove the obstacles that prevent their earn- ing their bonus, the managing problem is greatly simplified; for, as one of my co- workers has very aptly put it, ''the frictional lag due to the inertia of the ivorlcman is changed hy the honus into an acceleration." With increase in the number of bonus workers, this force of acceleration increases, and not only does the careless worker, who by his bad work prevents some other from earning his bonus, fall into disfavor, but the foreman or superintendent who is lax in his duty finds his short-comings constantly brought before him by the man whose duty it is to investigate all cases of lost bonus. MORAL TEAINING. The fact that under this system, every- body, high and low, is forced by his co- workers to do his duty (for some one else al- TRAINING WORKMEN TO INDUSTRY 171 ways suffers when he fails) acts as a strong moral tonic to the community, and many whose ideas of truth and honesty are vague find habits of truth and honesty forced upon them. This is the case with those in high authority, as well as those in humble posi- tions, and the man highest in authority finds that he also must conform to laws, if he wishes the proper co-operation of those under him. FIXING HABITS OF INDUSTRY Chapter IX FIXING HABITS OF INDUSTEY T HAVE done much to train and educate workmen, and consequently have seen the far-reaching results that would follow if manufacturers in general would adopt a policy of educating and training the work- men they need. The preceding chapter on ''Training Workmen in Habits of Industry and Co-operation" defines the general ad- vantages of such a policy. In this chapter I shall give specific examples of what has been done. In 1905 I was engaged by a cotton mill to take up the question of making their labor more efficient, but as they were very con- servative people we proceeded slowly. The superintendent and foremen were most of them English or Scotch, who were satisfied that the way they had done things in the old country was all right, and they objected to any change. The work proceeded very slowly indeed, but we gradually succeeded in getting our time and record system estab- 175 176 WORK^ WAGES, AND PROFITS lished and then a reliable cost system soon followed. We were, however, unable to do anything for a long time that had any great effect on the work itself, and after we had succeeded in getting the cost system in oper- ation I told the treasurer that we had done about all that was possible under the condi- tions existing. The little that had been done, however, was so beneficial that in April, 1908, the treasurer asked me to come and finish up the job, saying that he now had a new superintendent who was in sympathy with the work, and that the worst foremen were gone. During the year or more within which I had not visited the mill, attempts had been made to extend the work already started, but, from lack of experience on the part of those engaged in it, practically no progress had been made. When I took it up again my instructions were carried out conscientiously, and men de- tailed for the work were kept on it continu- ously. Twelve new looms had recently been in- stalled in the weave room, and as soon as a competent man could be got we began to study how to run these looms most efficiently. FIXING HABITS OF INDUSTRY 177 A pick counter was put on each loom, and the best weaver in the room (a Pole named Sam- tak) was given four of them to run. A trained observer with a stop-watch stood by the weaver and studied all his motions in detail. He learned how this skilful weaver stopped and started his loom, how he re- moved the empty bobbin from the shuttle and put a new one in, how he tied the knot. From these observations he found out how much time it was necessary for the loom to be stopped in a day, and consequently what proportion of the time it should be actually weaving. No time was allowed for *4oom out of order," or ''no filling," or any other cause that might be eliminated. Steps were taken to be sure that the loom was in good order and that proper filling should always be on hand, and a task was set on the suppo- sition that all removable obstacles would be removed. This task was fixed as the number of picks the loom should throw provided these unnecessary delays were eliminated, and a substantial bonus was offered for its accomplishment. It was expressed as a per- centage of the total number of picks the loom would throw if it ran constantly all day with- out any stop. It is interesting to note that 178 WORK, WAGES, AND PROFITS the task was greater than the best weaver had been able to accomplish regularly before we had made special provision to remove the obstacles. Having decided upon the task, three of the next best weavers in the room were chosen to do it and Samtak was the in- structor to teach them how. The three men chosen are those whose names are at the top of Chart II (facing page 182). They were all Greeks, speaking almost no English. The instructor, Samtak, is a Pole, whose English is not very good, and who could make himself intelligible to the Greeks only by signs. The first man, Papa- dimitri,* declined to work under instructions and on task work. He was not discharged but allowed to work his own way until he should see where his interest lay. We there- fore had Samtak give all of his attention to the other two, our observer, who had studied Samtak 's work, being constantly on hand keeping a record of the number of picks each loom threw per hour, and removing the ob- stacles to the men's performing the task. Both men failed to earn a bonus on the first day — this is shown by the red mark — ^but on the next two days they came so near it that * Papadimitri is now (April, 1913) conducting a training school for weavers in the same mill. FIXING HABITS OF INDUSTRY 179 it was allowed them, and they got a black mark. Our observer, however, satisfied himself that failure to perform the task was due to the fact that the warps and filling were not coming in a satisfactory manner, and that some of the looms were not just right. He accordingly ceased for a time to urge the men to perform the task, and devoted his at- tention to getting things in such a condition that these obstacles would be removed. The black cross shows that the men were on day work and were making no special effort to perform a task. At the end of eleven days our observer felt that conditions were all right and he started the men again. Papa- dimitri by this time had concluded that we were going to ''play fair" and wanted to start too. The black lines on the chart show how soon all began to make their bonus pretty regularly. It was necessary, hoivever, for our ob- server to he constantly on hand and to keep a record of their work hour by hour, for he would frequently find some loom falling be- hind, which, if not looked after, would cause the weaver to lose his bonus. Whenever he found a loom not doing all it should he called 180 WORK, WAGES, AND PROFITS Samtak's attention to it, with the result that the cause was soon discovered and removed ; but Samtak seldom at first noticed a lagging loom. Again, Samtak was at first very slow at making any complaint if anything was wrong, but the example of our instructor and the incentive of a bonus of 6 cents for each weaver who made his bonus, and 10 cents each if all made bonus, gradually taught him to look out for their interests and his own. It took the entire time of our observer for several weeks to get the conditions such that no obstacle would arise which Samtak could not remove. It must be remembered that while Samtak was a good weaver, he was not a teacher. He had in the past been trained not to object when things went wrong, but to do the best he could without complaining. Even with the example of the instructor and the incentive of a bonus, it was some time before he realized that we really intended that he should assert himself. We began to study the looms about the first of June, and started the first task workers early in July, but it was nearly the middle of August before we were ready to start others on task work. By this time other weavers were willing to try, but it required FIXING HABITS OF INDUSTRY 181 the attention of both Samtak and our ob- server to get these men going right. It took the first two of these men about three weeks to become skilful enough to do the task, but the third, fourth and fifth did it from the start. During September and October several more gradually became proficient. By this time we had gotten all of the best weavers on task work, and henceforth we had to train the poorer ones, which partially accounts for the sudden increase of red marks. Another cause for this increase was the fact that several trained weavers left. They had not yet become convinced that we were going to treat them fairly, and left for some insignificant cause. The dropping out of these men shows the importance of time in doing this work. Until the workmen be- come thoroughly satisfied through their own experience that the job they have is the best one they can get, they may be stampeded by a very slight cause. Our gang had now become too large for Samtak, whose allotment was twelve weav- ers ; and we started another gang, placing in charge of it the weaver Shea, whose name indicates his nationality. He was the only bonus weaver who could speak English. 182 WORK, WAGES^ AND PROFITS While there are some exceptions the chart has a tendency to become blacker slowly as time progresses. Chart III* shows the record of Samtak's gang from March 1 to October 9, 1909. This chart distinctly blackens as time progresses. This means more than that the men have ac- quired the skill to do the work. They have acquired the habit of working steadily and keeping their attention on their work. The red crosses signifying absence are notably lessened. These men have not only improved in skill, but in habits of industry; and the gang boss Samtak is not their driver, but their helper and friend. The blackening of the chart signifies not only that more work is done, but that it is done better, for hlach means that both quantity and quality are up to the standard. There is one man in the group whose history is worth studying, namely the weaver Samtak, brother of the gang boss. Note that he began on this work on September 21, 1908. He was a good weaver who had been working in the mill off and on for several years. His temper is such that he was liable to leave on the slightest pretext, but in a few weeks or months he * Chart III is placed below Chart II, on the same sheet, facing this page. r ■AK WeA\'BRS Joly FIXING HABITS OF INDUSTRY 183 would come back for a job, probably having left his new job for some similar slight cause. He would not do task work at first, al- though offered a chance, but took hold when he found others profiting from it. The old habit, however, of quitting on a slight pre- text was still on him, and he left before Christmas. By the first of the year he was back, but he had lost his ability to make his bonus, and he spent nearly two weeks before he earned it a single time. Note also that he was absent three days in the first two weeks. Was he again looking for another job? His actions during this time indicate an unsettled frame of mind. Again in the latter part of February the wanderlust came over him. Early in May he again had a slight attack, possibly of "spring fever." Since that time he seems to be entirely cured of his roving tendencies. ^ We knew this man and understood his moods, and we know what kind of a change has taken place. Have not many others been influenced in the same manner? In considering this work an important ele- ment to be noted is the time needed. When we began our study in June, 1908, we already had in operation means for learning how long 184 WORK, WAGES, AND PROFITS eacli worker spent on every job and how mucli work was done. There was also in existence a system of laying out the work from the office. In other words, the general mechan- ism of our system was in operation and work- ing smoothly, yet it was several months be- fore we got enough task work going to make any real show^ If we had attempted to in- troduce it much faster we should have met with two difficulties. First, it would have been impossible for us to remove all the ob- stacles for a large number of weavers. Sec- ond, the poor weavers would probably have persuaded the good ones not to try to do as we wished. The best evidence of this is that Papadimitri, one of the very best weavers, declined to do the work at first. Time is needed to overcome prejudice and to change habits. This is a psychological law, and its violation produces failure, just as surely as the violation of the laws of phys- ics or chemistry. Chart IV * represents our progress in training workers to do their task in winding weaving bobbins — bobbins of filling that go into the shuttles. Each operative tends a number of spindles, and the work consists * Chart IV is inserted between pages 186 and 187. FIXING HABITS OF INDUSTRY 185 first of taking out full bobbins and putting empty ones in place ; second, removing empty- spools from which the yarn has been taken, and replacing them with full spools. Inas- much as the machine runs at a constant speed, the bobbins fill and the spools empty more rapidly with coarse yarn than with fine ; hence it was necessary to make a careful de- tail study of the subject to set a proper task for different sizes of yarn. This study took about six weeks, and, having settled upon proper tasks, we started a girl named Wag- ner on task work early in February. She would not do it at first but stayed home for a week. At the end of that time she camft to work willing to do as we wished, and was evidently surprised at the ease with which she succeeded. On March 1 we began to keep the charts. At that time those doing the task as shown by the chart represented but a small proportion of the whole number of workers. Our gang boss, McCabe, received 5 cents for each worker that made a bonus and 10 cents each if all made it. Our observer was con- stantly on hand, at first to help him remove obstacles, and to see that the workers had every opportunity to work efficiently. In spite of this a large proportion of the first 186 WOEK, WAGES, AND PROFITS ones failed to earn tlie bonus regularly and gradually left. Many of these were girls who evidently found continuous attention to their work irksome, and, even though they were capable of doing the work, preferred the more free and easy method to which they had been accustomed. Others showed but little ability to do the work or to learn. The fact, however, which is evident from the chart — that the larger the number of bonus work- ers in the mill, the faster the new ones learned — is a matter of great psychological importance. There is in every workroom a fashion, a habit of work, and the new worker follows that fashion, for it isn't respectable not to. The man or woman who ignores fash- ion does not get much pleasure from associ- ating with those that follow it, and the new member consequently tries to fall in with the sentiment of the community. Our chart shows that the stronger the sentiment in favor of industry is, the harder the new mem- ber tries and the sooner he succeeds. We must therefore make our compensation such as to encourage the habit, or fashion, of in- dustry; and our charts show to what extent we have succeeded in fixing this habit. It is interesting to note that although fail- Filling Winders pi FIXING HABITS OF INDUSTRY 187 ures most frequently occurred on Monday, even this habit could be cured. The mill shut down for about three days about July 4 to take stock, and, as we had just gotten this room in good shape, that little vacation may be used as a dividing line on this chart. Remembering that solid black indicates that the full amount of work has been done, and that all of it was up to stand- ard for quality, while solid red represents that the work was below standard either for quantity or quality, and sometimes for both ; also that the black cross means the worker was doing day work, while the red cross means that the worker was absent, the amount of black on any day is a measure of efficiency for that day and the red is a very accurate measure of the amount of super- vision needed, for all cases of failure to per- form the task must be investigated, and all cases of absenteeism should be inquired into. The gradual change of the chart from red to black means not only that the workers are becoming more skilful and regular in their habits, but that the machinery is being kept in better order, for the task is so set that unless the machines are in good condition the bonus cannot be earned. 188 WORK, WAGES, AND PROFITS After July 4, not only was the amount of supervision needed diminished and a regular output maintained, but the workmen were much more regular in attendance. The in- dications of the chart are that the output of the room after July 4 was larger, better and more uniform. It is now easy to predict the daily output and to make promises of deliv- ery that will be kept without special effort on the part of the foreman. Before July 4 such predictions were only estimates, and a proper output was kept up only by constant supervision. As the gang boss in this room gets a bonus of 5 cents for each worker who earns a bonus, and 10 cents each if all earn bonus, it is easy to see that the superinten- dent does not have to worry much either about the quantity or quality of the product. It is easy to measure the quantity, and the quality is taken care of more easily still, for the weaver who gets poor bobbins refuses to use them. By permission of the treasurer of this mill I am enabled to show Chart V representing the conditions in this room in 1912, three years later. The preponderance and continu- ity on this chart of black spaces showing task performed is very marked. FIXING HABITS OF INDUSTRY 189 No. Sept. Oct. Nov. 1912 28 28S0 57 12 14 19 2126 28 24 9U16 1B2S 631 641 642 643 649 661 662 654 666 658 659 661 665 666 667 669 670 671 677 676 616 ■■■■■■ ■■■■■■■■■■■■ uniiHiui Hnii ■■■■■■■■■■■■ ■■■■■■ ■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■IMnnHBi ■■■■■■■■■■■• ■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■iMi»nniHnHHi|n ■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■iilH ■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■III ■■■■■■■■■■■■■■■^■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■i ■■■■■■■■■■■■ ■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■I ■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■ ■■■■■■■■■■HMBHliinHIHI|l|HIMIMHIIIMH ■■■■■■ ■■■■■■ ■■■■■■ ■■■■■■ ■■■■■■■■■■■■ ■■■■■■■■■■■■■■■■■■■■■pu ■■■■■■■■■■■■■■■■■■■■■■■il»HI»BIHifH»l»B»IHBI||l ■■■■■■■■■■■■■■■■■■■HMIHIIMIHIIinHIIIIHIlliMm ■■■■■■■■■■■MBBWi|aiHI*HMH»a»l*i|HI|HH|pii|ll jPHMI ■■■■■■ ■■■■■■ ■■■■■■ ■■■»■ ^jPM~ CHART V. BONUS RECORD, THREE YEARS LATER, OF FILLING winders' DEPARTMENT SHOWN IN CHART IV Chart VI* (facing page 190) represents girls winding yarn on spools. Note that it was the fashion among these not to try for the bonus on Saturday, Most of them could earn it every day if they chose, but there was evidently a feeling against working hard on Saturday. * Charts VI and VII, on one sheet, are inserted be- tween pages 190 and 191. 190 WORK, WAGES, AND PROFITS Note that on March 6 two girls tried to break this precedent, but it was too strong, and on March 13 all failed. On March 20 an- other tried. On March 27 one of the first two tried again, but after that all gave it up for three weeks. Then our first two evidently decided that they would defy public opinion, which they did pretty successfully until June 6, when apparently by common consent all "took it easy." After that, however, all gradually fell into line and the Saturday in- efficiency disappeared as did the Monday inefficiency on Chart IV. Chart VII * represents girls inspecting cloth and mending slight defects in weaving, trimming ends, etc. This is high-grade work and all defects must be eliminated. We started the task after careful study, and while most of the girls showed the ability to perform the task only two did it with any de- gree of regularity. On April 7 three left be- cause they were unwilling to maintain the high standard of quality that had been set. The chart shows the difficulty of getting new ones to do the work. Fortunately the three dissatisfied ones came back for their jobs in a few days, and soon became better than ever. * Facing this page, on lower half of sheet. c WL^I: SSSISES a&a .^^^^ mw ss o mt II MM i: ox**. III* (XXXMC 0OOC9 I ummm m SSQI ■I c FIXING HABITS OF INDUSTRY 191 These inspectors were supplied with work and had the heavy cloth handled for them by the three men whose names are at the top of the chart. Each of these men received 2 cents for each girl that made a bonus. Early in July it was decided to give the boss weaver, who has not yet been mentioned, a bonus. He is an excellent man and was undoubtedly do- ing his work well, but we felt that his bonus should depend upon the quality of the work turned out. Inasmuch as the better the cloth was when it came from the weaving room, the easier the task of the inspectors would be, we decided to make his bonus in proportion to the number of inspectors that earned theirs. The inspectors at once began to earn bonus with great regularity, for the boss weaver found that the inspectors were only too anx- ious to point out defects which it was to his interest to have corrected. He visits the in- specting room frequently during each day, and by the reports he gets keeps closely in touch with what his weavers are doing. The result is a continuous improvement in the quality of their work. The charts so far shown all refer to the same mill. It is interesting to know that in 1912 the Industrial Workers of the World 193 WORK, WAGES, AND PROFITS made an attempt to cause a strike in all of the mills in the town where this mill is situ- ated, and actually succeeded in shutting down some of these mills for several weeks. In Operatives Clara Corrioan Frances UROgan Theresa Liepebt Mary Livset F.KcrcHEN V.JUVUHA9 CLATLA CORRtGAN Prances Grog an Theresa Liepert Mary brvsEY F.KrrcHEN If.KALLABAIf KEY BBoous Earned ^onusLost X^ayWork fS&bsont CHAET VIII. BONUS RECORD OF GIRLS WORKING IN A FOLDING ROOM The upper half shows eight weeks in 1909; the lower half, the corresponding eight weeks in 1910. Remembering that red means bonus lost and black bonus earned, the improvement in twelve months becomes strikingly apparent. this mill, on which they made a very strong attack, they succeeded in drawing out only sixty out of six hundred employes, and the management had no difficulty whatever in filling all their places in a few days. Chart VIII represents girls working in the folding room of a bleachery — not one of those FIXING HABITS OF INDUSTRY 193 previously referred to — and is interesting from the fact that they belong to an entirely different class of people from those in the cotton mill (as can be seen by their names), and also from the fact that some of these girls have often as many as ten or fifteen different kinds of v/ork per day. In starting this group, which is much larger than the number shown here, we had exactly the same experience as with the weavers and the wind- ers; one of the girls declined to do as we wished at first, and afterwards became one of our best workers. These three cases il- lustrate the fact that a worker may hesitate, or even refuse to do work by a new method, and still become ultimately a good and loyal worker under the new methods. The action of a workman when brought up against a new method is largely influenced by his tem- perament, or the opinions of his friends. When, however, this method has been estab- lished, all the evidence available goes to show that these results are not only permanent, but that the workers become more proficient and the product better. This chart shows the improvement after a year's training. We began the task and bonus in November, 1908. The upper section of the chart shows how the 194 WORK, WAGES, AND PROFITS girls worked about the time the system got well started. The lower section is a record of the same girls a year later. Directing attention once more to Chart VIII, it will be noted that the date is 1909. The work was begun some time in the fall of 1908. In January, 1912, the conditions were as follows : — Three of these girls w^ere still working on the same job, on bonus. One of the three had left for a few weeks in the meantime, but came back again. One girl had been promoted to a better job. One girl had been transferred to other work and had subse- quently left. The sixth girl was working in January, 1912, but left before the end of the month. Charts IX and X represent girls at w^ork in a worsted mill. The best workers were put on bonus work first. Note their improvement. It was nearly three months before we got all on this work. Note how the poorer ones failed at first, also how on the last day shown on the chart all of the poorer workers earned bonus. During the period from April 15 to July 10, 161 girls had been put on bonus work, and 21 out of this number had for one reason or other left BONUS RECORD Gray Worsted Barling c FIXING HABITS OF INDUSTRY 195 the employ of the company. The reasons were as follows : — 4 girls — left ; poor health or dissatisfied 1 girl — married 1 girl — entered convent 1 girl — work at mountains for summer 5 girls — left town; gone home to Canada, Michigan and New York 9 girls — discharged 21 One of the obstacles, which by the way we nearly always encounter, was prominent in this case. Certain people in authority hav- ing once expressed themselves as not approv- ing of our methods, felt it their duty to op- pose their introduction to as great an extent as possible, and to use all possible arguments against the work. Their original arguments failed. The argument that we were over- working the girls was then advanced, and they insisted on being allowed to put on piece work some of this work which was in another building, and which had not yet been put on the task and bonus system. Accord- ingly, on June 19 their piece work was — N 3 i 6 o P > o ■"=•1: iriiimsaiEii: a-B-s-i-tJ- £ - ■ c ? : ■ ' ■ ^ F P ^ ifrs 5-|f '^ 2 ^1 hf 2 I=>|,; - ■ -W I- i 3 H| -'-;_■' 2 2^1 » » S <= 3 « a |Si 5 ^ ^' " ■E § " m - ^I - s:i:^:_ ^ jj^» » ■ . ■ ■■ 3 o -a o ™ K 2' 1 !.».-. S.3M;:"B=t dl 1 laiSIH^^FB lidi lidi ibRkI 1 : '. " .. 1 ■ ■ " ? ■ F S'.«Ji^.»_ S "C ■1 H 1 1 1 ° - ■ - s Mb = = 2 ^.»_ i ■ i ■ : ■ ■ { ::llliBy -. " i " SIBIBIHHI 1 1 1^1 IfHI 1 ISISIBIBKHEfl S n ' ^ Jiu n " fc h ■ ■^ « " « ^'.I'.Z'.y. yBJi.s. H - S-.S." .2.. « ^ "^F <^ -• ■nBrl ■ ■■ ISl a M ■^-i^ > ED 90 ■^ => "B" "^ ^ E *" ] = g y - !^ s^ ~i I^B ? 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" ^ ~1 : SS.2***°*'*^J ^Ji - - O r- ^ O go 2 1 f e "i r J !fiB .3 ^ds. - . tT^b ^lE. ._. ''.[sa^r nSl Itr i ^i. . : S la ■ £-ai.j9.^I a 1 9 D iH e4 CO ^ u 3 a ^ FIXING HABITS OF INDUSTRY 197 started. On July 11, the date of this report, nineteen out of a total of fifty-three girls in this building had left. In other words, al- most one-third of the girls who were put on piece work, according to the request of the man ''who had their interests most at heart," left in three weeks ! In the case of our bonus workers, approximately one-eighth of the girls left in fifteen weeks. Which system was most considerate of the workers may well be left to the reader's judgment. Chart XI represents weavers in a cotton mill. Each weaver is running twelve looms, and gets a bonus for each loom which does all the work it should do on any given day, and an additional bonus if all his looms do the full allotted amount. The number in the space represents the number of looms on which the bonus is earned. Red is used to call attention to the smaller numbers. The black spot indicates that all the looms earned bonus. On this job bonus work was started really before we were ready for it, but inasmuch as the management was very anxious to get some bonus work under way we felt it neces- sary to do what was possible to conform to 198 WORK, WAGES, AND PROFITS their wishes, knowing, however, that the work would necessarily go very slowly. It will be noted that several w^eeks elapsed after putting the first w^eaver on bonus before any others w^ere put on. This delay was necessitated by the fact that the failure of the man to make bonus w^as not always his fault, but was due to conditions over w^hich he had no control, and it took some time to eliminate these conditions as far as he was concerned. Somewhat more rapid progress was made later in putting other workers on bonus, and for a while things w^ent very w^ell. The chart show^s, however, that w^e soon attempted to go too fast, for not only did those weavers who had previously been making bonus on all looms fail to accomplish this result, but some of the weavers (new^er ones) failed to make bonus on any. These facts emphasize the importance of going slowdy and bending all our efforts to getting conditions right be- fore we make any attempt to increase the number of people on bonus. When it is realized that each of these weavers was handling twelve looms, it will be seen that w^e already had quite a proposition on our hands. Inasmuch, however, as the weavers were get- FIXING HABITS OF INDUSTRY 199 ting a fair day's pay, they showed patience and gave ns all the assistance they could in our attempt to make things go right, with the result that in a few weeks things were on a satisfactory basis again. This work was being done during the Law- rence strike, and the Industrial Workers of the World had their agents around doing what they could to stir up dissatisfaction among the employees, using, of course, any influence they could against this work. In another room in the same mill work simi- lar to this was being done in almost identi- cally the same way, when a strike took place in that room, probably stimulated by the In- dustrial Workers of the World. We had extended our system to about half the people in the room at this time, and, strange as it may seem, our workers were not the ones that went out on the strike — all of our people not only stayed on their jobs, but brought in their friends to take the place of the strikers. In another textile mill nearly all the em- ployees went on a strike in 1905; almost the only ones who remained loyal were those working on our system. Chart XII represents girls making sheets and pillow cases. The work of starting the 200 WORK, WAGES, AND PROFITS task and bonus was done by a man who had been connected with me, but who was doing this on his own responsibility. I was not per- sonally in touch with this work when it was done. First, note should be made of the fact that the factory was shut down on a number of days — November 28 (evidently Thanks- giving Day), Christmas Day, and all Wed- nesdays and Saturdays for the next two weeks. It will be seen that the work started off very well, but the rush to get people on bonus on November 30 evidently upset things, for immediately we find a number of workers back on day work. This was probably due to the inability of the task setter to set tasks on new work fast enough. Note again that just before Christmas week the same condi- tion obtained, and after Christmas there was not enough work to keep the factory running full. However, by the middle of January those that had bonus work were beginning to earn their bonus pretty regularly, and by February 10 the number of workers was just about large enough for each to be sup- plied with a full amount of work. From that time on the work went smoothly. This chart is presented to show how easy it is to get into trouble by putting people on Operator No. --; 22: 5 26 43 :> Nov. MMHi^XxX Hi MiiXxXX mjiXxXK ipxxxx ■K:< ■■ BV iH ■■;;>0< XX XXXXXXKK' •'■ ^ ES< xcx r- X Ixxxxx ixx Feb.l )«><>BxX Xxtxx>C XXX X I "It " I XXXXXX X 1.11 :z 8 46 44 36 41 20 24 18 1 : z = = = E SI X X ■ I - X X ■ 1 X X ■ ■ X X i XOCXXK xxxxxx xxxxxx xxxxxx >c>x X>C XX >C< XK X XX BX XX XX X : IXX XX x»< ■■■^^LIJZ x>c>o< xyxoo< XX P m p I >1). Mar, 1 28 kXxXxjx i: a 'ooomm 2fW =r :- r : q p 3 F : = r = : : 3 ^ :zi ^ J: 3 □ ^ ^ = i: ^ 21 EE 1 ^ w E EE E E E ^ E E E E E EE: ;e EE ^^ E E l^ EE E E EE s L 3 ! ■ E EE E : E E E E E E E E ee; :e 11 EE E E ^^ EE E E l^ 26 ■ ■ ■ 1 ^ [m ■ ■ u ■3 I I ;z : : z ~ : z z E : z :z: :z zz ZZ z : zz zz : z zz 1 4E 44 36 5 ■ 5? 1 1 I 1 1 1 I I E ■ E 1 E IZ z : : - zz _ z :z: :z zz zz z z zz li E E EE 20 24 5 ■ ■ m m m ■ ■ ■ ■ ■ ■ ■ d ■ ■ JWL 1 ■ rr I - ■ ffl ■ = EE E E E E E z E E E E g 1 ^ ^ E E ^ ^ E »i i r PEaiSEVERANCE. c FIXING HABITS OF INDUSTEY 201 bonus work too fast. The management has its part to play in supplying work and train- ing workers, and it is perfectly evident in this chart that the trouble was not with the workers, but with lack of proper balance in the managing department. This, however, is not at all surprising, for when the man re- sponsible for the output finds the advantage he can obtain by the task and bonus system, he almost invariably insists on putting as many people on bonus as possible, with the result that he finds he cannot supply all the workers properly and that numbers of them have to be put back on day work. It may be asked why the task-setter does not explain this to the superintendent, and make it clear that that is the wrong way to do. I can say only that no amount of ex- planation on my part, or that of my repre- sentatives, seems to have much effect, and we have about come to the conclusion that the best way to do is to let managers make their mistakes and find them out; then the question is settled once and for all time. Chart XIII is a particularly interesting one, inasmuch as it is the most recent — the development is still going on. I am permit- ted to exhibit this by the manager's courtesy. 302 WORK, WAGES, AND PROFITS It will be seen that here also the work started off very well, and until we began to push it too fast everything went all right. When, however, the desire to get an in- creased output overcame the conservatism with which it is necessary to establish a new method, those workers who were last put on influenced the others not to perform the task, and on one day nobody made bonus. One girl, however, felt that she needed the money and continued on with the work. The others showed their hostility toward her in a num- ber of ways, but she still persisted. After they had ceased to try to do the work for three or four days, several of the girls sent in their notice that they were going to quit. They were evidently trying to raise an issue, but inasmuch as the management ignored the issue, and went about its business of getting conditions so perfect that the workers could have no cause whatever for not trying to earn their bonus, they were unable to get the issue accepted. It will be noted how at the end of eight days some of the girls became willing to try again, and from that time on the num- ber increased, and soon the number of appli- cations from other girls to work on task and bonus became so great that we were unable FIXING HABITS OF INDUSTRY 203 for some time to provide proper conditions and to set tasks for them fast enough. CO-OPERATION A careful analysis will show that we have established a system of co-operation, in which it is to the interest of each bonus worker to do as much work as he can, and to do it as well as possible. Further, if a workman does poor work, others suffer beside himself, with the result that he either learns to do good work or finds work elsewhere. As it is to the interest of the worker to do good work, and plenty of it, he contracts the habit -of doing a large amount of good work. As long as it is to his financial interest he will con- tinue to cultivate this habit. Taking all of these charts together we note the following: That the amount of super- vision needed has diminished ; that the qual- ity of the work is better ; that the quantity is greater; that the amount being turned out can be predicted accurately, and hence prom- ises need no longer be guesses, but can be made and kept ; that the workers are not only earning more money, but are acquiring bet- ter habits of work which will make them bet- ter citizens. RESULTS Chapter X EESULTS A FTER seeing the charts in the preceding -^^ chapter, the question naturally arises as to the ratio between the amount which is being accomplished now and what was ac- complished previous to the beginning of this work. In order to make these comparisons clear we devised a few years ago what we have called a "Percentage Chart," which com- pares all results with the conditions existing before the work was started. For instance, the standard production was called 100 per cent. Our new production may be two, three or four times that amount. The wages which were being paid before the work was started were also rated at 100 per cent. The new wages w^ould be an increase over the old standard, usually of 30 to 50 per cent, and the wage cost measured in the same manner would be distinctly below the previous wage cost. Chart XIV is a chart of this chara^jter and 207 v a / f aa;iJog / 1 \ \ - iai^sn t <2 O 3 a 3 Pi ~ Snjuoqqi'a ~~ " - ■■ ■ - . / / Sojljona / / o 9uiJadC(j ^^ *" ^ <» a s \ Sujijno ., — - - ■■ r 1 \ Snippj Tioog ■* -■. ■B / / aoipiOi aaoi J. S o Id CD a 03 o Id a SmsBSi,] S L STljdaiais ^ -» ^' '' p •■p / / Snipioj ^ s fc 1 I / aniqooH / ^ tt \ k Suiiqnod o \ g a) ^/ 3nij3pu3jB3 5 i cu z; to anipniM n ^ / f anrj^tasx ,- ^ - f 1 \ •^ SmiSnoM

Sl50 Ij &f ^ > 'f-( w / \\ \ / ^, ^ 1 r H^-^- ir—.-Wages^i^- ■"'~rT r u J r' - w ^ xtI _vl[ag '1 \ 100 —M ^_ ~ — Old Pi odiiction Wages and V Va se Oost ^ 1.. ^.J^C OR f ^'^ V •v oUr 50 '^ \ f/ "%y — '*« ,. •« s^ /^ \ ^_ t \ L CHAilT XV. WAGES AND PRODUCTION DIAGRAM ON SMALL AUTOMATIC SCREW-MACHINE WORK No better testimonial both to the quality of the work done and the economy with which it is being done can be had than the fact that, notwithstanding the increased output per ma- chine, they have been obliged to add other machines to the dye works to take care of the business offered, until they were doing in this department in 1910 nearly three times what they did in 1908. Chart XV represents similar results for work on small automatic screw-machines. In this case the light line represents the task, JOBS CHART XVI. WAGES AND PRODUCTION DIAGRAM ON LARGE AUTOMATIC MACHINE WORK 214 RESULTS 215 the upper heavy line representing the amount of work done. The upper dashed line repre- sents the wages now being received, and the lower dashed line represents the new wage cost. In this particular case the shop was very well run before we undertook to study the work, and the workmen were getting very good wages. It will be seen that the increase in production is not quite so high as in the former chart, nor is the increase in wages quite so great. Chart XVI shows similar results for large automatic machines. Chart XVII represents the same change for miscellaneous machine-work in a plant manufacturing a small article in quantities. Comparing all four of these charts, it will be evident that there is a very striking simi- larity whether we are doing hand work in a bleachery, or automatic lathe work in a ma- chine shop. If the management assumes its share of responsibility in preparing the work, in seeing that the machines are in proper condition, and in training the work- men, we can get from two to three times as much work done as is usually done, pay 20 to 50 per cent increase in wages, and still save about 40 per cent in wage cost. 216 WORK^ WAGES, AND PROFITS Of course it will be realized that this in- crease in output brings down the overhead expense on every unit of product, so that the decrease in wage cost is not the only impor- tant item. Indeed, it is not even the most im- portant. Unless the total overhead expense is markedly increased when the product is increased, this expense per unit of product comes down substantially in inverse ratio to the amount by which the product goes up. The reduction in cost from this source is usually markedly greater in dollars and cents than the reduction in wage cost. This side of the cost question has usually been given too little consideration. Mr. Andrew Carne- gie was among the first men in the United States to recognize the great value of getting a larger product from his plants, and this fact, perhaps more than any other, gave him the mastery of the steel business. Many times we can afford to pay even a higher wage per piece if thereby we can reduce this overhead expense. In general, however, a thorough study of the work enables us to reduce both wage cost and overhead expense per unit of product, at the same time sub- stantially increasing the earnings of the workman. RESULTS 317 On Chart XVII some reader may note at once the discrepancy between the task set and the amount of work performed in cer- tain cases, showing that the workman did a great deal more than it was expected he &< n a 600 SOO u400 3300 100 a ^ a fl H a •H A a M 1 w 6 a a Fl 0. C3 13 u w H •a a ■3 d O 0. C3 a O o '3 "a <3 o PS C£ ^Hli4 HQ QHoli^lii^^iiiaipH — „ s "c?! 1 i 7 If y n \ li \ ^ J // it \ \ 1 if 1 \ \ -^ 1^ — \ \ 1 i \ji f iB — / ,L'Tt / h:f\ / '\ *■»/ — — /y -ii^ __ 4 , I^ ~ ^ t^ i\ FV ^ t s ^ -^ — ^ r^ =\/- — ^^ '■'< ^ 'rtPl ZJ'^ ^V > ^.» ^ J.*" ^c^*"?,. .»7 N '^ r \j\a froauctron^ We ;gesr vv age~ Uosf^x ^ . 4 "* p* -^i5>^ ^'t"^ ^- y / \ y<^ V -^ cos- s ^— ' \ \ T^Y ^ O P 1 2 W H t3 i M z O r ■a '■'& Z C 2 2 c > Z > z 2 > 2 -4 2 C 5 Z > U g 53 s is s s r, s tt- E s - O 'i - = ^ to to ,:: * -J c <. - ^ ,-4 - - 00 «. .u. ft - - ^0 ^ - C c - ^ ^-0 H » c s, c. - f - CO to ? » ro to i to«?: o= -0 .e. 1 - - - - - - c a. - tf^ :: o » - a. c;. |C>' - ? y» -J CO CD CO w «, CC .7 <^ CO f 2 « 1 Si urs) s- > £ S 3 4^ -^ o iCk -.1 w ^ s CO t C ^. to - - -- - ►= ~ to - 1 S to O to a 35 ^ !3 o o ec - c^ ^ CO t kJ « ^ ►- - . w - to ,- 1 s " o ^ 1 33 ;; o CC 00 a. ttk CO - t N ■= K= ^ - 2 » - I ^ •c^ A 00 O lU to « - s •4 « lO - CO CJ . - :: 'i 0= o. •u c H - tC^ CO E. en - i(> to 1 e 2 n ■s 5 po 13 > > g M tfl 1 a -J Ct! H - - - ^ ;; ,o K, 'J O c» " •b ^ IS s" X -0 => c u . to H 273 274 WORK, WAGES, AND PROFITS on each of which are entered in the proper column the number of pieces made that day and the total number made to that date. Each column is crossed by two heavy red lines, the upper one opposite the date at which the work should be begun, and the lower one opposite the date at which the work should be completed. These lines have been very appropriately named ''danger lines." The positions of the entries with reference to these danger lines, and the amounts of those entries, show to what ex- tent the schedule is being lived up to. If the schedule is being well followed the entries are always in the neighborhood of the red lines, or above them. Figure 22 represents a portion of an actual order showing how it was filled in the foun- dry of the Schenectady Locomotive Works. If there is no graphical check on the opera- tions of the foundry, the work that is wanted during a certain week may be spread over three or four; such is often the case, as our records show. It is an extremely difficult matter for a foreman to get the work done exactly in the order it is wanted. For instance, if we are building two locomotives per day, each re- A PRACTICAL EXAMPLE 275 quiring four driving boxes, it seems an ex- tremely difficult thing for him to get every clay, without fail, at least eight driving boxes. Why this is so is a psychological question, and I can't explain it, but that it is a fact is too well known to admit of discussion. There is a constant tendency when he is rushed with other work to drop to six or seven, with a corresponding decrease in output of locomo- tives. This tendency to give about what is wanted rather than exactly what is wanted is the most common obstacle to getting the full output of a plant. A DAILY BALANCE AS A PERMANENT EECORD This balance sheet shows not only how much work was done each day, but is a per- manent record of exactly how the order was filled, which can be compared with the record of the previous orders and is of great value in planning subsequent orders. This is best illustrated by Figure 22, which shows exactly where failure to comply with the schedule oc- curred. The letter ''P" entered in some of the columns shows graphically the reason for the castings being behind. The pattern was not received until the date indicated. Simi- lar sheets would probably show that it was z r "3 z: &, o a w '*^ a -« si § is t» o H U z a H (^ t/! o l-l H O p Q O C4 Oi d Q 03 22 S s ---E S JJJ gl s 1 --,B- m: !?> S a 2 J - tI »i> ~2- - 1 a i -f'l ri-es-nr .1 2 g 1.^ «<>=^2il;i^ - - X s 3 Mf o-iN — ?^^ S O H H O O s 1 "2- jdj^S f 1 1 ±|..- t - - - ^ - - - - - a S 2 g 1 ^ " ^ ^ CC a C6 5 2 -0 3 2 1 ^ - ' ' r. " ^ - '^ '4 < H i 2 g -- fg =2 - iT II ? ro-- '■' c- -- ' '■ o a S < ■W aiO T - 11 i - -- CO - 1 a b 12 5 « - if 1' fi 5 c c- f -| CMr- < o z Dt-* r z 3 o X Z < r Z u z o ? g 1 edo: ? 55c - h oi-: ^ ti =p 2 X ^ 2 S s ?3 fS N cc EX ' o w ►J ^ P5 Q CO a CM r^ H < M K tJ tH h ^ w 'A 277 278 WORK, WAGES, AND PROFITS the draftsman and not the pattern maker who was to blame. A MACHINE-SHOP BALANCE AND SCHEDULE Figure 23 is a similar balance sheet for work done in a machine shop on a series of locomotive frames and rails. The order in which the various operations are to be per- formed has been determined, and the consec- utive columns are devoted to the operations in their proper order. It will be noted on this sheet, which is an actual record of work, that the consecutive operations were per- formed promptly and that there was no seri- ous delay. Figure 24 represents a record of the same work as it would appear if the works were short of frame-drilling capacity, and the drilling of frames were not done promptly. If it is impossible to make up the delay thus caused the output is limited by it. Such sheets show at a glance where the delays oc- cur, and indicate what must have our atten- tion in order to keep up the proper output. If the delay is always on the same operation we know that we must either get more output from the machine doing that work, or get more machines. A PRACTICAL EXAMPLE 279 A GKAPHICAL BALANCE AS A HISTORY A complete set of such sheets for all the work in a plant gives a complete schedule and a daily record of what is being done, and is of the greatest possible advantage if an attempt is to be made to improve the condi- tions or increase the output of the plant. In fact, if the improvement in the operation of a plant is to be made in a scientific manner, exact knowledge of what is taking place each day is absolutely necessary. Without it, money is often spent wastefully, and but a small proportion of the desired results ob- tained. In large plants run without such a system of balances it is frequently impossible to tell just what is holding back the output. In a case of this kind the value of such a bal- ance is out of all proportion to the cost of obtaining it. By using the graphical form its value is very much increased, for the general appearance of the sheet is sufficient to tell how closely the schedule is being lived up to. Moreover, such a balance is a history of the way the work went through the shop and is readily comparable with similar work done previously or subsequently, thus enabling us to form a definite idea as to whether the plant is being run more or less efficiently. 280 WORK^ WAGES, AND PROFITS This balance of work, or schedule, sheet then gives us a daily analysis of how the work is progressing, and in its graphical form is so easily read that superintendents find it of great value. The man's record shows the efficiency of each man, and the two taken to- gether give us the knowledge, in the clearest way, of what should be done to increase our output. VALUE OF MAN EECOKD AND BALANCE NOT DE- PENDENT UPON METHOD OF COMPENSATION It is not the intention to discuss the mak- ing of schedules for doing work, or the sub- ject of compensation for work done, for the keeping of a daily balance of work done and a record of the men doing it are invaluable, no matter what the method of compensation. In fact, I have found the man's record when work was done by the day to be of the high- est value, for when men realize that not only their chance for increase of wages, but that of holding their positions, depends upon the amount and quality of their work, they be- come very much more efficient. Add to this the fact that efficient men, paid in proportion to their efficiency, are invariably better satis- fied than less efficient, cheaper men, and we A PRACTICAL EXAMPLE 281 have an added reason for keeping the man's record. Again, a workman easily forgets how many days he has been absent, and how much poor work he has done, and an occa- sional glance at his record often does him a great deal of good. I first kept such a rec- ord in the foundry of the Midvale Steel Com- pany over twenty years ago, and found it so valuable that I have always done it since when possible. The question is frequently asked as to the cost of keeping these records and balances. In reply I have to say that if such cost were ten times what it is, it would cut no figure. In day work we buy a man's time, and he frequently gives but little else. Our store- keeper checks exactly the materials we buy, but nobody knows exactly what the day work- man has done in the hours paid for. Although we know labor to be the most difficult com- modity we have to buy, we give it the least systematic study, and any effort to get an exact record of what we get for our money is the first step toward purchasing it in an in- telligent manner. With regard to the balance of work, I can only say that it is hard to esti- mate the cost of lack of harmony in a plant, and the increase of efficiency produced by get- 283 WORK, WAGES, AND PROFITS IN OUT . ORDER NO. MAN'S No.' Win MAN'S NAME DRAWING Np. STMBOL TIMC ALLOWED TIME • TAKEN MAOHINE NO. BONUS RATE BONUS LABOR PAY FOR WAGES OESCRIPTION OF WORK OPVL HO. OF '^^' WAAM * ENTEREO IN 1 HAVX INSPtCTeO THE WORK RClPRESENTED 8YTHC ASOVC ENTRIES 1 NO BELIEVE THEM BOTH TO BE CORRECf. ►•r B«E£T KCOM at NC BOSS DM8 n* an^fnterini JCoffOifM FIG. 25. TIME CARD FOR A MACHI.NE SHOP ting materials in their proper order rather than according to the judgment of the vari- ous foremen is greater than is usually realized. The value of a balance of some sort is too well understood to need discussion, and the only reason that it has not been adopted is often the fancied cost of getting it. As a matter of fact all I have suggested is so closely allied to the time and cost keeping A PRACTICAL EXAMPLE 283 that when all are done together by the best modern method the cost is not great, al- though it does cost money to change from one system to another, and the systems in general nse are not at all suitable for this purpose. The method referred to is the "time and production card" system, under which a man usually receives for each job a card which is stamped w^ith the time of issu- ing and of returning. REO-n ISS'O OHARQE SYMBOL OPER«,VES p ^ OPERATIVE'S NAME MACHINE NO. TIME ALLOWED TIME TAKEN OPERATION BONUS RATE CLOCK READING FIRST PAY rOR WAGES LAST IF V^ORKINC ON BONUS CROSS OUT THIS (C LABOR DIFFERENCE IF WORKING ON LABOR CROSS OUT THIS 03" BONUS YARDS DETAIL OF WORK ON BACK ENTERED IN TH BE ■ HAVE INSPECTED THE WORK REPRESENTED BY ABOVE ENTRIES AND BELIEVE THEM BOTH TO COnHECT. SIGNED BY '""• MKcono * PAT ,";.% f] EPARTMENT D 4 ca" o Ttui Engineering Aoyutn* FIG. 26. TIME CAUD USED IN A BLEACHEKY 284 A PRACTICAL EXAMPLE 285 Figures 25 and 26 on pages 282 and 283 are examples of time cards. These sample cards are stamped with the time work begins and are taken from a card rack, Figure 27, as the men come in at the beginning of the work period. If it is desired to know the time on different operations, the cards are returned to the time keeper at the end of such operations and stamped with the time. A fresh card stamped at the same time is given to the workman. At the end of the work period the workmen place their cards in the rack as they go out. TIME AND man's RECORD In order to get a record of the man's time and work for the day, all the cards bearing his number must be gotten together. If these do not give a total of the full number of work- ing hours, the first card of the day must show that he was late, or there must be a pass stat- ing the time he went out. These passes should be of the same size as the cards, and be put in with the time cards and sorted out by the man's number, so that when the clerk begins to enter the time and record he will have all the necessary information for this purpose at hand. 386 WORK, WAGES, AND PROFITS COST To get the cost on an order the cards are then sorted by ''order number" and when the clerk begins to enter up the time or wages against any order, he should have before him all the cards representing work on that order. He is thus enabled to make the final entry directly from the cards, thus doing the work with a minimum of clerical labor. The total cost of the clerks employed in store-keeping, time-keeping, cost-kee^Ding and the keeping of all records needed for the schedule and production sheets is in some cases as low as 5 per cent of the total pay- roll, and in the ordinary factory should not be over 8 per cent. PEOGEESS OF PRODUCTION To get a record of the work on any order, the cards which have been sorted out by order number are further sorted by name of part and operation. We thus get together the cards showing on an order the number of pieces on which a certain operation has been finished that day. These are added up and entered directly on the schedule sheet. By this method we can keep an intelligible A PRACTICAL EXAMPLE 287 record of all the work done with a minimum of clerical labor. DIFFICULTY OF GETTING A DAILY BALANCE It is not necessary for the purpose I have in mind to dwell further on the details, my object being only to show that the difficulty of getting this daily record of our men and a balance of the work done is not so great as to be prohibitory. In other words, it is an entirely feasible thing to know exactly all that has been done in a large plant one day before noon of the next, and to get a complete balance of work in order to lay out that after- noon in a logical manner the work for the next day. VALUE OF A SCHEDULE AND BALANCE The value of such a balance consists in the fact that it makes clear details that no ob- server, however keen he may be, can see by inspection. It shows us what work is behind and how much, and enables us to trace to its source the cause of any delay. The super- intendent sees at a glance what he never could find out by observation or by asking questions. It shows him how efficiently a plant is being run and where the defects in 288 WORK, WAGES, AND PROFITS operation are. In connection with the man's record, it is the most complete analysis we can make of the working of a plant, and the one that will help us most quickly to bring into their proper channels things that have gone haphazard. Such an analysis is far more important than an improved tool steel or a new set of piece rates, for it enables those in authority to see each day how their orders are being carried out. ACCOUNTING AND OPERATION It is my opinion that we can do nothing in a manufacturing plant that will go so far toward increasing the output, or the economy of operation, as obtaining this exact knowl- edge of what is being done. The cost of get- ting it is not great and the method of opera- tion need not be disturbed in the least until accumulation of knowledge points out the best course to pursue. By the adoption of the methods outlined the accounting department ceases to be sim- ply a critic of the manufacturing, and be- comes an active assistant to every foreman and to the superintendent. In other words, the accounts cease to be simply records of production, and become potent factors in A PRACTICAL EXAMPLE 289 helping the producing departments to greater efiSciency. SCHEDULE SYSTEM The instruction card is really a detail schedule which represents our best knowledge of the method and speed of doing work. Hence, this whole system of manufacture, viewed from this standpoint, is a schedule system, and may be likened to the system of operating trains on a railroad. The train despatcher is the center of such a system on a railroad, and the head of the ''planning office" where all our schedules originate and records are kept has a similarly important job. It is his business to keep the routine operations of the factory going on the lines that have been laid down, and if he does his work properly, an advance once made should never be lost. He is strictly a routine man, and carries out the instructions of the super- intendent and the other experts, who study all problems and determine methods of solv- ing them. ROUTINE AND EXPERT WORK All work may be divided into these two general classes, and it is an interesting fact 290 WORK, WAGES, AND PROFITS that the vast majority of men may be di- vided into similar classes. We sometimes find a man who can do equally well either kind of w^ork, but this is rare. As a rule a man prefers either to follow instructions day after day, or finds it very irksome to follow instructions at all. The first man usually be- comes a good routine man; the second may become an expert if he has honesty, ability to think, and industry. Such men become art- ists, designers, engineers, investigators, and inventors. They are the men, such as Watt, Fulton, Stephenson, Whitney, Edison, and a host of others, wdio are primarily respon- sible for the civilization of today. It is of the greatest importance that such men should be properly trained and utilized. If such a man has honesty and industry, but no ability, he is apt to spend his time making useless inventions. If he has honesty and ability, but no industry, he is very apt to spend his time telling other people what they should do. If he has ability and indus- try, but no honesty, he has in him the making of a bank wrecker, or a burglar, as the op- portunity offers. Our manufacturers have given too little attention in the past to this kind of man, and, A PRACTICAL EXAMPLE 291 instead of guiding liim, liave too often re- pressed liim, to their own detriment as well as his. A proper system of management recognizes that many men belong to this gen- eral class, and makes provision for utilizing them. GENERAL PRINCIPLES AND DETAILS While this chapter has necessarily been de- voted largely to general principles, I have shown enough details to give a general idea of the system advocated, which is one in which the manager takes the responsibility for managing instead of "putting it up" to someone else. While the idea is simple, it has taken a vast amount of work to make the method of carrying it out sufficiently simple to be prac- ticable on a large scale. The attempt to carry this out in a large variety of plants during the past fifteen years has resulted in developing many methods that are common to, or similar in, all kinds of manufacture. This varied experience has greatly helped us to simplify our methods, and those that undertake to carry out this general idea with- out developing shorter methods than the writer has usually found in vogue will soon 292 WORK, WAGES, AND PROFITS be floundering in a hopeless maze of detail, as many have done in the past. These are the men who are wasting so much energy today telling us that this work can 't be done. The failure of one man is no indication that all men will fail, and the energy wasted in attempting to prove such a proposition almost tempts me to offer the following ad- vice given by a celebrated professor to a student who was always trying to tell why things could not be done: ''You had better be careful; some damn fool will come along some day and do it." INDEX INDEX tccoiinting and operation, 288; department potent factor in efficient produc- tion, 28S ^r^curacy of thought ac- quired, "223 Advancement — Chance for, 89 American Locon,ot\ve Com- pany, 68, 70; Society of Mechanical Engi/ibers, 87, 111, 149 Analysis of details esson. 3 1158 00679 1502 UC SOUTHERN REGIONAL ^BFWRY FACILir AA 001097 251 1