A Rational Wages System

PART I. General Principles

GENERAL PRINCIPLES

CHAPTER

I. DIFFERENT METHODS OF PAYMENT OF WAGES 1

(a) Day Work 2

(b) Piece Work 6

(c) Profit Sharing 8

(d) Co-partnership 11

(e) Co-operation 13

(f) Bonus Systems 15

(g) The Reward System 16

II. WAGES AND EFFICIENCY REWARD 18

(a) The Reward System 18

(b) The Basis of Reward Payment 24

(c) Special Reward for High Efficiency 30

(d) The Classification of Work 31

(e) Reward derived from Increased Production 32

(f) Safeguards 33

(g) Attention to Service Details 35

(h) Loss of Skill due to the Reward System 40

III. WAGES AND PROGRESS 43

(a) Antagonism between Employer and Worker 43

(b) Trade-Unions and the Reward System 45

(c) Scientific Management and the Reward System 47

(d) The Future of Labour 50

(e) The Actual and the Ideal 56

PART II. An Application of the Principles to a

AN APPLICATION OF THE PRINCIPLES TO A PARTICULAR CASE

IV. WORK AND REWARD 67

(a) Routing the Work 68

(b) The Time Study 70

(c) Fixing Standard Time 73

(d) The Instruction Card 79

(e) Spoiled Work 79

(f) Allowances 81

(g) Efficiency Calculation 83

PART III. Explanation of Diagrams Showing

EXPLANATION OF DIAGRAMS SHOWING DIFFERENT METHODS OF REWARD PAYMENT

V. REWARD AND EFFICIENCY 86

(a) Reward System No. 1 90

(b) Reward System No. 2 92

(c) Reward System No. 3 94

(d) Reward System No. 4 96

(e) The Taylor System 98

(f) The Gantt System 100

(g) The Emerson System 102

(h) The Rowan System 104

(i) Day Rate 107

(j) Piece Work 107

(k) The Ford System 109

Appendix: A FLOATING WAGE RATE 111

A RATIONAL WAGES SYSTEM

PART I. General Principles

GENERAL PRINCIPLES

CHAPTER I

DIFFERENT METHODS OF PAYMENT OF WAGES

The war has brought the question of efficiency and efficiency methods to the front very prominently, and there is a consensus of opinion that it will be necessary to adopt them very widely if we are to retain our present commercial and national position in the world.

The object of such methods is to obtain increased production. It is well known that the worker can produce far more than he does, but from his point of view there is no particular reason why he should attempt to do so under ordinary working conditions.

The circumstances are altered entirely if increased production results in higher wages with better conditions of work, and if the worker does not get too tired or suffer any injury to his health in the process.

The Reward System described herein satisfies these conditions, but before giving the description it will be well to examine briefly the existing methods of wage payment and point out their advantages and disadvantages.

(a) DAY WORK.

This is the commonest method of wage payment in the United Kingdom at the present time.

For every hour worked, the worker gets so many pence--10d., 11d., 1s. an hour, or whatever it may be. As wages are paid weekly, it is usual to reckon them at so many shillings per week.

In any factory, nearly all the men who work at the same kind and class of labour get approximately the same wage. In union shops they do all get exactly the same wage.

Before the days of the trade-unions each man was paid according to his skill, as nearly as possible; a good workman received more wages than a poor one. But the trade-unions have stopped that as far as they can. In any one trade all workers, good, bad, and indifferent, are now paid the same wages.

The day work system, although in a great many cases it cannot be avoided, is extremely unsatisfactory.

On the one hand, the employer endeavours to get all he can out of the worker while paying him the least possible wages. Speaking generally, the employer looks upon the worker as a necessary evil, and treats him accordingly. The worker must produce as much as possible and receive as low wages as possible. No consideration is given to the question of what wages will buy.

On the other hand, the worker retaliates by doing just as much work as will enable him to keep his job, and no more. Many workers spend as much energy and time in avoiding work as they do in executing it, and it is absolutely necessary for the employer to have a foreman hustling round all the time to see that a reasonable amount of work is done.

In order to equalise the conditions for all workers, the unions have fixed a standard rate of wages for all men working at any one particular trade. This means that both good and bad workers receive the same rate of pay.

Such an arrangement is quite unfair both to the good worker and to the employer, and it gives the employer a very sound reason for opposing the unions on all possible occasions.

But it is worse for the good worker than for the employer, because it affects him in several ways. When two workers are at work side by side, one a good worker and the other a slacker, it is galling for the good man to know that the slacker gets the same wages as himself. It tends to make the good man indifferent to his work, and it needs a good deal of moral courage and great force of character for a man to keep on doing his best under such circumstances, especially when one remembers the great excess of slackers over good men, and how easy it is to find a good excuse for slacking.

The extraordinary thing is that a man's union compels him to slack even if he has no desire to do so. His fellow-unionists keep a watchful eye on a good man, and if he is producing more than a certain quantity he is told to ease up. There is no possible excuse for this attitude, and it has done more to discredit the unions than any other thing. It saps the good worker's morality, and reduces the whole ethics of Labour and wage payment to the lowest possible standard.

Apart from the question of antagonism between the employer and the worker, there is one factor missing, a factor that is all-important even in the best type of day work and under the best conditions. It is that the best method of doing the work is never known.

One man has one idea, another man has another; one man has his own method, another man has a different method; one man has a certain knack of using the special tools required for a particular job, another man has only a general knowledge of their use; one man has done the job many times and knows the short-cuts, another man is new to the job and goes slowly; one man tackles the job haphazard, another spends time in considering the best way of doing it; one man believes that one form of tool is the best for certain metals, another man believes in a different form; one man thinks a job should be done in this way, another man thinks it should be done that way; one shop practice is to do a job in such a manner and on such machines, another shop will do it in a different way on a different type of machine.

And so it goes on....

All the time the foreman is hovering around, urging the men, praising one man for his speed in order to get him to work quickly all the time, but more generally bullying the slow man into working a bit faster. And he settles all matters in an arbitrary manner, which means the job must be done his way, right or wrong!

It cannot be helped. When a worker starts a job, he does not know just what speed his machine must run at for that job. True, experience is a good guide, but it means trying a speed before he can be certain. And trying a speed means a certain amount of care and watchfulness; then it probably means making adjustments of speed and tool. This means stoppages, readjustments, retrials, and an all-round loss of time and efficiency.

Now, is the man a better workman for all this? If it proved eventually that all men became of the same opinion as regards speeds, forms of tools, and methods of working, and if all men became highly efficient, one could at least say that the result justified the method, in spite of the enormous waste of time and talk and temper. But, as a matter of fact, one rarely gets two workmen of the same opinion or of the same proficiency, and a man never turns out as much work as he is capable of.

Added to all this is the deadening monotony of the daily round of toil with no variation, no release from the fixed hours, no inducement to do one's best, no chance of getting any extra pay unless by occasional overtime.

Theoretically, day work is the fairest method, because if a man does his best he ought to get the same wages as any other man, no matter what his production may be; but in practice this is impossible, hence one is driven to the conclusion that day work, as it is practised at present, stands condemned, and ought to be limited to such jobs and working conditions where it is impossible to apply other methods.

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