Increasing Efficiency In Business by Walter Dill Scott (desktop ebook reader .txt) 📕

for the new men.

 

Measuring this cold-blooded policy against

the consideration, the unfailing effort of their

old employer to “take care of them” in bad

seasons, the workers decided to stick to the

smaller company and refuse the advance.

 

_Next to continuous employment, among methods

of increasing the value of wages, is the policy

of making promotions from the ranks_.

 

This practice seems to be commonly ac-

<p 156>

cepted as fruitful, although many firms believe

it impossible of application in filling some

of the higher as well as some of the more technical

positions. Where the system is applicable,

it acts as a powerful stimulus to the

men by adding to their present wages the

promise or possibility of better positions and

higher pay in the future. It gives assurance of

promotion for faithful service much greater

than in houses which fill the upper positions

from outside sources on the assumption that

they thus get “new blood” into the business.

The men secured from outside may be more

skilled or more productive of immediate results

than any available in the house organization.

By their importation, however, the

wages of all the men aspiring to the position

have been cheapened. Nor does the evil stop

there.

 

_The assumption is naturally drawn that the

same practice is likely to be followed in filling

other vacancies. The stimulus to initiative and

activity is thus weakened for men in every grade

and their wages are shrunk below par_.

<p 157>

 

The importance which some successful employers

attach to this principle of promotion

from the ranks is well illustrated by an incident

which recently occurred in a large manufacturing

establishment organized on a one-man

basis. During the president’s absence it was

decided to open up a new zone of trade for a

new product. No one in the organization

knew the product and the field, so a new man

was put in charge. The work progressed

surprisingly well; the enterprise was in every

way successful.

 

When the real head returned, he called his

managers together and told them that the

new man must be removed and the most deserving

man in the regular organization appointed

in his place. He was met with the protest

that no employee was capable of taking up the

work and reminded that the new man had

already achieved great success. The president

answered that he was willing to lose money

in the department for the first year rather than

cheapen and disorganize the service by taking

away the certainty of promotion and by re-

<p 158>

moving the incentive to study and self-development

which had increased the efficiency of

every ambitious employee.

 

Innumerable examples of the same principle

in promotions could be gleaned from the

records of some of the oldest and most progressive

houses in the country. In one establishment

visited, the quality of whose wares

is strenuously guarded, it was discovered that

the chemist and metallurgist in charge of the

factory laboratory had been lifted out of one

of the departments and supplied with the

money to take a specialized course in physics,

chemistry, and metallurgy. The advertising

manager, the factory engineer, and two or three

of the foremen had been given leaves of absence

to study and fit themselves for the positions

to which their talents and inclinations

drew them. Even among the workmen there

was a fixed basis for advancement towards the

better jobs and the higher rates, dependent on

satisfactory service and output.

 

To these major considerations in increasing

the worth of wages, those companies which

<p 159>

have given the longest attention to the problem

add many other inducements.

 

_An efficient and contented employee has a

positive money value to any employer. To hold

him and keep him efficient, his personal comfort

and needs should be considered in every way

not detrimental to the company’s interests_.

 

As nearly as possible, the ideal in factory

location and construction is approached. Some

industries have removed bodily to country

towns, less for the sake of a cheap site than

for the purpose of establishing themselves

where housing conditions for workers were

good, rents low, the cost of living cheaper, and

other factors tending to *add value to every dollar

paid in wages were present. Direct appeal

was made to the intelligence of employees,

whose health is part of their capital, by making

and keeping working conditions as healthful

and sanitary, as little taxing on eyesight and

bodily vigor as circumstances and judicious

investment of capital allowed. Scores of

towns have been built outright, to benefit

employees.

<p 160>

 

In line with this policy are the systems of

benefit insurance for accident and sickness

maintained and partly supported by many

companies; the pension systems which have

been adopted within the last few years by

some of the greatest and most progressive

companies in America; the free medical service,

both in case of factory accidents and

sickness at home, which other firms provide

for employees; and various other activities

contributing to the welfare of workers, both

during working hours and afterwards.

 

Employers are coming more and more to

see that this is the case and to devote both

thought and money to the elimination of conditions

which cut wages below par.

 

_Whatever reduces hazard, discomfort, loss of

time, uncertainty, or the cost of living for workers

adds value to their wages and is a means of

influencing their attitude towards the company_.

 

Some employers are continually exercised

to keep the wages of their men from falling

below par. Others are equally solicitous that

their men may regard their wages as above

<p 161>

par. This classification is a real one and was

made plain by some of the interviews referred

to above. Thus in answer to the question,

“What special method do you employ to make

men satisfied or pleased with their wages?”

one employer immediately put his own interpretation

on the question. To him it meant,

“What method do you employ to keep your

men from being *dissatisfied with their wages?”

 

His answer was: “By paying them somewhere

near what they ask or expect. If we

don’t,” he added, “they go out on strike and

we have to compromise.”

 

The majority of successful employers have

advanced beyond this negative, defensive

attitude and take a positive and aggressive

position in dealing with the problem.

 

_Instead of assuming their work accomplished

when the men are not dissatisfied or rebellious,

they do not rest until every dollar paid out in

wages is above par in its influence upon efficiency_.

 

Thus in innumerable ways the progressive

employer increases the value of all wages he

<p 162>

pays by making them appeal to the reason

and to the instincts of workers in a way un-dreamed of by less enlightened men. The

purpose of wages is to produce a certain

psychological effect and to promote the most

favorable attitude on the part of the worker.

The methods of increasing the purchasing power

of money thus spent is one of the most interesting

and yet complex problems which the

business man has to face.

 

This chapter shows the psychological ground

for the following statements:—

 

Employees differ in their response to piecework

rates and to salaries. Some respond

more satisfactorily to one and some to the

other.

 

When the development of men for better

positions is of prime importance, the piecework

system is not to be adopted. If the

quantity of work per unit of wage is of greatest

importance, then some form of wage other

than fixed salary should be used.

 

An employee should not be dismissed as

hopelessly lazy till he has shown this attitude

<p 163>

in more than one department or has failed to

respond to different forms of stimulation.

 

Changes in wages may often be placed under

the authority of some person or committee

other than the immediate superiors of the

employees involved. This authority may be

vested in the direct representatives of the

executives or in such a committee as would

be formed by representatives of the executives

and also employees from the different departments

of the establishment.

 

_Payment of wages, so far as possible, should

be made to appeal to the instincts for social distinction

and for acquisition as well as to the instinct

for self-preservation_.

 

Wages should never be reduced without a

tactful and sincere attempt to convince the

men of the necessity of such an act.

 

Increase in wages may well be made a personal

matter. Some firms, however, are most

successful with a mechanical wage system in

which employees know exactly the conditions

necessary for an increase in wages.

 

All work should be thoroughly supervised

<p 164>

and inspected so that employees know that

good service will be recognized and rewarded.

 

The policy of filling all positions from the

ranks seems growing in favor, since it gives

certain hope for advancement and hence

greater satisfaction with the present wage.

 

The wage may well include a tacit insurance

for the future. Employees should be assured

that so long as they remain faithful to the

firm, their work and pay will continue, and

that in accident or old age they will be provided

for. Accepted thus, the wage secures

increased service.