Wednesday, September 18, 2013

Emerson - Handling Labor for Efficiency Improvement - Going

The Emerson efficiency or individual-effort system 1 has
certain resemblances to both the Halsey premium and the
Gantt bonus plans. It recognizes that there is truth in the
psychology of both these systems, different as they are
psychologically, and it recognizes advantages in both their
methods. Nevertheless, although it has these resemblances
it proceeds by a philosophy and a plan of its own", which is
distinct and characteristic.

To begin with, it establishes the regular daily-wage scale
and system as the basis of employment, thus agreeing with
both Halsey and Gantt. Next, it prescribes the standard
of production after scientific study, and offers a rather large
bonus for reaching it, thus agreeing with Gantt; but it leads
up to this bonus reward by a graduated scale of smaller
bonuses, thus approaching the Halsey premium plan.

To take up its features in greater detail, let us go back
to the measures preliminary to the introduction of the sys-

1 " A Rational Basis for Wages," by Harrington Emerson ; Trans. Am.
Soc. M. E., June, 1904. Also " Efficiency as a Basis for Operation and
Wages " ; The Engineering Magazine.

tern. As in the case of the Taylor and Gantt policies al-
ready described, the arrangement, equipment, and working
conditions in the shop or factory are standardized to secure
the utmost efficiency and to prevent all wastes and losses that
are preventable. Standard times for every operation are
then determined and scheduled by the most careful study.
In setting these times Emerson apparently gives more weight
to averaged past experience than Taylor or Gantt, but is
not so closely governed by it as Halsey. Taylor and Gantt,
indeed, are inclined to proceed without much regard to what
has been the practice in any particular case. They go back
to the very best way of doing the thing, and having de-
termined this scientifically for every element, they add these
elementary operation times together, allow a certain factor
for what might be called the human equation that is,
a margin by which the workman may be permitted to fall
short of perfection add perhaps another factor for im-
perfection of materials, and so arrive at a final result.
Halsey is disposed to make good existing shop practice the
standard and not to go very far back of that in setting stand-
ard times, but to rely largely on the skill and effort of the
individual workman for finding ways of bettering the old
records. Emerson's policy inclines rather to the method
of taking such records as Halsey would accept as standards,
and refining down by deducting for the preventable wastes
and losses that have been occurring and that are to be elimi-
nated by the improvements installed. This method, as will
be seen, goes upon the supposition that if you take practice
as it is, and correct it for all the errors and inefficiencies you
can discover and identify, the residue will be automatically
self-corrected with such inherent, necessary, and unprevent-
able inefficiencies and wastes as are innate in conditions and
undiscoverable by inspection.

Under the efficiency system, if a workman finishes a job
or an operation in the standard time which has been fixed,

he receives a bonus of 20 per cent. This rate is about the
same as the lower limit usually adopted by Gantt. The
Emerson bonus for standard performance, however, is al-
ways 20 per cent, while Gantt varies somewhat with the
agreeableness or disagreeableness of the work, occasionally
running as high as 50 per cent and probably averaging
from 30 to 40. Under the efficiency plan, however, if the
workman reaches two-thirds of the standard performance
(that is, if he finishes the job in one and a half times the
standard time) he reaches a point beyond which he begins
to receive a little extra reward, increasing gradually like the
Halsey premium. This reward, however, instead of rising
at a uniform rate as the Halsey premium does, rises on a
sliding scale. It rises, in fact, as a function of a parabola,
the performance being measured along the curve and the
bonus being apportioned according to the ordinate. This
makes the bonus very small indeed for the early savings of
time below time and a half. It merges into the 20 per cent
bonus at standard performance. For still further reductions
of time, that is, for doing the work in less than standard time
set, the workman gets the 20 per cent bonus, plus all the
time that he saves.

In the practical use of the system, the individual bonuses
are usually calculated for each man's work for a period of
one month. His efficiency for that entire time is reduced
to a percentage by dividing the times allowed by the times
taken. For instance, taking a single job as an example,
if a man takes 90 minutes to do a job standardized at 60
minutes, his efficiency is 60 divided by 90, or 66 2-3 per
cent. If he takes 60 minutes to do a job standardized at
60 minutes his efficiency is 60 divided by 60, or 100 per
cent. If he takes only 40 minutes to do a job standardized
at 60, his efficiency is 60 divided by 40, or 150 per cent. As
already explained, however, it is characteristic of the
Emerson efficiency system that the efficiency is not calcu-

lated job by job, but on the sum of all the work done during
the bonus period, which, as already explained, is usually one
month. Two important results are thus secured. The
first is that elaborately accurate timekeeping is not neces-
sary for wage purposes, although quite apart from this it
may be desired for cost-keeping purposes. All the pay-
master needs is a list of the jobs each man did during the
bonus period. He takes off, from the standardized sched-
ule of operations, the standard times allowed for these jobs,
adds them together, and divides these total standard hours
by the total of the wage hours the man actually worked.
The result gives him the man's efficiency percentage for
bonus calculation. He looks in his standard table for the
bonus corresponding to that efficiency and adds it to the
man's regular wages. The first result, then, is that minute
time-taking is not essential. The second result is that un-
less a man maintains good efficiency on all jobs his bonus is
automatically cut down. Suppose, working repetitively at
a job standardized at 60 minutes, a man should spurt for
two hours at a 4O-minute gait, and then should loaf for
eight hours at a i2O-minute gait, he would finish in 600
minutes only seven jobs standardized in total at 420 min-
utes. His efficiency would be 420 divided by 600, or 70
per cent. His bonus would practically disappear. He
would still get his day wages, of course, just as he would
under the Gantt plan or the Halsey plan; but under the
Halsey premium he would, and under the Gantt system he
might, be awarded bonus for the three quick jobs, although
on the whole he was not a profitable man to the shop. It
is not uncommon, where the premium system is in force, for
men to beat the shop in this way by earning a good pre-
mium through an energetic spurt and then loafing along
at day wages for some time afterwards. This disposition
is automatically met by the efficiency plan. Gantt provides
for it to a considerable extent by offering a secondary bonus ;

for example, a bonus to the foreman if every man under
him makes bonus, or a second bonus to the worker who
makes bonus every day in the week.

A peculiar point in the efficiency system is that the bonus
begins at 66 2-3 per cent efficiency. The awards for the
earlier and easier savings of time, however, are very small.
At 67 per cent efficiency the bonus is i-ioo of i per cent
of a man's wages. It does not become i per cent of his
wages until he reaches 74 per cent efficiency. At 77 per
cent efficiency the bonus is 2 per cent of wages; at 83 per
cent it is 5 per cent of his wages; at 90 per cent efficiency, 10
per cent of wages; and at 100 per cent efficiency, 20 per cent
of wages. The full table is given below :

To go back to a simile already used, if Gantt invites the
men to jump and Halsey coaxes them up an inclined plane,
we might say that Emerson shapes this plane to a gradually
increasing curve. Each man's performance is measured by
the distance he comes along the curve, while his reward is
proportioned to the vertical height he climbs. Increasing
fatigue is thus met by proportionate reward for each suc-
cessive effort. The normal result is the training of a num-

her of men with graduated records, as under the Halsey
plan, but with a tendency to collect the denser crowd near
the top, with the line thinning out as you go down the scale
to the smaller and poorer performances.

Omitting minor variations which are of limited interest,
the systems we have now reviewed comprise all the well
recognized and distinctly formulated wage systems properly

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