CHAPTER VIII - LABOR. PHILOSOPHIES OF MANAGEMENT
Principles of Management by C.B Going
PROCEEDING now from the wage systems which are
merely modes of payment that is, which do not go
beyond the concept of enlisting the workman's interest
through the medium of his compensation we come to an-
other group of methods in which the manner of payment
is only one feature of a policy of management, embodying
many other ideas and principles.
Prominent among these as one of the early and very
widely noticed applications of the ideas upon which other
systems of very different philosophy have been built, is the
Taylor differential piece rate. 1 More than thirty years ago,
at the Bethlehem Steel Works, Frederick W. Taylor began
a development of the conception that labor of all kinds,
operations of all kinds, could be scientifically studied and
analyzed and reduced to elementary processes; that these
elementary processes could each be performed in some one
best way, discoverable by an expert investigator; that there
was a minimum of time in which each could be continuously
performed by a good workman ; that the workman could be
taught to do each elementary operation, and hence the en-
tire job, in the best way and the minimum time; and that
the payment of a considerably larger price for work done
according to the standard than for work that failed to
reach the standard would secure the co-operation of the em-
ployee and induce him to put forth his best effort.
The Taylor system is no longer followed at South
1 " A Piece- Rate System," by Fred W. Taylor ; Trans. Am. Soc. M. E.,
June, 1895.
Bethlehem but its data are so important on account of the
influence they have exerted on later practitioners that they
deserve more careful attention than the number of actual
instances of the use of the system would seem to suggest.
Taylor begins, then, by an ultimate analysis of the job
into its elements. Each of these elements is then subjected
to thorough expert study to determine the methods and ap-
pliances by which a man working steadily at a pace he can
maintain without injury can reach maximum performance
and minimum time. The workman is then provided with
everything necessary to accomplish, in the standard time,
the results determined by this study, and he is thoroughly
instructed in every step of the operation by minutely de-
tailed written schedules and by expert advisers.
Finally, he is paid at piece rates which are set at two dif-
ferent levels a low price per piece if the workman fails
to do the job in the standard time, and a high price per
piece if he does it in the standard time. This is the so-
called differential rate. The successful worker is paid not
only for the more pieces he turns out, but he is also paid
more for each piece. The unsuccessful worker not only
makes less pieces to be paid for, but is paid less for each
piece of the smaller number he makes. The money gain
to the man who attains standard performance thus becomes
very large.
For example, suppose a standard performance for a cer-
tain repetitive job is set at ten pieces completed per day.
The piece rate may then be fixed at 30 cents each if stand-
ard time is attained and only 25 cents a piece if it is not.
The workman who finishes only nine pieces in a day re-
ceives but 25 cents each, or a total of $2.25. The work-
man who finishes the ten pieces set as a standard receives
30 cents each or a total of $3. For an increase of only
1 1 per cent in production he gains an increase of 33 1-3
per cent in wages. This large incentive is provided to en-
list the co-operation of the workman to make him con-
tribute his part to the effort which was begun by the man-
agement in their study of conditions and their provision
of the equipment and the instruction which would enable
the man to turn out a large volume of product. Under the
Taylor system, however, it is not intended to leave within
the workman's power much more than this co-operation.
That is, it is not intended to rely upon the workman to
originate betterments in practice, at least until he has ac-
cepted all the betterments contemplated *by the investigators
and instructors. This is a sharp distinction from the Halsey
system. Halsey relies almost entirely upon the workman's
knowledge of his job, the workman's intimate acquaintance
with shop conditions, tools and the details of the operation
to perform this operation better and more quickly when
the incentive of additional pay is provided. Taylor, by a
minute time study and a carefully elaborated scheme of
operations, manipulations and methods, purposes to super-
sede the workman's knowledge to cancel, as it were, the
workman's personal equation. In principle, there is no
objection to the workman turning out as large an excess
over the standard output as he can. In practice it is not in-
tended to leave him any large margin of capacity for doing
better than the standard. And, like the ordinary piece
rate, if a man does not reach standard his wages drop.
There is no minimum wage assured.
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