Saturday, November 3, 2018

Frederick Taylor's Piece Rate System - 1895 - Part 3

Frederick Taylor's Piece Rate System - 1895 - Part 3

31. Cooperation, or profit sharing, has entered the mind of every student of the subject as one of the possible and most attractive solutions of the problem ; and there have been certain instances, both in England and France., of at least a partial success of cooperative experiments.

So far as I know, however, these trials have been made either in small towns, remote from the manufacturing centres, or in industries which in many respects are not subject to ordinary manufacturing conditions.

32. Cooperative experiments have failed, and, I think, are generally destined to fail, for several reasons, the first and most important of which is, that no form of cooperation has yet been devised in which each individual is allowed free scope for his personal ambition. This always has been and will remain a more powerful incentive to exertion than a desire for the general welfare. The few misplaced drones, who do the loafing and share equally in the profits with the rest, under cooperation
are sure to drag the better men down toward their level.

33. The second and almost equally strong reason for failure lies in the remoteness of the reward. The average workman (I don’t say all men) cannot look forward to a profit which is six months or a year away. The nice time which they are sure to have to-day if they take things easily, proves more attractive than hard work with a possible reward to be shared with others six months later.

34. Other and formidable difficulties in the path of cooperation are, the equitable division of the profits, and the fact that, while workmen are always ready to share the profits, they are neither 'able nor willing to share the losses. Further than this, in many cases it is neither right nor just that they should share either in the profits or the losses, since these may be due in great part to
causes entirely beyond their influence or control, and to which they do not contribute.

35. When we recognize the real antagonism that exists between the interests of the men and their em-
ployers under all of the systems of piece-work* in common use, and when we remember the apparently irreconcilable conflict implied in the fundamental and perfectly legitimate aims of the two, namely, on the part of the men, —


And on the part of the employers, —


What wonder that most of us arrive at the conclusion that no system of piece-work can be devised which will enable the two to cooperate without antagonism, and to their mutual benefit ?

36. Yet it is the opinion of the writer that even if a system has not already been found which harmonizes the interests of the two/ still the basis for harmonious cooperation lies in the two following facts :

First . That the workmen in nearly every trade can and will materially increase their present output per day, providing they are assured of a permanent and larger return for their time than they have heretofore received.

Second. That the employers can well afford to pay higher wages per piece even permanently , providing each man and machine in the establishment turns out a proportionately larger amount of work.

37. The truth of the latter statement arises from the well recognized fact that, in most lines of manufacture, the indirect expenses equal or exceed the wages paid directly to the workmen, and that these expenses remain approximately constant, whether the output of the establishment is great or small.

From this it follows that it is always cheaper to pay higher wages to the workmen when the output is proportionately increased : the diminution in the indirect portion of the cost per piece being greater than the increase in wages. Many manufacturers, in considering the cost of production, fail to realize the effect that the volume of output has on the cost. They lose sight of the fact that taxes, insurance, depreciation, rent, interest, salaries, office expenses, miscellaneous labor, sales expenses, and frequently the cost of power (which in the aggregate amount to as much as wages paid to workmen), remain about the same whether the output of the establishment is great or small.

38. In our endeavor to solve the piece-work problem by the application of the two fundamental facts above referred to, let us consider the obstacles in the path of harmonious cooperation, and suggest a method for their removal.

39. The most formidable obstacle is the lack of knowledge on the part of both the men and the
management (but chiefly the latter) of the quickest time in which each piece of work can be done ; or, briefly, the lack of accurate time-tables for the work of the place.

40. The remedy for this trouble lies in the establishment in every factory of a proper rate-fixing department ; a department which shall have equal dignity and command equal respect with the engineering and managing departments, which shall be organized and conducted in
an equally scientific and practical manner.

41. The rate-fixing, as at present conducted, even in our best managed establishments, is very similar to the mechanical engineering of fifty or sixty years ago. Mechanical engineering at that time consisted in imitating machines which were in more or less successful use, or in guessing at the dimensions and strength of the parts of a new machine ; and as the parts broke down or gave out, in replacing them with the stronger ones. Thus each new machine presented a problem almost independent of former designs, and one which could only be solved by months or years of practical experience and a series of break-downs.

Modern engineering, however, has become a study, not of individual machines, but of the resistance of materials, the fundamental principles of mechanics, and of the elements of design.

42. On the other hand, the ordinary rate-fixing (even the best of it), like the old-style engineering, is done by a foreman or superintendent who, with the aid of a clerk, looks over the record of the time in which a whole job was done as nearly like the new one as can be found, and then guesses at the time required to do the new job. No attempt is made to analyze and time each of the classes of work, or elements of which a job is composed ; although it is a far simpler task to resolve each job into
its elements, to make a careful study of the quickest time in which each of the elementary operations can be done, and then to properly classify, tabulate, and index this information, and use it when required for rate-fixing, than it is to fix rates, with even an approximation to justice, under the common system of guessing.

43. In fact, it has never occurred to most superintendents that the work of their establishments consists of various combinations of elementary operations which can be timed in this way ; and a suggestion that this is a practical way of dealing with the piece-work problem usually meets with derision, or, at the best, with the answer that “ It might do for some simple business, but
my work is entirely too complicated.”

44. Yet this elementary system of fixing rates has been in successful operation for the past ten years, on work complicated in its nature and covering almost as wide a range of variety as any manufacturing that the writer knows of. In 1883, while foreman of the machine shop of the Midvale Steel Company of Philadelphia, it occurred to the writer that it was simpler to time each of the elements of the various kinds of work done in the place, and then find the quickest time in
which each job could be done, by summing up the total times of its component parts, than it was to search through the records of former jobs and guess at the proper price. After practising this method of rate-fixing himself for about a year as well as circumstances would permit, it became evident that the system was a success. The writer then established the rate-fixing department, which has given out piece-work prices in the place ever since.

45. This department far more than paid for itself from the very start ; but it was several years before the full benefits of the system were felt, owing to the fact that the best methods of making and recording time observations of work done by the men, as well as of determining the maximum capacity of each of the machines in the place, and of making working-tables and time-
tables, were not at first adopted.

Foot Note

1 The writer’s knowledge of the speed attained in the manufacture of textile goods is very limited. It is his opinion, however, that owing to the comparative uniformity of this class of work, and the
enormous number of machines and men engaged on similar operations, the maximum output per man and machine is more nearly realized in this class of manufactures than in any other. If this is the
case, the opportunity for improvement does not exist to the same extent here as in other trades. Some illustrations of the possible increase in- the daily output of men and machines are given in paragraphs 78 to 82.

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Updated on 4 November 2018, 24 July 2018

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