Frederick Taylor's Piece Rate System - 1895 - Part 5
61. As far as possible each man’s work should be in-
spected and measured separately, and his pay and losses
should depend upon his individual efforts alone. It is,
of course, a necessity that much of the work of manu-
facturing — such, for instance, as running roll-trains,
hammers, or paper machines — should be done by gangs
of men who cooperate to turn out a common product,
and that each gang of men should be paid a definite
price for the work turned out, just as if they were a
In the distribution of the earnings of a gang among
its members, the percentage which each man receives
should, however, depend not only upon the kind of
work which each man performs, but upon the accuracy
and energy with which he fills his position.
In this way the personal ambition of each of a gang
of men may be given its proper scope.
62. Again, we find the differential rate acting as a
most powerful lever to force each man in a gang of
workmen to do his best ; since if, through the careless-
ness or laziness of any one man, the gang fails to earn
its high rate, the drone will surely be obliged by his
companions to do his best the nekt time or else get out.
63. A great advantage of the differential rate system
is that it quickly drives away all inferior workmen and
attracts the men best suited to the class of work to
which it is applied, since none but really good men can
work fast enough and accurately enough to earn the
high rate ; and the low rate should be made so small as
to be unattractive even to an inferior man.
64. If for no other reason that it secures to an estab-
lishment a quick and active set of workmen, the differ-
ential rate is a valuable aid, since men are largely
creatures of habit, and if the piece-workers of a place
are forced to move quickly and work hard the day-
workers soon get into the same way, and the whole shop
takes on a more rapid pace.
65. The greatest advantage, however, of the differen-
tial rate for piece-work, in connection with a proper rate-
fixing department, is that together they produce the
proper mental attitude on the part of the men and the
management toward each other. In place of the in-
dolence and indifference which characterize the work-
men of many day-work establishments and to a consid-
erable extent also their employers, and in place of the
constant watchfulness, suspicion, and even antagonism
with which too frequently the men and the management
regard each other under the ordinary piece-work plan,
both sides soon appreciate the fact that with the differ-
ential rate it is their common interest to cooperate to the
fullest extent, and to devote every energy to turning
out daily the largest possible output This common in-
terest quickly replaces antagonism and establishes a
most friendly feeling.
66. Of the two devices for increasing the output of a
shop, the differential rate and the scientific rate-fixing
department, the latter is by far the more important
The differential rate is invaluable at the start as a means
of convincing men that the management is in earnest in
its intention of paying a premium for hard work, and it
at all times furnishes the best means of maintaining the
top notch of production ; but when, through its applica-
tion, the men and the management have come to appre-
ciate the mutual benefit of harmonious cooperation and
respect for each other’s rights, it ceases to be an absolute
necessity. On the other hand, the rate-fixing depart-
ment, for an establishment doing a large variety of work,
becomes absolutely indispensable. The longer it is in
operation the more necessary it becomes.
67. Practically, the greatest need felt in an establish-
ment wishing to start a rate-fixing department is the lack
of data as to the proper rate of speed at which work
should be done.
There are hundreds of operations which are common
to most large establishments ; yet each concern studies
the speed problem for itself, and days of labor are wasted
in what should be settled once for all and recorded in a
form which is available to all manufacturers.
68. What is needed is a hand-book on the speed with
which work can be done, similar to the elementary en-
gineering hand-books. And the writer ventures to pre-
dict that such a book will, before long, be forthcoming.
Such a book should describe the best method of making,
recording, tabulating, and indexing time-observations,
since much time and effort are wasted by the adoption
of inferior methods.
69. The term “ rate-fixing department,” has rather a
formidable sound. In fact, however, that department
should consist in most establishments of one man, who
in many cases need give only a part of his time to the
70. When the manufacturing operations are uniform
in character and repeat themselves day after day — as,
for instance, in paper or pulp mills — the whole work of
the place can be put upon piece-work in a comparatively
short time ; and when once proper rates are fixed the
rate-fixing department can be dispensed with, at any
rate until some new line of manufacture is taken up.
71. The system of differential rates was first applied
by the writer to a part of the work in the machine shop
of the Midvale Steel Company, in 1884. Its effect in
increasing and then maintaining the output of each
machine to which it was applied was almost immediate,
and so remarkable that it soon came into high favor
with both the men and the management. It was grad-
ually applied to a great part of the work of the establish-
ment, with the result, in combination with the rate-
fixing department, of doubling and in many cases treb-
ling the output, and at the same time increasing instead
of diminishing the accuracy of the work.
72. In some cases it was applied by the rate-fixing de-
partment without an elementary analysis of the time re-
quired to do the work, simply offering a higher price
per piece providing the maximum output before attained
was increased to a given extent. Even this system met
with success although it is by no means correct, since
there is no certainty that the reward is in just propor-
tion to the efforts of the workmen.
73. In cases where large and expensive machines are
used, such as paper machines, steam hammers, or rolling
mills, in which a large output is dependent upon the
severe manual labor as well as the skill of the workmen
(while the chief cost of production lies in the expense
of running the machines rather than in the wages paid),
it has been found of great advantage to establish two or
three differential rates, offering a higher and higher
price per piece or per ton as the maximum possible
output is approached.
74. As before stated, not the least of the benefits of
elementary rate-fixing are the indirect results.
The careful study of the capabilities of the machines
arid the analysis of the speeds at which they must run,
before differential rates can be fixed which will insure
their maximum output, almost invariably result in first
indicating and then correcting the defects in their de-
sign and in the method of running and caring for them.
75. In the case of the Midvale Steel Company, to
which I have already referred, the machine shop was
equipped with standard tools furnished by the best
makers, and the study of these machines, such as lathes,
planers, boring mills, etc., which was made in fixing
rates, developed the fact that they were none of them
designed and speeded so as to cut steel to the best ad-
vantage. As a result, this company has demanded alter-
ations from the standard in almost every machine which
they have bought during the past eight years. They
have ^themselves been obliged to superintend the design
of many special tools which would not have been thought
of had it not been for elementary rate-fixing.