8. Background for Development of Scientific Management -Midvale Steel Company Machine Shop
Elaborate Planning Organization - Need and Utility
All of this requires the kindly cooperation of the management, and involves a much more elaborate organization and system than the old-fashioned herding of men in large gangs. This organization
consisted, in this case, of one set of men, who were engaged in the development of the science of laboring through time study, such as has been described above; another set of men, mostly skilled laborers themselves, who were teachers, and who helped and guided the men in their work; another set of tool-room men who provided them with the proper implements and kept them in perfect order, and another set of clerks who planned the work well in advance, moved the men with the least loss of time from one place to another, and properly recorded each man's earnings, etc. And this furnishes an elementary illustration of what has been referred to as cooperation between the management and the
Elaborate Planning Organization
The question which naturally presents itself is whether an elaborate organization of this sort can be made to pay for itself; whether such an organization is not top-heavy. This question will best be answered by a statement of the results of the third year of working under this plan.
Old Plan New Plan Task Work
The number of yard laborers
was reduced from between 400 & 600 down to about 140
Average number of tons per
man per day 16 59
Average earnings per man
per day $1.15 $1.88
Average cost of handling a
ton of 2240 lbs $0.072 $0.033
And in computing the low cost of $0.033 per ton, the office and tool-room expenses, and the wages of all labor superintendents, foremen, clerks, time-study men, etc., are included.
During this year the total saving of the new plan over the old amounted to $36,417.69, and during the six months following, when all of the work of the yard was on task work, the saving was at the rate of between $75,000 and $80,000 per year.
Perhaps the most important of all the results attained was the effect on the workmen themselves. A careful inquiry into the condition of these men developed the fact that out of the 140 workmen only two were said to be drinking men. This does not, of course, imply that many of them did not take an occasional drink. The fact is that a steady drinker would find it almost impossible to keep up with the pace which was set, so that they were practically all sober. Many, if not most of them, were saving money, and they all lived better than they had before. These men constituted the finest body of picked laborers that the writer has ever seen together, and they looked upon the men who were over them, their bosses and their teachers, as their very best friends; not as nigger drivers, forcing them to work extra hard for ordinary wages, but as friends who were teaching them and helping them to earn much higher wages than they had ever earned before.
It would have been absolutely impossible for any one to have stirred up strife between these men and their employers. And this presents a very simple though effective illustration of what is meant by the words "prosperity for the employee, coupled with prosperity for the employer," the two principal objects of management. It is evident also that this result has been brought about by the application of the four fundamental principles of scientific management.
As another illustration of the value of a scientific study of the motives which influence workmen in their daily work, the loss of ambition and initiative will be cited, which takes place in workmen when
they are herded into gangs instead of being treated as separate individuals. A careful analysis had demonstrated the fact that when workmen are herded together in gangs, each man in the gang becomes far less efficient than when his personal ambition is stimulated; that when men work in gangs, their individual efficiency falls almost invariably down to or below the level of the worst man in the gang; and that they are all pulled down instead of being elevated by being herded together.
For this reason a general order had been issued in the Bethlehem Steel Works that not more than four men were to be allowed to work in a labor gang without a special permit, signed by the General Superintendent of the works, this special permit to extend for one week only. It was arranged that as far as possible each laborer should be given a separate individual task. As there were about 5000 men at work in the establishment, the General Superintendent had so much to do that there was but little time left for signing these special permits.
After gang work had been by this means broken up, an unusually fine set of ore shovelers had been developed, through careful selection and individual, scientific training. Each of these men was given a separate car to unload each day, and his wages depended upon his own personal work. The man who unloaded the largest amount of ore was paid the highest wages, and an unusual opportunity came for demonstrating the importance of individualizing each workman. Much of this ore came from
the Lake Superior region, and the same ore was delivered both in Pittsburgh and in Bethlehem in exactly similar cars. There was a shortage of ore handlers in Pittsburgh, and hearing of the fine gang of laborers that had been developed at Bethlehem, one of the Pittsburgh steel works sent an agent to hire the Bethlehem men. The Pittsburgh men offered 4 9/10 cents a ton for unloading exactly the same ore, with the same shovels, from the same cars, that were unloaded in Bethlehem for 3 2/10 cents a ton. After carefully considering this situation, it was decided that it would be unwise to pay more than 3 2/10 cents per ton for unloading the Bethlehem cars, because, at this rate, the Bethlehem
laborers were earning a little over $1.85 per man per day, and this price was 60 per cent more than the ruling rate of wages around Bethlehem.
A long series of experiments, coupled with close observation, had demonstrated the fact that when workmen of this caliber are given a carefully measured task, which calls for a big day's work on their part, and that when in return for this extra effort they are paid wages up to 60 per cent beyond the wages usually paid, that this increase in wages tends to make them not only more thrifty but better men in every way; that they live rather better, begin to save money, become more sober, and work more steadily. When, on the other hand, they receive much more than a 60 per cent increase in wages, many of them will work irregularly and tend to become more or less shiftless, extravagant, and dissipated. Our experiments showed, in other words, that it does not do for most men to get rich too fast.
After deciding, for this reason, not to raise the wages of our ore handlers, these men were brought into the office one at a time, and talked to somewhat as follows:
"Now, Patrick, you have proved to us that you are a high-priced man. You have been earning every day a little more than $1.85, and you are just the sort of man that we want to have in our ore-shoveling gang. A man has come here from Pittsburgh, ho is offering 4 9/10 cents per ton for
handling ore while we can pay only 3 9/10 cents per ton. I think, therefore, that you had better apply to this man for a job. Of course, you know we are very sorry to have you leave us, but you have proved yourself a high-priced man, and we are very glad to see you get this chance of earning more money. Just remember, however, that at any time in the future, when you get out of a job, you can always come right back to us. There will always be a job for a high-priced man like you in our
Almost all of the ore handlers took this advice, and went to Pittsburgh, but in about six weeks most of them were again back in Bethlehem unloading ore at the old rate of 3 2/10 cents a ton. The writer had the following talk with one of these men after he had returned:
"Patrick, what are you doing back here? I thought we had gotten rid of you."
"'Well, Sir, I'll tell you how it was. When we got out there Jimmy and I were put on to a car with eight other men. We started to shovel the ore out just the same as we do here. After about half an hour I saw a little devil alongside of me doing pretty near nothing, so I said to him, 'Why don't you go to work? Unless we get the ore out of this car we won't get any money on pay-day.' He turned to me and said, 'Who in ------ are you?'
"'Well,' I said, 'that's none of your business'; and the little devil stood up to me and said, 'You'll be minding your own business, or I'll throw you off this car!' 'Well, I could have spit on him and drowned him, but the rest of the men put down their shovels and looked as if they were going to back him up; so I went round to Jimmy and said (so that the whole gang could hear it), 'Now, Jimmy, you and I will throw a shovel full whenever this little devil throws one, and not another shovel full.' So we watched him, and only shoveled when he shoveled.
"When pay-day came around, though, we had less money than we got here at Bethlehem. After that Jimmy and I went in to the boss, and asked him for a car to ourselves, the same as we got at Bethlehem, but he told us to mind our own business. And when another pay-day came around we had less money than we got here at Bethlehem, so Jimmy and I got the gang together and brought them all back here to work again."
When working each man for himself, these men were able to earn higher wages at 3 2/10 cents a ton than they could earn when they were paid 4 9/10 cents a ton on gang work; and this again shows the great gain which results from working according to even the most elementary of scientific principles. But it also shows that in the application of the most elementary principles it is necessary for the management to do their share of the work in cooperating with the workmen. The Pittsburgh managers knew just how the results had been attained at Bethlehem, but they were unwilling to go to the small trouble and expense required to plan ahead and assign a separate car to each shoveler, and then keep an individual record of each man's work, and pay him just what he had earned.
F.W. Taylor, Scientific Management
F.W. Taylor Scientific Management - With Appropriate Sections
10. Illustrations of Success of Scientific Management - Bricklaying Improvement by Gilbreth
6 July 2016, 4 August 2013