Of all the ordinary systems of management in use (in which no accurate scientific study of the time problem is undertaken, and no carefully measured tasks are assigned to the men which must be ccomplished in a given time) the best is the plan fundamentally originated by Mr. Henry R. Towne, and improved and made practical by Mr. F. A. Halsey. This plan is described in papers read by Mr. Towne before The American Society of Mechanical Engineers in 1886, and by Mr. Halsey in 1891, and has since been criticized and ably defended in a series of articles appearing in the "American Machinist."
The Towne-Halsey plan consists in recording the quickest time in which a job has been done, and fixing this as a standard. If the workman succeeds in doing the job in a shorter time, he is still paid his same wages per hour for the time he works on the job, and in addition is given a premium for having worked faster, consisting of from one-quarter to one-half the difference between the wages earned and the wages originally paid when the job was done in standard time. Mr. Halsey recommends the payment of one third of the difference as the best premium for most cases. The difference between this system and ordinary piece work is that the workman on piece work gets the whole of the
difference between the actual time of a job and the standard time, while under the Towne-Halsey plan he gets only a fraction of this difference.
It is not unusual to hear the Towne-Halsey plan referred to as practically the same as piece work. This is far from the truth, for while the difference between the two does not appear to a casual observer to be great, and the general principles of the two seem to be the same, still we all know that success or failure in many cases hinges upon small differences.
In the writer's judgment, the Towne-Halsey plan is a great invention, and, like many other great inventions, its value lies in its simplicity.
This plan has already been successfully adopted by a large number of establishments, and has resulted in giving higher wages to many workmen, accompanied by a lower labor cost to the employer, and at the same time materially improving their relations by lessening the feeling of
antagonism between the two.
This system is successful because it diminishes soldiering, and this rests entirely upon the fact that since the workman only receives say one-third of the increase in pay that he would get under corresponding conditions on piece work, there is not the same temptation for the employer to cut prices.
After this system has been in operation for a year or two, if no cuts in prices have been made, the tendency of the men to soldier on that portion of the work which is being done under the system is diminished, although it does not entirely cease. On the other hand, the tendency of the men to soldier on new work which is started, and on such portions as are still done on day work, is even greater under the Towne-Halsey plan than under piece work.
To illustrate: Workmen, like the rest of mankind, are more strongly influenced by object lessons than by theories. The effect on men of such an object lesson as the following will be apparent. Suppose that two men, named respectively Smart and Honest, are at work by the day and receive the same pay, say 20 cents per hour. Each of these men is given a new piece of work which could be done in one hour. Smart does his job in four hours (and it is by no means unusual for men to soldier to this
extent). Honest does his in one and one-half hours.
Now, when these two jobs start on this basis under the Towne-Halsey plan and are ultimately done in one hour each, Smart receives for his job 20 cents per hour + a premium of 20 cents = a total of 40 cents. Honest receives for his job 20 cents per hour + a premium of 3 1/8 cents = a total of 23 1/8 cents.
Most of the men in the shop will follow the example of Smart rather than that of Honest and will "soldier" to the extent of three or four hundred per cent if allowed to do so. The Towne-Halsey system shares with ordinary piece work then, the greatest evil of the latter, namely that its very foundation rests upon deceit, and under both of these systems there is necessarily, as we have seen, a great lack of justice and equality in the starting-point of different jobs.
Some of the rates will have resulted from records obtained when a first-class man was working close to his maximum speed, while others will be based on the performance of a poor man at one-third or one quarter speed.
The injustice of the very foundation of the system is thus forced upon the workman every day of his life, and no man, however kindly disposed he may be toward his employer, can fail to resent this and be seriously influenced by it in his work. These systems are, therefore, of necessity slow and irregular in their operation in reducing costs. They "drift" gradually toward an increased output, but under them the attainment of the maximum output of a first-class man is almost impossible.
Objection has been made to the use of the word "drifting" in this connection. It is used absolutely without any intention of slurring the Towne-Halsey system or in the least detracting from its true merit.
It appears to me, however, that "drifting" very accurately describes it, for the reason that the management, having turned over the entire control of the speed problem to the men, the latter being influenced by their prejudices and whims, drift sometimes in one direction and sometimes in another; but on the whole, sooner or later, under the stimulus of the premium, move toward a higher rate of speed. This drifting, accompanied as it is by the irregularity and uncertainty both as to the final result which will be attained and as to how long it will take to reach this end, is in marked contrast to the distinct goal which is always kept in plain sight of both parties under task management, and the clear-cut directions which leave no doubt as to the means which are to be employed nor the time in which the work must be done; and these elements constitute the fundamental difference between the two systems.
Mr. Halsey, in objecting to the use of the word "drifting" as describing
his system, has referred to the use of his system in England in
connection with a "rate-fixing" or planning department, and quotes as
follows from his paper to show that he contemplated control of the speed
of the work by the management:
"On contract work undertaken for the first time the method is the same
except that the premium is based on the estimated time for the execution
of the work."
In making this claim Mr. Halsey appears to have entirely lost sight of
the real essence of the two plans. It is task management which is in use
in England, not the Towne-Halsey system; and in the above quotation Mr.
Halsey describes not his system but a type of task management, in which
the men are paid a premium for carrying out the directions given them by
There is no doubt that there is more or less confusion in the minds of
many of those who have read about the task management and the
Towne-Halsey system. This extends also to those who are actually using
and working under these systems. This is practically true in England,
where in some cases task management is actually being used under the
name of the "Premium Plan." It would therefore seem desirable to
indicate once again and in a little different way the essential
difference between the two.
The one element which the Towne-Halsey system and task management have
in common is that both recognize the all-important fact that workmen
cannot be induced to work extra hard without receiving extra pay. Under
both systems the men who succeed are daily and automatically, as it
were, paid an extra premium. The payment of this daily premium forms
such a characteristic feature in both systems, and so radically
differentiates these systems from those which were in use before, that
people are apt to look upon this one element as the essence of both
systems and so fail to recognize the more important, underlying
principles upon which the success of each of them is based.
In their essence, with the one exception of the payment of a daily
premium, the systems stand at the two opposite extremes in the field of
management; and it is owing to the distinctly radical, though opposite,
positions taken by them that each one owes its success; and it seems to
me a matter of importance that this should be understood. In any
executive work which involves the cooperation of two different men or
parties, where both parties have anything like equal power or voice in
its direction, there is almost sure to be a certain amount of bickering,
quarreling, and vacillation, and the success of the enterprise suffers
accordingly. If, however, either one of the parties has the entire
direction, the enterprise will progress consistently and probably
harmoniously, even although the wrong one of the two parties may be in
Broadly speaking, in the field of management there are two parties--the
superintendents, etc., on one side and the men on the other, and the
main questions at issue are the speed and accuracy with which the work
shall be done. Up to the time that task management was introduced in the
Midvale Steel Works, it can be fairly said that under the old systems of
management the men and the management had about equal weight in deciding
how fast the work should be done. Shop records showing the quickest time
in which each job had been done and more or less shrewd guessing being
the means on which the management depended for bargaining with and
coercing the men; and deliberate soldiering for the purpose of
misinforming the management being the weapon used by the men in
self-defense. Under the old system the incentive was entirely lacking
which is needed to induce men to cooperate heartily with the management
in increasing the speed with which work is turned out. It is chiefly
due, under the old systems, to this divided control of the speed with
which the work shall be done that such an amount of bickering,
quarreling, and often hard feeling exists between the two sides.