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- Shop Management - 6/24 -


instead of gang work came to our attention at Bethlehem. Several of the best piece workers among the Bethlehem yard laborers were informed by their friends that a much higher price per ton was paid for shoveling ore in another works than the rate given at Bethlehem. After talking the matter over with the writer he advised them to go to the other works, which they accordingly did. In about a month they were all back at work in Bethlehem again, having found that at the other works they were obliged to work with a gang of men instead of on individual piece work, and that the rest of the gang worked so slowly that in spite of the high price paid per ton they earned much less than Bethlehem.

Table 1, on page 54, gives a summary of the work done by the piece-work laborers in handling raw materials, such as ores, anthracite and bituminous coal, coke, pig-iron, sand, limestone, cinder, scale, ashes, etc., in the works of the Bethlehem Steel Company, during the year ending April 30, 1900. This work consisted mainly in loading and unloading cars on arrival or departure from the works, and for local transportation, and was done entirely by hand, i.e., without the use of cranes or other machinery.

The greater part of the credit for making the accurate time study and actually managing the men on this work should be given to Mr. A. B. Wadleigh, the writer's assistant in this section at that time.

TABLE 1. -SHOWING RELATIVE COST OF YARD LABOR UNDER TASK PIECE WORK AND OLD STYLE DAY WORK

[Transcriber's note -- table 1 omitted]

When the writer left the steel works, the Bethlehem piece workers were the finest body of picked laborers that he has ever seen together. They were practically all first-class men, because in each case the task which they were called upon to perform was such that only a first-class man could do it. The tasks were all purposely made so severe that not more than one out of five laborers (perhaps even a smaller percentage than this) could keep up.

[Footnotes to table 1]

1) It was our intention to fix piece work rates which should enable first-class workmen to average about 60 per cent more than they had been earning on day work, namely $1.85 per day. A year's average shows them to have earned $1.88 per day, or three cents per man per day more than we expected--an error of 1 6/10 per cent.

2) The piece workers handled on an average 3 56/100 times as many tons per day as the day workers.

[end footnotes to table 1]

It was clearly understood by each newcomer as he went to work that unless he was able to average at least $1.85 per day he would have to make way for another man who could do so. As a result, first-class men from all over that part of the country, who were in most cases earning from $1.05 to $1.15 per day, were anxious to try their hands at earning $1.85 per day. If they succeeded they were naturally contented, and if they failed they left, sorry that they were unable to maintain the proper pace, but with no hard feelings either toward the system or the management. Throughout the time that the writer was there, labor was as scarce and as difficult to get as it ever has been in the history of this country, and yet there was always a surplus of first-class men ready to leave other jobs and try their hand at Bethlehem piece work.

Perhaps the most notable difference between these men and ordinary piece workers lay in their changed mental attitude toward their employers and their work, and in the total absence of soldiering on their part. The ordinary piece worker would have spent a considerable part of his time in deciding just how much his employer would allow him to earn without cutting prices and in then trying to come as close as possible to this figure, while carefully guarding each job so as to keep the management from finding out how fast it really could be done. These men, however, were faced with a new but very simple and straightforward proposition, namely, am I a first-class laborer or not? Each man felt that if he belonged in the first class all he had to do was to work at his best and he would be paid sixty per cent more than he had been paid in the past. Each piece work price was accepted by the men without question. They never bargained over nor complained about rates, and there was no occasion to do so, since they were all equally fair, and called for almost exactly the same amount of work and fatigue per dollar of wages.

A careful inquiry into the condition of these men when away from work developed the fact that out of the whole gang 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. The results attained under this system were most satisfactory both to employer and workmen, and show in a convincing way the possibility of uniting high wages with a low labor cost.

This is virtually a labor union of first-class men, who are united together to secure the extra high wages, which belong to them by right and which in this case are begrudged them by none, and which will be theirs through dull times as well as periods of activity. Such a union commands the unqualified admiration and respect of all classes of the community; the respect equally of workmen, employers, political economists, and philanthropists. There are no dues for membership, since all of the expenses are paid by the company. The employers act as officers of the Union, to enforce its rules and keep its records, since the interests of the company are identical and bound up with those of the men. It is never necessary to plead with, or persuade men to join this Union, since the employers themselves organize it free of cost; the best workmen in the community are always anxious to belong to it. The feature most to be regretted about it is that the membership is limited.

The words "labor union" are, however, unfortunately so closely associated in the minds of most people with the idea of disagreement and strife between employers and men that it seems almost incongruous to apply them to this case. Is not this, however, the ideal "labor union," with character and special ability of a high order as the only qualifications for membership.

It is a curious fact that with the people to whom the writer has described this system, the first feeling, particularly among those more philanthropically inclined, is one of pity for the inferior workmen who lost their jobs in order to make way for the first-class men. This sympathy is entirely misplaced. There was such a demand for labor at the time that no workman was obliged to be out of work for more than a day or two, and so the poor workmen were practically as well off as ever. The feeling, instead of being one of pity for the inferior workmen, should be one of congratulation and rejoicing that many first-class men--who through unfortunate circumstances had never had the opportunity of proving their worth--at last were given the chance to earn high wages and become prosperous.

What the writer wishes particularly to emphasize is that this whole system rests upon an accurate and scientific study of unit times, which is by far the most important element in scientific management. With it, greater and more permanent results can be attained even under ordinary day work or piece work than can be reached under any of the more elaborate systems without it.

In 1895 the writer read a paper before The American Society of Mechanical Engineers entitled "A Piece Rate System." His chief object in writing it was to advocate the study of unit times as the foundation of good management. Unfortunately, he at the same time described the "differential rate" system of piece work, which had been introduced by him in the Midvale Steel Works. Although he called attention to the fact that the latter was entirely of secondary importance, the differential rate was widely discussed in the journals of this country and abroad while practically nothing was said about the study of "unit times." Thirteen members of the Society discussed the piece rate system at length, and only two briefly referred to the study of the "unit times."

The writer most sincerely trusts that his leading object in writing this book will not be overlooked, and that scientific time study will receive the attention which it merits. Bearing in mind the Bethlehem yard labor as an illustration of the application of the study of unit times as the foundation of success in management, the following would seem to him a fair comparison of the older methods with the more modern plan.

For each job there is the quickest time in which it can be done by a first-class man. This time may be called the "quickest time," or the "standard time" for the job. Under all the ordinary systems, this "quickest time" is more or less completely shrouded in mist. In most cases, however, the workman is nearer to it and sees it more clearly than the employer.

Under ordinary piece work the management watch every indication given them by the workmen as to what the "quickest time" is for each job, and endeavor continually to force the men toward this "standard time," while the workmen constantly use every effort to prevent this from being done and to lead the management in the wrong direction. In spite of this conflict, however, the "standard time" is gradually approached.

Under the Towne-Halsey plan the management gives up all direct effort to reach this "quickest time," but offers mild inducements to the workmen to do so, and turns over the whole enterprise to them. The workmen, peacefully as far as the management is concerned, but with considerable pulling and hauling among themselves, and without the assistance of a trained guiding hand, drift gradually and slowly in the direction of the "standard time," but rarely approach it closely.

With accurate time study as a basis, the "quickest time" for each job is at all times in plain sight of both employers and workmen, and is reached with accuracy, precision, and speed, both sides pulling hard in the same direction under the uniform simple and just agreement that whenever a first-class man works his best he will receive from 30 to 100 per cent more than the average of his trade.

Probably a majority of the attempts that are made to radically change the organization of manufacturing companies result in a loss of money to the company, failure to bring about the change sought for, and a return to practically the original organization. The reason for this being that there are but few employers who look upon management as an art, and that they go at a difficult task without either having understood or appreciated the time required for organization or its cost, the troubles to be met with, or the obstacles to be overcome, and without having studied the means to be employed in doing so.

Before starting to make any changes in the organization of a company the following matters should be carefully considered: First, the importance of choosing the general type of management best suited to the particular case. Second, that in all cases money must be spent, and in many cases a great deal of money, before the changes are completed which result in lowering cost. Third, that it takes time to reach any result worth aiming at. Fourth, the importance of making changes in their proper order, and that unless the right steps are taken, and taken in their


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