the instinct of self-preservation acts in connection with them all.
_Almost without exception the interest of workers centers in the wage. If they could retain their accustomed wage with less effort, they would do so. If the retention and increase depend on individual production, they will respond to the compulsion_.
Every student of psychology recognizes the fact that the wage is more than a means of self-preservation. Man is a distinctly social creature. He has a social self as well as an individual self. His social self demands social approval as much as his individual self demands bread, clothing, and shelter. In our present industrial system this social distinc-
tion is most often indicated by means of monetary reward. The laborer not only demands that his toil shall provide the means for self- preservation, but he seeks through his wages the social distinction which he feels to be his due. His desire for increase of wages is often partly, and in some instances mainly, due to his craving for distinction or social approval.
In such instances the wage is to be thought of as something comparable to the score of a ball player. The desire for a high score is sufficient motive to beget the most extreme exertion, even though the reward anticipated is nothing more than a sign of distinction and without any relationship whatever to self- preservation.
In common with some of the lower animals man has an instinct to collect and hoard all sorts of things. This instinct is spoken of in psychology as the hoarding or proprietary instinct. In performing instinctive acts we do so with enthusiasm, but blindly. We take great delight in the performing of the act, even though the ultimate result of the act
may be entirely unknown to us. The squirrel collects and stores nuts with great delight and industry. He has no idea of the approaching winter, but gathers the nuts simply because for him it is the most interesting process in his experience.
Most persons display a like instinctive tendency to make collections and hoard articles.
This is particularly apparent in collections of such things as canceled postage stamps, discarded buttons, pebbles, sticks, magazines, and other non-useful articles.
When this hoarding instinct is not controlled by reason or checked by other interests, we have the miser. In a less degree, we all share with the miser his hoarding instinct. We all like to collect money just as the squirrel likes to gather nuts. The octogenarian continues to collect money with unabated zeal, even though he be childless. He is probably not aware that he is collecting merely for the pleasure of collecting.
_Since the wage is the means ordinarily employed to awaken in workers the three instincts_
_of self-preservation, of social distinction, and of hoarding, it is not strange that an industrial age should regard it as the chief means of increasing efficiency_.
The employer has not attempted to discover what instincts were appealed to by the wage, or the most economical method of stimulating these instincts. He has not undervalued the wage in securing efficiency, but rather has assumed that the service secured must be in direct proportion to the amount expended.
Such an assumption is not warranted.
Of two employers with equal forces and payrolls one may receive much more and better service than the other. It is not a question merely of how much is spent but how wisely it is spent. The wage secures service to the degree in which it awakens these fundamental instincts under consideration.
It is apparent, therefore, that other factors than the amount of money expended in wages are to be considered by every employer. Without increasing the pay roll he may increase the efficiency of his men. The employer who has
determined the number of men he needs and the wages he must pay has only begun to solve his labor problem.
In the preparation of the present chapter a large number of business men were interviewed personally or by correspondence.
One of the questions asked was: "How do you make the most of the wages paid your men?"
As subsidiary to this general question three other questions were asked: "In paying them do you base the amount to be received by each man upon a fixed salary? By some of the men upon actual output--commissions or piecework rates? By some upon a combination including profit-sharing or bonus?"
The answers to these latter questions were not uniform even among employers engaged apparently in the same business and under very similar conditions. Some reported that all the methods suggested were used in their establishment. Factory hands were employed on piecework or on a premium or bonus basis where conditions permitted; office assistants
on fixed salaries; department managers upon a combination including profit sharing. The results reported, however, were far from uniform.
The astounding feature was the diversity of opinion among successful managers of employees. By various houses one or more of the systems had been tried under apparently favorable conditions and had been discarded.
On the other hand each of the systems was advocated by equally successful business firms.
In judging of the relative merits of fixed salaries as compared with other methods the experiences of individual firms offer no certain data. The relative merits and demerits are best disclosed by a psychological analysis of the manner in which the various devices appeal to the employee's instincts and reason.
_When wages are based on commission, piece rate, or a bonus or premium system, the stimulus to action is constantly present. Every stroke of the hammer, every sale made, every figure added, increases the wage. The wage thus continuously beckons the worker to greater accomplishment_.
All other considerations lose in importance, and the mind becomes focused on output.
The worker is blinded to all other motives, and invariably sacrifices quality unless this be guarded by rigid inspection. The piecework or task system thus influences the worker directly and incessantly without regard for the particular instinct to which it may be appealing.
Every increase in rate adds directly to the means of self-preservation, of social distinction, and of the accumulation of wealth.
_The worker with a fixed salary or wage does not feel as continuously the goad of his wage.
It is less in mind and does not control his attitude toward his work. The man on a fixed salary, therefore, will not produce so much_.
If he be a workman, he may take better care of his tools, keep his output up to a higher standard of quality, prepare himself for more responsible positions. If he be a salesman, he may be more considerate of his customers and hence really more valuable to his employer; he may be more loyal to the house and hence
promote the "team work" of the organization, and he may because of his more receptive state of mind be preparing himself for much greater usefulness to his house. If he be a superintendent, he may be more thoughtful of his men, or more scrupulous for the future of the business.
Production methods or labor conditions are often such that piecework is impossible.
There are many functions and processes which thus far have not been satisfactorily adjusted to task systems; there are others (the inspection service in a factory, for instance) where a premium on increased output would defeat the first purpose of the service. Where results can be accurately measured, however, and the quality of the service can be automatically secured or is not sacrificed by concentration upon quantity, the task system--whether it take the form of piece rates, premiums, or bonus--has such superior psychological advantages that it will probably come more and more into use.
Under the general heading quoted above--
"How do you make the most of the wages paid your employees?"--the following question was asked: "What special method do you employ to make men satisfied or pleased with their wages?" The answers were most interesting and instructive. One manager having many thousand men in his organization narrated various methods by which he kept in personal touch with his men, and turned this personal relationship to the advantage of the house.
One illustration will make clear the line he pursued. In the card catalogue of the employees, the birthday of each is noted, the executive recognizing that for the average man this is an anniversary even more important than New Year's.
_If for any reason a member of the organization deserves or requires the executive's personal attention, his birthday may be chosen as the date of the interview. Then whether the man merits an advance for extra good work or needs help to correct a temporary slump in efficiency, the reward or the appeal takes on added meaning_
_because it coincides with a turning point in his life_.
To facilitate the plan, the manager's file of employment cards is arranged, not by initials or departments, but by birthdays.
Each workman's name falls under his eye a few days in advance, long enough to secure a report from his foreman, if knowledge is lacking of his progress.
As I entered this manager's office, I met a young man coming out. He had been in the company's employ only a few months and his relations with the organization had not yet been established. Asked for a report, his foreman gave him a good record and recommended a small advance. Imagine the surprise, the instant access of pride and loyalty, the impulse towards greater effort and efficiency, when the young man was called into the manager's office on his birthday, congratulated on his record, and informed that he would start his new year with an advance in wages.
Double the advance, if allowed in the usual way, would not have so impressed and satisfied
him. The increased wage made its appeal direct to the instinct for social recognition, and hence was very effective.
Such a method does not admit of general application. Practiced in cold blood, it might even be harmful. But in this case, it struck me not as an act of selfish cleverness, but as the expression of a real sympathy and interest which the manager felt for his men. The cleverness lay in the recognition that no man is ever so susceptible to counsel, to appreciation, or to rebuke as on his birthday, when the social self is especially alert.
In other organizations, the effort to extend this factor of human sympathy to each worker and to see that full justice is rendered to him takes the form of a department of promotion and discharge. The head is the direct representative of the "front office" and is independent of superintendents and foremen. No man can be "paid off" until the facts have been submitted to the consideration of this department.
Here also the man may present his case to an unprejudiced and sympathetic arbiter.
_In actual practice the man "paid off" is sometimes retained and the foreman, on the evidence of prejudice, bad temper, or other incompetency, is discharged. In consequence every workman knows that his place does not depend upon the whim of his immediate superior, but that faithful service will certainly be recognized_.
Furthermore, this department assumes the task of shifting men from one department to another and thus minimizing the misfits which lower the efficiency of the whole organization.
Records of each man's performance are kept, and promotions and discharge are more nearly in accord with facts than would be possible in a large house without some such agency. In too many big establishments the individual feels that he does not count in the crowd and that he is helpless to do anything to advance himself or to protect himself against an antagonistic foreman. In large measure, such a department reduces this feeling and bridges the chasm between the men and the firm.
In its effect on the attitude and efficiency of employees, the method of fixing and ad-
justing wages is no less important than the wages themselves. The steady trend of the labor market has been upward and always upward; it is one of the notable achievements of trade and industry that this constant appreciation in the price of man power has been neutralized by increase in the efficiency of its application. This increase in earning capacity has been secured not alone by the development of automatic machinery, but by the division of labor, the subdivision of processes, and the education of workers to accept the new methods, and acquire expert skill in some specialty.
Hardly a generation has passed since one man, or perhaps two working together, built farm wagons, steam engines, and a thousand other articles entire. Now a hundred mechanics or machine tenders may have contributed to either wagon or engine before it reaches the shipping department. Three fourths of these workers are paid piece rates.
The substitution of these piece rates for day wages, the striking of a satisfactory balance between production and compensation, and
the endless changes in the scale as new parts or faster or simpler processes are invented-- have all been operations in which the tact and man-handling skill of executives have played a significant part.
In the larger organization this knowledge or skill is often supplied by a manager who has "come up through the ranks" and has not forgotten his journeyman's dexterity on the way or neglected to keep in touch with improved methods.
_Frequently the advantage of a small industry or trading venture over its larger rivals depends on the owner's mastery of all the processes or conditions involved and his ability to deal with his employees on a personal plane in fixing wages or in establishing the standard day's work_.
In a stove factory where four fifths of the processes are paid by piece rates, it was necessary, not long ago, to fix the remuneration for the assembling of a new type of range. Most of the operations were standard; the workmen and the management differed, however, on what should be paid for the setting and fas-
tening of a back piece with seventeen bolts.
The men asked fifteen cents a range. When refused, they named twelve cents as an ultimatum.
The company was willing neither to pay such a price nor to antagonize the workmen.
The dispute was settled by a demonstration.
The superintendent was himself a graduate from the bench and had been an expert workman.
The company's contract with the assemblers'
union set $4.50 a day as the maximum wage. To prove his contention that even twelve cents was too great a price, he set the back pieces on ten ranges himself, under the eyes of a committee, and proved that at six cents a range he could easily earn the maximum day wage. The price agreed upon was eight cents, little more than half the original demand. Without the demonstration the men would have accepted twelve cents reluctantly.
In the course of the interviews with employers, it became evident that there was agreement on one point--to educate the worker to realize that the house's policy in
handling its men gave added value to the sums paid out in wages.
_The shiftless or unskilled man works mainly for the next pay envelope, with little or no regard for the continuity of employment, the possibility of promotion, of pension, of sick or accident benefits, of working conditions, or the like_.
The skilled worker, on the contrary, and the more desirable class of laborers, nearly always rate their wages above or below par, according to the presence or the absence of these contingent benefits or emoluments.