Shop Management Part 4

In principle, these two systems appear to be almost identical, yet this small difference, the slightly milder nature of task work with a bonus, is sufficient to render it much more flexible and therefore applicable to a large number of cases in which the differential rate system cannot be used. Task work with a bonus was invented by Mr. H. L. Gantt, while he was a.s.sisting the writer in organizing the Bethlehem Steel Company.

The possibilities of his system were immediately recognized by all of the leading men engaged on the work, and long before it would have been practicable to use the differential rate, work was started under this plan. It was successful from the start, and steadily grew in volume and in favor, and today is more extensively used than ever before.

Mr. Gantt's system is especially useful during the difficult and delicate period of transition from the slow pace of ordinary day work to the high speed which is the leading characteristic of good management.

During this period of transition in the past, a time was always reached when a sudden long leap was taken from improved day work to some form of piece work; and in making this jump many good men inevitably fell and were lost from the procession. Mr. Gantt's system bridges over this difficult stretch and enables the workman to go smoothly and with gradually accelerated speed from the slower pace of improved day work to the high speed of the new system.

It does not appear that Mr. Gantt has recognized the full advantages to be derived through the proper application of his system during this period of transition, at any rate he has failed to point them out in his papers and to call the attention to the best method of applying his plan in such cases.

No workman can be expected to do a piece of work the first time as fast as he will later. It should also be recognized that it takes a certain time for men who have worked at the ordinary slow rate of speed to change to high speed. Mr. Gantt's plan can be adapted to meet both of these conditions by allowing the workman to take a longer time to do the job at first and yet earn his bonus; and later compelling him to finish the job in the quickest time in order to get the premium. In all cases it is of the utmost importance that each instruction card should state the quickest time in which the workman will ultimately be called upon to do the work. There will then be no temptation for the man to soldier since he will see that the management know accurately how fast the work can be done.

There is also a large cla.s.s of work in addition to that of the period of transition to which task work with a bonus is especially adapted. The higher pressure of the differential rate is the stimulant required by the workman to maintain a high rate of speed and secure high wages while he has the steady swing that belongs to work which is repeated over and over again. When, however, the work is of such variety that each day presents an entirely new task, the pressure of the differential rate is some times too severe. The chances of failing to quite reach the task are greater in this cla.s.s of work than in routine work; and in many such cases it is better, owing to the increased difficulties, that the workman should feel sure at least of his regular day's rate, which is secured him by Mr. Gantt's system in case he falls short of the full task. There is still another case of quite frequent occurrence in which the flexibility of Mr. Gantt's plan makes it the most desirable. In many establishments, particularly those doing an engineering business of considerable variety or engaged in constructing and erecting miscellaneous machinery, it is necessary to employ continuously a number of especially skilful and high-priced mechanics. The particular work for which these men are wanted comes, however, in many cases, at irregular intervals, and there are frequently quite long waits between their especial jobs. During such periods these men must be provided with work which is ordinarily done by less efficient, lower priced men, and if a proper piece price has been fixed on this work it would naturally be a price suited to the less skilful men, and therefore too low for the men in question. The alternative is presented of trying to compel these especially skilled men to work for a lower price than they should receive, or of fixing a special higher piece price for the work. Fixing two prices for the same piece of work, one for the man who usually does it and a higher price for the higher grade man, always causes the greatest feeling of injustice and dissatisfaction in the man who is discriminated against. With Mr. Gantt's plan the less skilledworkman would recognize the justice of paying his more experienced companion regularly a higher rate of wages by the day, yet when they were both working on the same kind of work each man would receive the same extra bonus for doing the full day's task. Thus, with Mr. Gantt's system, the total day's pay of the higher cla.s.sed man would be greater than that of the less skilled man, even when on the same work, and the latter would not begrudge it to him. We may say that the difference is one of sentiment, yet sentiment plays an important part in all of our lives; and sentiment is particularly strong in the workman when he believes a direct injustice is being done him.

Mr. James M. Dodge, the distinguished Past President of The American Society of Mechanical Engineers, has invented an ingenious system of piece work which is adapted to meet this very case, and which has especial advantages not possessed by any of the other plans.

It is clear, then, that in carrying out the task idea after the required knowledge has been obtained through a study of unit times, each of the four systems, (a) day work, (b) straight piece work, (c) task work with a bonus, and (d) differential piece work, has its especial field of usefulness, and that in every large establishment doing a variety of work all four of these plans can and should be used at the same time.

Three of these systems were in use at the Bethlehem Steel Company when the writer left there, and the fourth would have soon been started if he had remained.

Before leaving this part of the book which has been devoted to pointing out the value of. the daily task in management, it would seem desirable to give an ill.u.s.tration of the value of the differential rate piece work and also of the desirability of making each task as simple and short as practicable.

The writer quotes as follows from a paper ent.i.tled "A Piece Rate System," read by him before The American Society of Mechanical Engineers in 1895:

"The first case in which a differential rate was applied during the year 1884, furnishes a good ill.u.s.tration of what can be accomplished by it. A standard steel forging, many thousands of which are used each year, had for several years been turned at the rate of from four to five per day under the ordinary system of piece work, 50 cents per piece being the price paid for the work. After a.n.a.lyzing the job, and determining the shortest time required to do each of the elementary operations of which it was composed, and then summing up the total, the writer became convinced that it was possible to turn ten pieces a day. To finish the forgings at this rate, however, the machinists were obliged to work at their maximum pace from morning to night, and the lathes were run as fast as the tools would allow, and under a heavy feed. Ordinary tempered tools 1 inch by 1 1/2 inch, made of carbon tool steel, were used for this work.

"It will be appreciated that this was a big day's work, both for men and machines, when it is understood that it involved removing, with a single 16-inch lathe, having two saddles, an average of more than 800 lbs of steel chips in ten hours. In place of the 50 cent rate, that they had been paid before, the men were given 35 cents per piece when they turned them at the speed of 10 per day; and when they produced less than ten they received only 25 cents per piece.

"It took considerable trouble to induce the men to turn at this high speed, since they did not at first fully appreciate that it was the intention of the firm to allow them to earn permanently at the rate of $3.50 per day. But from the day they first turned ten pieces to the present time, a period of more than ten years, the men who understood their work have scarcely failed a single day to turn at this rate.

Throughout that time until the beginning of the recent fall in the scale of wages throughout the country, the rate was not cut.

"During this whole period, the compet.i.tors of the company never succeeded in averaging over half of this production per lathe, although they knew and even saw what was being done at Midvale. They, however, did not allow their men to earn from over $2.00 to $2.50 per day, and so never even approached the maximum output.

"The following table will show the economy of paying high wages under the differential rate in doing the above job:

"COST OF PRODUCTION PER LATHE PER DAY

ORDINARY SYSTEM OF PIECE WORK--Man's wages $2.50 Machine cost 3.37 Total cost per day 5.87 5 pieces produced; Cost per piece $1.17

DIFFERENTIAL RATE SYSTEM--Man's wages $3.50 Machine cost 3.37 Total cost per day 6.87 10 pieces produced; Cost per piece $0.69

"The above result was mostly though not entirely due to the differential rate. The superior system of managing all of the small details of the shop counted for considerable."

The exceedingly dull times that began in July, 1893, and were accompanied by a great fall in prices, rendered it necessary to lower the wages of machinists throughout the country. The wages of the men in A. the Midvale Steel Works were reduced at this time, and the change was accepted by them as fair and just.

Throughout the works, however, the principle of the differential rate was maintained, and was, and is still, fully appreciated by both the management and men. Through some error at the time of the general reduction of wages in 1893, the differential rate on the particular job above referred to was removed, and a straight piece work rate of 25 cents per piece was subst.i.tuted for it. The result of abandoning the differential proved to be the best possible demonstration of its value.

Under straight piece work, the output immediately fell to between six and eight pieces per day, and remained at this figure for several years, although under the differential rate it had held throughout a long term of years steadily at ten per day.

When work is to be repeated many times, the time study should be minute and exact. Each job should be carefully subdivided into its elementary operations, and each of these unit times should receive the most thorough time study. In fixing the times for the tasks, and the piece work rates on jobs of this cla.s.s, the job should be subdivided into a number of divisions, and a separate time and price a.s.signed to each division rather than to a.s.sign a single time and price for the whole job. This should be done for several reasons, the most important of which is that the average workman, in order to maintain a rapid pace, should be given the opportunity of measuring his performance against the task set him at frequent intervals. Many men are incapable of looking very far ahead, but if they see a definite opportunity of earning so many cents by working hard for so many minutes, they will avail themselves of it.

As an ill.u.s.tration, the steel tires used on car wheels and locomotives were originally turned in the Midvale Steel Works on piece work, a single piece-work rate being paid for all of the work which could be done on a tire at a single setting. A fixed price was paid for this work, whether there was much or little metal to be removed, and on the average this price was fair to the men. The apparent advantage of fixing a fair average rate was, that it made rate-fixing exceedingly simple, and saved clerk work in the time, cost and record keeping.

A careful time study, however, convinced the writer that for the reasons given above most of the men failed to do their best. In place of the single rate and time for all of the work done at a setting, the writer subdivided tire-turning into a number of short operations, and fixed a proper time and price, varying for each small job, according to the amount of metal to be removed, and the hardness and diameter of the tire. The effect of this subdivision was to increase the output, with the same men, methods, and machines, at least thirty-three per cent.

As an ill.u.s.tration of the minuteness of this subdivision, an instruction card similar to the one used is reproduced in Figure 1 on the next page.

(This card was about 7 inches long by 4 inches wide.)

[Transcriber's note -- Figure 1 not shown]

The cost of the additional clerk work involved in this change was so insignificant that it practically did not affect the problem. This principle of short tasks in tire turning was introduced by the writer in the Midvale Steel Works in 1883 and is still in full use there, having survived the test of over twenty years' trial with a change of management.

In another establishment a differential rate was applied to tire turning, with operations subdivided in this way, by adding fifteen per cent to the pay of each tire turner whenever his daily or weekly piece work earnings pa.s.sed a given figure.

Another ill.u.s.tration of the application of this principle of measuring a man's performance against a given task at frequent intervals to an entirely different line of work may be of interest. For this purpose the writer chooses the manufacture of bicycle b.a.l.l.s in the works of the Symonds Rolling Machine Company, in Fitchburg, Ma.s.s. All of the work done in this factory was subjected to an accurate time study, and then was changed from day to piece work, through the a.s.sistance of functional foreman ship, etc. The particular operation to be described however, is that of inspecting bicycle b.a.l.l.s before they were finally boxed for shipment. Many millions of these b.a.l.l.s were inspected annually. When the writer undertook to systematize this work, the factory had been running for eight or ten years on ordinary day work, so that the various employees were "old hands," and skilled at their jobs. The work of inspection was done entirely by girls--about one hundred and twenty being employed at it--all on day work.

This work consisted briefly in placing a row of small polished steel b.a.l.l.s on the back of the left hand, in the crease between two of the fingers pressed together, and while they were rolled over and over, with the aid of a magnet held in the right hand, they were minutely examined in a strong light, and the defective b.a.l.l.s picked out and thrown into especial boxes. Four kinds of defects were looked for--dented, soft, scratched, and fire cracked--and they were mostly 50 minute as to be invisible to an eye not especially trained to this work. It required the closest attention and concentration. The girls had worked on day work for years, ten and one-half hours per day, with a Sat.u.r.day half-holiday.

The first move before in any way stimulating them toward a larger output was to insure against a falling off in quality. This was accomplished through over-inspection. Four of the most trustworthy girls were given each a lot of b.a.l.l.s which had been examined the day before by one of the regular inspectors. The number identifying the lot having been changed by the foreman so that none of the over-inspectors knew whose work they were examining. In addition, one of the lots inspected by the four over-inspectors was examined on the following day by the chief inspector, selected on account of her accuracy and integrity.

An effective expedient was adopted for checking the honesty and accuracy of the over-inspection. Every two or three days a lot of b.a.l.l.s was especially prepared by the foreman, who counted out a definite number of perfect b.a.l.l.s, and added a recorded number of defective b.a.l.l.s of each kind. The inspectors had no means of distinguishing this lot from the regular commercial lots. And in this way all temptation to slight their work or make false returns was removed.

After insuring in this way against deterioration in quality, effective means were at once adopted to increase the output. Improved day work was subst.i.tuted for the old slipshod method. An accurate daily record, both as to quant.i.ty and quality, was kept for each inspector. In a comparatively short time this enabled the foreman to stir the ambition of all the inspectors by increasing the wages of those who turned out a large quant.i.ty and good quality, at the same time lowering the pay of those who fell short, and discharging others who proved to be incorrigibly slow or careless. An accurate time study was made through the use of a stop watch and record blanks, to determine how fast each kind of inspection should be done. This showed that the girls spent a considerable part of their time in partial idleness, talking and half working, or in actually doing nothing.

Talking while at work was stopped by seating them far apart. The hours of work were shortened from 10 1/2 per day, first to 9 1/2, and later to 8 1/2; a Sat.u.r.day half holiday being given them even with the shorter hours. Two recesses of ten minutes each were given them, in the middle of the morning and afternoon, during which they were expected to leave their seats, and were allowed to talk.

The shorter hours and improved conditions made it possible for the girls to really work steadily, instead of pretending to do so. Piece work was then introduced, a differential rate being paid, not for an increase in output, but for greater accuracy in the inspection; the lots inspected by the over-inspectors forming the basis for the payment of the differential. The work of each girl was measured every hour, and they were all informed whether they were keeping up with their tasks, or how far they had fallen short and an a.s.sistant was sent by the foreman to encourage those who were falling behind, and help them to catch up.

The principle of measuring the performance of each workman against a standard at frequent intervals, of keeping them informed as to their progress, and of sending an a.s.sistant to help those who were falling down, was carried out throughout the works, and proved to be most useful.

The final results of the improved system in the inspecting department were as follows:

(a) Thirty-five girls did the work formerly done by one hundred and twenty.

(b) The girls averaged from $6.50 to $9.00 per week instead of $3.50 to $4.50, as formerly.

(c) They worked only 8 1/2 hours per day, with Sat.u.r.day a half-holiday, while they had formerly worked 10 1/2 hours per day.

(d) An accurate comparison of the b.a.l.l.s which were inspected under the old system of day work with those done under piece work, with over-inspection, showed that, in spite of the large increase in output per girl, there were 58 per cent more defective b.a.l.l.s left in the product as sold under day work than under piece work. In other words, the accuracy of inspection under piece work was one-third greater than that under day work.

That thirty-five girls were able to do the work which formerly required about one hundred and twenty is due, not only to the improvement in the work of each girl, owing to better methods, but to the weeding out of the lazy and unpromising candidates, and the subst.i.tution of more ambitious individuals.

A more interesting ill.u.s.tration of the effect of the improved conditions and treatment is shown in the following comparison. Records were kept of the work of ten girls, all "old hands," and good inspectors, and the improvement made by these skilled hands is undoubtedly entirely due to better management. All of these girls throughout the period of comparison were engaged on the same kind of work, viz.: inspecting bicycle b.a.l.l.s, three-sixteenths of an inch in diameter.

The work of organization began in March, and although the records for the first three months were not entirely clear, the increased output due to better day work amounted undoubtedly to about 33 per cent. The increase per day from June on day work, to July on piece work, the hours each month being 10 1/2 per day, was 37 per cent. This increase was due to the introduction of piece work. The increase per day from July to August (the length of working days in July being 10 1/2 hours, and in August 9 1/2 hours, both months piece work) was 33 per cent.

The increase from August to September (the length of working day in August being 9 1/2 hours, and in September 8 1/2 hours) was 0.08 per cent This means that the girls did practically the same amount of work per day in September, in 8 1/2 hours, that they did in August in 9 1/2 hours.

To summarize: the same ten girls did on an average each day in September, on piece work, when only working 8 1/2 hours per day, 2.42 times as much, or nearly two and one-half times as much, in a day (not per hour, the increase per hour was of course much greater) as they had done when working on day work in March with a working day of 10 1/2 hours. They earned $6.50 to $9.00 per week on piece work, while they had only earned $3.50 to $4.50 on day work. The accuracy of inspection under piece work was one-third greater than under day work.

The time study for this work was done by my friend, Sanford E. Thompson, C. E. who also had the actual management of the girls throughout the period of transition. At this time Mr. H. L. Gantt was general superintendent of the company, and the work of systematizing was under the general direction of the writer. It is, of course, evident that the nature of the organizations required to manage different types of business must vary to an enormous extent, from the simple tonnage works (with its uniform product, which is best managed by a single strong man who carries all of the details in his head and who, with a few comparatively cheap a.s.sistants, pushes the enterprise through to success) to the large machine works, doing a miscellaneous business, with its intricate organization, in which the work of any one man necessarily counts for but little.

It is this great difference in the type of the organization required that so frequently renders managers who have been eminently successful in one line utter failures when they undertake the direction of works of a different kind. This is particularly true of men successful in tonnage work who are placed in charge of shops involving much greater detail.