Shop Management Part 1

Shop Management.

by Frederick Winslow Taylor.

Through his business in changing the methods of shop management, the writer has been brought into intimate contact over a period of years with the organization of manufacturing and industrial establishments, covering a large variety and range of product, and employing workmen in many of the leading trades.

In taking a broad view of the field of management, the two facts which appear most noteworthy are:

(a) What may be called the great unevenness, or lack of uniformity shown, even in our best run works, in the development of the several elements, which together const.i.tute what is called the management.

(b) The lack of apparent relation between good shop management and the payment of dividends.

Although the day of trusts is here, still practically each of the component companies of the trusts was developed and built up largely through the energies and especial ability of some one or two men who were the master spirits in directing its growth. As a rule, this leader rose from a more or less humble position in one of the departments, say in the commercial or the manufacturing department, until he became the head of his particular section. Having shown especial ability in his line, he was for that reason made manager of the whole establishment.

In examining the organization of works of this cla.s.s, it will frequently be found that the management of the particular department in which this master spirit has grown up towers to a high point of excellence, his success having been due to a thorough knowledge of all of the smallest requirements of his section, obtained through personal contact, and the gradual training of the men under him to their maximum efficiency.

The remaining departments, in which this man has had but little personal experience, will often present equally glaring examples of inefficiency.

And this, mainly because management is not yet looked upon as an art, with laws as exact, and as clearly defined, for instance, as the fundamental principles of engineering, which demand long and careful thought and study. Management is still looked upon as a question of men, the old view being that if you have the right man the methods can be safely left to him.

The following, while rather an extreme case, may still be considered as a fairly typical ill.u.s.tration of the unevenness of management. It became desirable to combine two rival manufactories of chemicals. The great obstacle to this combination, however, and one which for several years had proved insurmountable was that the two men, each of whom occupied the position of owner and manager of his company, thoroughly despised one another. One of these men had risen to the top of his works through the office at the commercial end, and the other had come up from a workman in the factory. Each one was sure that the other was a fool, if not worse. When they were finally combined it was found that each was right in his judgment of the other in a certain way. A comparison of their books showed that the manufacturer was producing his chemicals more than forty per cent cheaper than his rival, while the business man made up the difference by insisting on maintaining the highest quality, and by his superiority in selling, buying, and the management of the commercial side of the business. A combination of the two, however, finally resulted in mutual respect, and saving the forty per cent formerly lost by each man.

The second fact that has struck the writer as most noteworthy is that there is no apparent relation in many, if not most cases, between good shop management and the success or failure of the company, many unsuccessful companies having good shop management while the reverse is true of many which pay large dividends.

We, however, who are primarily interested in the shop, are apt to forget that success, instead of hinging upon shop management, depends in many cases mainly upon other elements, namely,--the location of the company, its financial strength and ability, the efficiency of its business and sales departments, its engineering ability, the superiority of its plant and equipment, or the protection afforded either by patents, combination, location or other partial monopoly.

And even in those cases in which the efficiency of shop management might play an important part it must be remembered that for success no company need be better organized than its compet.i.tors.

The most severe trial to which any system can be subjected is that of a business which is in keen compet.i.tion over a large territory, and in which the labor cost of production forms a large element of the expense, and it is in such establishments that one would naturally expect to find the best type of management.

Yet it is an interesting fact that in several of the largest and most important cla.s.ses of industries in this country shop practice is still twenty to thirty years behind what might be called modern management.

Not only is no attempt made by them to do tonnage or piece work, but the oldest of old-fas.h.i.+oned day work is still in vogue under which one overworked foreman manages the men. The workmen in these shops are still herded in cla.s.ses, all of those in a cla.s.s being paid the same wages, regardless of their respective efficiency.

In these industries, however, although they are keenly compet.i.tive, the poor type of shop management does not interfere with dividends, since they are in this respect all equally bad.

It would appear, therefore, that as an index to the quality of shop management the earning of dividends is but a poor guide.

Any one who has the opportunity and takes the time to study the subject will see that neither good nor bad management is confined to any one system or type. He will find a few instances of good management containing all of the elements necessary for permanent prosperity for both employers and men under ordinary day work, the task system, piece work, contract work, the premium plan, the bonus system and the differential rate; and he will find a very much larger number of instances of bad management under these systems containing as they do the elements which lead to discord and ultimate loss and trouble for both sides.

If neither the prosperity of the company nor any particular type or system furnishes an index to proper management, what then is the touchstone which indicates good or bad management?

The art of management has been defined, "as knowing exactly what you want men to do, and then seeing that they do it in the best and cheapest way.'" No concise definition can fully describe an art, but the relations between employers and men form without question the most important part of this art. In considering the subject, therefore, until this part of the problem has been fully discussed, the other phases of the art may be left in the background.

The progress of many types of management is punctuated by a series of disputes, disagreements and compromises between employers and men, and each side spends more than a considerable portion of its time thinking and talking over the injustice which it receives at the hands of the other. All such types are out of the question, and need not be considered.

It is safe to say that no system or scheme of management should be considered which does not in the long run give satisfaction to both employer and employee, which does not make it apparent that their best interests are mutual, and which does not bring about such thorough and hearty cooperation that they can pull together instead of apart. It cannot be said that this condition has as yet been at all generally recognized as the necessary foundation for good management. On the contrary, it is still quite generally regarded as a fact by both sides that in many of the most vital matters the best interests of employers are necessarily opposed to those of the men. In fact, the two elements which we will all agree are most wanted on the one hand by the men and on the other hand by the employers are generally looked upon as antagonistic.

What the workmen want from their employers beyond anything else is high wages, and what employers want from their workmen most of all is a low labor cost of manufacture.

These two conditions are not diametrically opposed to one another as would appear at first glance. On the contrary, they can be made to go together in all cla.s.ses of work, without exception, and in the writer's judgment the existence or absence of these two elements forms the best index to either good or bad management.

This book is written mainly with the object of advocating high wages and low labor cost as the foundation of the best management, of pointing out the general principles which render it possible to maintain these conditions even under the most trying circ.u.mstances, and of indicating the various steps which the writer thinks should be taken in changing from a poor system to a better type of management.

The condition of high wages and low labor cost is far from being accepted either by the average manager or the average workman as a practical working basis. It is safe to say that the majority of employers have a feeling of satisfaction when their workmen are receiving lower wages than those of their compet.i.tors. On the other hand very many workmen feel contented if they find themselves doing the same amount of work per day as other similar workmen do and yet are getting more pay for it. Employers and workmen alike should look upon both of these conditions with apprehension, as either of them are sure, in the long run, to lead to trouble and loss for both parties.

Through unusual personal influence and energy, or more frequently through especial conditions which are but temporary, such as dull times when there is a surplus of labor, a superintendent may succeed in getting men to work extra hard for ordinary wages. After the men, however, realize that this is the case and an opportunity comes for them to change these conditions, in their reaction against what they believe unjust treatment they are almost sure to lean so far in the other direction as to do an equally great injustice to their employer.

On the other hand, the men who use the opportunity offered by a scarcity of labor to exact wages higher than the average of their cla.s.s, without doing more than the average work in return, are merely laying up trouble for themselves in the long run. They grow accustomed to a high rate of living and expenditure, and when the inevitable turn comes and they are either thrown out of employment or forced to accept low wages, they are the losers by the whole transaction.

The only condition which contains the elements of stability and permanent satisfaction is that in which both employer and employees are doing as well or better than their compet.i.tors are likely to do, and this in nine cases out of ten means high wages and low labor cost, and both parties should be equally anxious for these conditions to prevail.

With them the employer can hold his own with his compet.i.tors at all times and secure sufficient work to keep his men busy even in dull times. Without them both parties may do well enough in busy times, but both parties are likely to suffer when work becomes scarce.

The possibility of coupling high wages with a low labor cost rests mainly upon the enormous difference between the amount of work which a first-cla.s.s man can do under favorable circ.u.mstances and the work which is actually done by the average man.

That there is a difference between the average and the first-cla.s.s man is known to all employers, but that the first-cla.s.s man can do in most cases from two to four times as much as is done by an average man is known to but few, and is fully realized only by those who have made a thorough and scientific study of the possibilities of men.

The writer has found this enormous difference between the first-cla.s.s and average man to exist in all of the trades and branches of labor which he has investigated, and these cover a large field, as he, together with several of his friends, has been engaged with more than usual opportunities for thirty years past in carefully and systematically studying this subject.

The difference in the output of first-cla.s.s and average men is as little realized by the workmen as by their employers. The first-cla.s.s men know that they can do more work than the average, but they have rarely made any careful study of the matter. And the writer has over and over again found them utterly incredulous when he informed them, after close observation and study, how much they were able to do. In fact, in most cases when first told that they are able to do two or three times as much as they have done they take it as a joke and will not believe that one is in earnest.

It must be distinctly understood that in referring to the possibilities of a first-cla.s.s man the writer does not mean what he can do when on a spurt or when he is over-exerting himself, but what a good man can keep up for a long term of years without injury to his health. It is a pace under which men become happier and thrive.

The second and equally interesting fact upon which the possibility of coupling high wages with low labor cost rests, is that first-cla.s.s men are not only willing but glad to work at their maximum speed, providing they are paid from 30 to 100 per cent more than the average of their trade.

The exact percentage by which the wages must be increased in order to make them work to their maximum is not a subject to be theorized over, settled by boards of directors sitting in solemn conclave, nor voted upon by trades unions. It is a fact inherent in human nature and has only been determined through the slow and difficult process of trial and error.

The writer has found, for example, after making many mistakes above and below the proper mark, that to get the maximum output for ordinary shop work requiring neither especial brains, very close application, skill, nor extra hard work, such, for instance, as the more ordinary kinds of routine machine shop work, it is necessary to pay about 30 per cent more than the average. For ordinary day labor requiring little brains or special skill, but calling for strength, severe bodily exertion, and fatigue, it is necessary to pay from 50 per cent to 60 per cent above the average. For work requiring especial skill or brains, coupled with close application, but without severe bodily exertion, such as the more difficult and delicate machinist's work, from 70 per cent to 80 per cent beyond the average. And for work requiring skill, brains, close application, strength, and severe bodily exertion, such, for instance, as that involved in operating a well run steam hammer doing miscellaneous work, from 80 per cent to 100 per cent beyond the average.

There are plenty of good men ready to do their best for the above percentages of increase, but if the endeavor is made to get the right men to work at this maximum for less than the above increase, it will be found that most of them will prefer their old rate of speed with the lower pay. After trying the high speed piece work for a while they will one after another throw up their jobs and return to the old day work conditions. Men will not work at their best unless a.s.sured a good liberal increase, which must be permanent.

It is the writer's judgment, on the other hand, that for their own good it is as important that workmen should not be very much over-paid, as it is that they should not be under-paid. If over-paid, many will work irregularly and tend to become more or less s.h.i.+ftless, extravagant, arid dissipated. It does not do for most men to get rich too fast. The writer's observation, however, would lead him to the conclusion that most men tend to become more instead of less thrifty when they receive the proper increase for an extra hard day's work, as, for example, the percentages of increase referred to above. They live rather better, begin to save money, become more sober, and work more steadily. And this certainly forms one of the strongest reasons for advocating this type of management.

In referring to high wages and low labor cost as fundamental in good management, the writer is most desirous not to be misunderstood.

By high wages he means wages which are high only with relation to the average of the cla.s.s to which the man belongs and which are paid only to those who do much more or better work than the average of their cla.s.s.

He would not for an instant advocate the use of a high-priced tradesman to do the work which could be done by a trained laborer or a lower-priced man. No one would think of using a fine trotter to draw a grocery wagon nor a Percheron to do the work of a little mule. No more should a mechanic be allowed to do work for which a trained laborer can be used, and the writer goes so far as to say that almost any job that is repeated over and over again, however great skill and dexterity it may require, providing there is enough of it to occupy a man throughout a considerable part of the year, should be done by a trained laborer and not by a mechanic. A man with only the intelligence of an average laborer can be taught to do the most difficult and delicate work if it is repeated enough times; and his lower mental caliber renders him more fit than the mechanic to stand the monotony of repet.i.tion. It would seem to be the duty of employers, therefore, both in their own interest and in that of their employees, to see that each workman is given as far as possible the highest cla.s.s of work for which his brains and physique fit him. A man, however, whose mental caliber and education do not fit him to become a good mechanic (and that grade of man is the one referred to as belonging to the "laboring cla.s.s"), when he is trained to do some few especial jobs, which were formerly done by mechanics, should not expect to be paid the wages of a mechanic. He should get more than the average laborer, but less than a mechanic; thus insuring high wages to the workman, and low labor cost to the employer, and in this way making it most apparent to both that their interests are mutual.

To summarize, then, what the aim in each establishment should be:

(a) That each workman should be given as far as possible the highest grade of work for which his ability and physique fit him.

(b) That each workman should be called upon to turn out the maximum amount of work which a first-rate man of his cla.s.s can do and thrive.

(c) That each workman, when he works at the best pace of a first-cla.s.s man, should be paid from 30 per cent to 100 per cent according to the nature of the work which he does, beyond the average of his cla.s.s.

And this means high wages and a low labor cost. These conditions not only serve the best interests of the employer, but they tend to raise each workman to the highest level which he is fitted to attain by making him use his best faculties, forcing him to become and remain ambitious and energetic, and giving him sufficient pay to live better than in the past.

Under these conditions the writer has seen many first-cla.s.s men developed who otherwise would have remained second or third cla.s.s all of their lives.

Is not the presence or absence of these conditions the best indication that any system of management is either well or badly applied? And in considering the relative merits of different types of management, is not that system the best which will establish these conditions with the greatest certainty, precision, and speed?