THE MARTIN P. CATHERWOOD LIBRARY OF THE NEW YORK STATE SCHOOL OF INDUSTRIAL AND LABOR RELATIONS AT CORNELL UNIVERSITY ^\SCK^ m^ The original of tliis book is in tlie Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924055920023 HANDLING MEN ; //' SELECTING AND HIRING ^ HOW TO HOLD YOUR MEN BREAKING IN AND DEVELOPING MEN- PUTTING MORE THAN MONEY IN PAY ENVELOPES A. W. SHAW COMPANY CHICAGO NEW YORK/) \^ LONDON Copyright^ 1917, by A. W. SHAW COMPANY PBDfTED IN C. S. A. H3I5 CONTENTS I— SELECTING AND HIRING Editorial by John Wanainaker .....■•• 7 I How We Lifted Hiring Out op the Rut . - 9 By A. K. Baer. Secretary-Treasurer, Strouse-Baer Co. II Living Up to Your Employment System . . 13 By Carroll D. Murphy Based on an ^tensive investigation III When Yotjr Men Help You Hire .... 24 By Charles Harris Based on an extensive investigation IV The Man For the Job 31 By Carroll D. Murphy Based on an extensive investigation V Why We Are Replacing Men With Women . 47 An Interview with Will I. Ommer^ ^ President, Recording and Computing Machines Company II— HOW TO HOLD YOUR MEN Editorial by Frank Diaston ■■.■•■•• 57 VI The Knack of Holding Your Men ... 59 By Henry L. Willard. President of the Brooklyn Traffic Club VII How We Hold Our Men .,*... 67 By Frank Disston, President of Henry Disston & Sons, Incorporated VIII There's a Solution Fob Labor Troubles . . 82 An Interview with John D. Rodcefeller, Jr. By Samuel Crowther IX The High Cost of Labor That Comes and Goes . 91 By Leon I. Thomas Based on an extensive investigation X Keep In Touch With John and Jim . . . 103 The Views of 63 Executives, with an Introduction by William Cordes, General Manager of the Florence Manufacturing Company CONTENTS III— BREAKING IN AND DEVELOPING MEN MitoriaX hy Edward B. Butler 119 XI Fitting Instead of Firing Men . . . . 121 By W. S. Ball Based on an extensive investigation XII "Growing" Your Own Executives . - . 127 By Harry Franklin Porter, Organization Engineer XIII The Builbing op Men 138 Ad Interview with Edward B. Butler, Chairman of the Board oi Directors of Butler Brothers By Carroll D. Murphy XIV Shaping Men to the Work 143 By C. H. Slocum, President of the St. Paul Book & Stationery Company IV— PUTTING MORE THAN MONEY IN PAY ENVELOPES Editorial bj/ James A, FarreU 151 XV Profit Sharing — Its Success and Failures . . 153 By Boyd Fisher, Vice-president of the Executives' Club of Detroit XVI Profit Sharing: When? Why? How? ... 159 By James A. Farrell, ^ rresideot of the United States Steel Corporation XVII Giving the Men a Chance — What It's Doing For Ford 1 67 By Harry Franklin Porter, Organization Engineer XVIII Helping Employees to Save 183 By Stanley A. Dennia Based on an extensive investigation XIX Your Right In Your Employee's Inventions . . 193 By Joseph W. Ha^s, Combustion Engmeer SPECIAL ILLUSTRATIONS I questions that help in hiring 33 n A CARD that checks on ex-workers .... 41 III THE rockefeller PLAN FOR HANDLING MEN ... 85 VI SHOULD EMPLOYEES ASK THEMSELVES THESE QUESTIONS? 109 V THE EMPLOYEES* BANK PASS BOOK 186 VI A SUCCESSFUL LOAN APPLICATION FORM .... 188 VII WHEN ONE employees' SAVINGS ASSOCIATION LOANS . . 191 PART I-SELECTING AND HIRING My Measure of Success T^HE architect and executive who design and * direct and yet strive to do the bricklaying, will advance not far and will quickly wear out. One who has the faculty for right selection of responsible subordinates needs also that wise sense of justice and appreciation which accords unstinted scope of action and generous recogni- tion of results. The proverbial reluctance to allow those to enter the water whom we would have swim has given short measure to many a success. A good executive finds, develops and leans upon those who can carry forward for him the increasing divisions of his single great work. In all work, as in all knowledge, there is un- limited room for expansion and advancement. The business pyramid will find no circumscribing dome above which it cannot lift its capstone. Therefore, granted breadth of field and the leader's personal equation, the degree and height of business mastery and success will accord absolutely with the number and efficiency of the supporting body of workers. And the executive will have the deserved praise and reward of One whose admirable work has been to lead, to develop, to render produc- tive; to add to the commonwealth of brain and things and character. JOHN WANAMAKER President, The Wanamaker Stores HOW WE LIFTED HIRING OUT OF THE RUT By A. K. Baer, Secretary-Treasurer, Strouse-Baer Company 1A.LTIMORB is quite a center for the manufacture of wearing apparel. These factories use women employees almost exclusively. The increased produc- tions that have been made necessary by the increased demand for merchandise recently have compelled all manufacturers to have their plants running to capacity, and, in a great number of instances, additions have been made which also called for enlarged forces. This condi- tion was made more serious by the fact that there has been an unusual increase in new factories in the same line. To secure sufficient workers, who are to some degree experienced, has produced a bid for them by every factory in the city. These appeals have heretofore been made in the usual stereotyped way in the want columns of the various newspapers. In fact, there are at all times and have been for quite a number of years, ' ' Help Ads" of this character appearing nearly every day in these columns, so when workers were looking for posi- tions they saw the same sort of appeals by any number of manufacturers, and therefore, these "ads" became commonplace. One month we had continuous want ads running in the classified columns of the daily papers, and our total 10 SELECTING AND HIRING results in applications wbieh were accepted were only six, upon an expenditure approximately of one hundred and twenty-five dollars. Our business has expanded to such an extent that it was necessary for us to increase our production thirty-three per cent, which means that we had to put in sixty additional machines. With the experience of our previous month's advertising for help staring us in the face, and knowing that we had to fill up our new plant within a very short period, we were confronted with a serious problem. Our solution was an advertising campaign Which is along lines quite differ- ent from those usually followed in employment "ads." It has been highly satisfactory, for by it we have filled up our entire plant with experienced help. Everybody sells his product by telling about it — ^by pointing out why the buyer should purchase, by showing him the advantages that go with the goods. Why shouldn't we use these common-sense methods when we hire workers? Why not give them reasons why the employment we have to offer is desirable? Why not "sell" our good working conditions as we sell goods? This line of thought seemed reasonable. But how should it be done? If a person is out hunting for employment and must have it, you get him to come to you by the stereotyped want ads. But you can't do much toward creating a particular desire to work for you on the part of the prospective employee in the uniform type and narrow confines of a classified ad in the daily papers. So we decided to do some pioneer work. We took approximately half pages in the Sunday papers for three successive weeks. This gave us ample room to tell why our factory is a good place to work in. Good ventilation and heating, excellent lighting facilities and clean, con- venient rest rooms in a fireproof building — ^these are CAPITALIZING THE JOB'S GOOD POINTS 11 points about our factory that we pointed out in each advertisement. "What's in the pay envelope, week after week?" is a question every applicant is going to ask in one form or another, so we headed one of our advertisements that way and then by a table showed in dollars and cents exactly what eight representative operators earned dur- ing each of seven specific weeks. We compared the wages our girls make with those earned by the average operator. But skyrocket wages over a brief period are of little interest if they are eaten up by slack periods, so we brought out the uniformity of employment in this sentence, "There has been no slack season in more than three years — ^no operators have been laid off for lack of work — every operator has had full time." "Two- thirds of the operators who were here when we began over three years ago are here now," is another fact we thought worth bringing out in the advertisement, be- cause, after all, "the proof of the pudding is in the «ating. ' ' HOW the attractiveness of working conditions can be played up to advantage in "help wanted" copy and attract employees of a high standard. We have new machines and keep them maintained in the best of condition. We thought this well worth men- tioning, for it has a bearing on an employee's output and earning power. And we didn't forget pictures. Photographs do much in visualizing conditions, and we made ample use of them in these advertisements. We showed not only our workrooms, but individual pictures of a half dozen of our operators under the caption, "We Want More Operators Like These." 12 SELECTING AND HIRING The psychological effect of these advertisements upon the girls and women who are required to earn a liveli- hood has been unusual, for it brought to the notice of a great portion of prospectives, the possibility of earning salaries in excess of what can be obtained in other lines of female endeavor, such as office workers or shop girls. It must be further taken into consideration that the ele- ment of foreign female help in Baltimore is almost a nonentity, and factory work to a great portion of Ameri- can girls bears almost the same stigma as that of a housemaid. It is, therefore, necessary to consider our advertising for help as sort of an educational campaign, in connection with a direct appeal for experienced help. Within our plant as well we have taken steps to build up our working force. We have posted in prominent places in the workrooms signs headed, "Help yourself by helping us. ' ' The announcement itself is made up of an offer of ten dollars to any employee who secures the services of three experienced operators and three dollars for one skilled operator. This is provided the operators thus obtained remain in our employ at least three months. It is difficult to say whether the sort of an appeal made in our special advertising campaign for workers could be used generally. A campaign of this sort would necessarily depend upon individual conditions. But in our case it has done what we hoped it would do. It has given us a full quota of employees of a high standard. ONE reckless workman has time and again spoiled the "safety first" spirit of a whole shop, while a run of accu- rate and fine work has more than once toned up careless habits throughout — has made better workmen and cut inspec- tion costs. Haeht a. Wheeler, Vice-President of the Union Truat Company, Chicago II LIVING UP TO YOUR EMPLOY- MENT SYSTEM By Carroll D, Murphy Baaed on an Extensive Investigation AUDITING emiJloyment conditions at the branch L sales offices had kept the traveling "trouble man" s»f a big implement concern in upper Missouri territory for three full weeks. He had examined new and sea- soned salesmen, had held training conferences, had checked personal sales records, had called in and lunched with the star men and "trailers" from odd corners of the field. In every way possible under his authority, he had standardized the employment routine of the branch and had brought it into line with home office policy. Yet in his primary mission he had failed — failed because the employment system of which he was a part was incomplete. In his pocket he carried a telegram ordering him to run in from Denver and find why upper Missouri sales showed a slump. And having found the trouble, he had found also that he lacked the power to meet it. "You've decided to give WUson that new agency?" he inquired with pretended confidence, as he sat closeted with the branch manager on the last night of his stay. "I'm firing Wilson tomorrow," was the curt reply. "But he's your oldest man and the best salesman on your payroll. He knows that territory as no one else 14 SELECTING AND HIRING does. He has earned the promotion and to push him out instead of giving it to him will discourage your whole force. The home office has noticed the difference already. In fact, I don't see how you personally can afford to let him out. He has worked up his trade to $8,000 and $10,000 months when his nearest, man runs $3,500. To lose him will cut down your bonus and spoil the record of the hranch." "I won't have Wilson around," said the h(ran,ch manager with finality. "Suppose you hold him over a couple of weeks and recommend him for some other territory. He's too valuable a man to let go. I'll report him in and have him shifted, ' ' the adjuster suggested. "I'm firing him," was the answer, doggedly given. Next day the adjuster brought Wilson's case before the division sales manager in charge of ten branches covering several of the prairie states. He explained that the salesman's record was sound; that there were no specific charges against Wilson ; that the dismissal of the man who was in line and the promotion of a favorite would surely spread discontent throughout the field force. The division manager, however, held that it would be a mistake for him to interfere with the branch man- a^r's policy — would make him "responsible for any bad luck the branch might strike." WAYS to lessen the friction in handling men which often develops through office politics or through an employee's fear of the other fellow "getting his job". Ten days later the trouble man laid the ease before the general sales manager. "Our employment plan is incomplete," he said, "unless we back up our bonus system of payment with an employment committee and WATCHING EMPLOYMENT CONDITIONS 15 arbitration board or some home oB.ce cheek on politics in the branches." The sAles manager stared out of the window for a full minute, then shook his head. "The only thing I could do," he declared, "would be to remove both the division and the branch manager. Wilson isn't worth it, good salesman as he is." What this scheme of employment lacked was a means or method of enforcing its provisions. Hiring stand- ards, merit standards, contests and enthusiasm-getting schemes had all been worked out on a fair-weather basis. If the one responsible at each point had been entirely sound, the plan would have worked. But it lacked that final, positive authority which urges or forces every man to keep to the rules in time of stress because a bigger power in the company will bring him back to them if he takes any byroad of carelessness, selfishness or favoritism. Ask the enthusiastic employment chief who has told you his hobbies in man-handling this plain question; "Does it work — does your employment system as a whole satisfy you?" Never is the answer an unqualified "yes." Various plans are shrewd in making men and managers observe the routine of hiring, discipline or payment. But we have not yet worked out any system so complete and well balanced that it does not break down somewhere in time of trouble. What every man- ager is looking for is an employment plan which will work to the rules as closely as the checking system in the average bank and at the same time not create a spirit of discontent among the workers. Just as the bank's checking rules fall into groups of essentials, so you can put on the fingers of one hand the five essentials of labor buying : 16 SELECTING AND HIRING (1) An employment bureau which shall look out for the labor supply, keep the best men available and put each new workman where he fits. (2) A staff or instruction plan for training and developing your workers. (3) A system of records and conferences to get a fair decision on every man's ability. (4) A method of shifting men to put ability on its most productive basis. (5) Such rules as to pay, promotions, and other re- wards as will stimulate everyone to do his best at each stage of his development. After the rules, card forms, positions and methods have been worked out, however, the sixth essential — the power that clinches these fingers into a solid grip on progressive employment policy — is the provision which the management makes to guard these rules and methods from neglect at all points. As the bank says : "These things will be done because no payments will be made otherwise," so the manager must be assured that no variation from his plans can pass unchallenged. Most employers recognize that friction in handling the force focuses at certain points. The hiring department in a big public service company, for example, has a complete routine for the picking of good men, but the spirit of personal enthusiasm and responsibility behind the plan has gone out — the man at the first desk, where sixty per cent of all who apply could economically be rejected, is dispirited, routine-ridden, weak in his judg- ments of men. Rulings that urge the training of men are found fre- quently to induce friction; the man who should be de- veloping new material for various places is "afraid of his job." He tries to make an extra showing of economy WATCHING EMPLOYMENT CONDITIONS 17 or of personal ability and so crowds down or neglects his men that his staff is constantly crumbling to pieces. Investigation of the city sales office of a computing machine company showed that salesmen had often been driven away by the office manager's eagerness to credit himself with telephone sales from the territory assigned to these men. The illness of an estimator in a con- tracting company brought out the fact that for three years he had been holding back the coaching he had promised to an assistant. At one time he was too busy, at another his place seemed too uncertain, and again he had a friend in mind for the opening and so neg- lected his first duty. METHODS /or building a strong and enthusiastic working force by detecting and eradicating weak points in the employment system. Such fears, rivalries and cases of neglect dot most organizations and become centers of disloyalty. Yet simple foresight and the common-sense application of yesterday's experience will quickly tell any employer just where his employment plan needs to be reenforced. The president of one $50,000 concern has been able to build up a strong and enthusiastic corps of workers simply because he tactfully anticipates and quietly avoids friction in the enforcement of his employment scheme. The need developed for a new department head in this company. The president wished to make it a rule that promotions be awarded to the present employees best fitted for it, yet he foresaw that several executives would begrudge him certain able assistants. In fairness to the men who had earned advancement and to the heads, who might be prejudiced by their own convenience, therefore, the president adopted the prac- 18 SELECTING AND HIRING tice of dropping in upon the department work and studying the fitness of the men in line for the vacancy. When he had practically chosen an assistant from the sales department, he went to the sales manager, told him of the vacancy and asked him to suggest several candi- dates for it. The sales manager, knowing that his superior was familiar with the abilities of his men, had no course hut to suggest frankly that his assistant might fit in. Repeated conferences took up the promotion from various angles, and made the sales manager feel that he was making a voluntary contribution to the personnel of the concern, in return for which his employer was not only giving him full credit, but was cooperating in the effort to fill the "assistant's place and thus minimize the inconvenience to the department. Against the selfish instincts of the department head, this employer matched these stronger . motives so tactfully as to inspire him enthusiastically to stand by a promotion on which the spirit of the younger workers in the concern depended. In a similar way every threatened' point in a scheme of employment can be safeguarded. Question your employment system franMy: Does it work? Where does it generate friction? How can it be made trouble- proof? In answer you can blue-pencil on the chart of your organization these spots where fear of personal dis- advantage, hostility between men, favoritism, self-im- portance, ignorance, neglect, snap judgment, overwork or an unbalanced plan of payment threatens to make the bearings "smoke." Against every one of these dangers the wide awake manager has installed some more or less automatic safety device. The employment schemes which are most successful focus certain duties upon each worker, inspire him with a sure reward for his service and after thus WATCHING EMPLOYMENT CONDITIONS 19 reenforcing instruction with inspiration, assure him that his record is under inspection constantly and that he is being graded fairly for both failures and successes. To be ready for difi&eulties is the essence of a strong man-handling plan. Every belt ajid pulley of employ- ment routine needs back of it both a regular and an emergency engine. Not only to insure him that he gets a fair return for his wage, but also to protect him from favoritism in the department, the employee must be left no excuse of ignorance as to his duty, and at least two independent forces in the company must report sepa- rately aS to his efficiency. This plan holds for the individual, the department head, the employment sub- committee or arbitration board and the employment manager. In a small factory reports on costs and output, to- gether with shrewd personal contact, tell the higher officials from day to day how the department heads are observing the rules and holding their subordinates up to the plan. As an inducement to the workers to cheek upon this information, an annual bonus has been arranged which reaches the older and more trusted em- ployees. Every spring the management announces to its men that it has set aside a certain unpublished per- centage of the profits to be made in the next twelve months, for distribution according to wages among the employees who have long been in the service of the com- pany. About one third of the employees receive this bonus, and so completely has it won their cooperation that upon every nook and corner of the factory they focus eyes watchful for friction in the handling of help. In a suit-making plant the management gets inde- pendent reports on employment conditions from three different centers of responsibility. The regular em- «0 SELECTING AND HIRING ployees are made accountable for all new workers by a provision that no hiring shall be done except on the recommendation of steady help. Every case of lateness, absence or continued inefficiency is also investigated in a thorough way and from time to time must be reported in outline to the management. The usual output reports keep the management in touch with efficiency in the shop, and the independent view from a third angle comes through the work of a woman disciplinarian, responsible to the management and in constant touch with the fac- tory force. In another and larger concern, a complete labor de- partment has been organized where, through complaint and suggestion boxes, foremen and workers can file their respective cases, throwing light from, two angles on con- ditions in the plant and leading to corrections needed. Under this plan discharges were cut to ten per cent of the total under a former routine. A board of arbitra- tion, in which both department heads and employees are represented, acts as a court of appeal from labor depart- ment decisions, and has worked out a code by which the labor department is guided. HOW u special investigaiioa at stated intervals can be used to bring to light mistakes in hiring, abuse of the promotion power, and the like. In another concern, no man can be retained in one department for more than three years without bringing, by automatic follow-up, a special investigation. At this time the employee's record is brought out and the whole situation comes under scrutiny. Mistakes in hiring, neglect of training, wrong judgment of the man and abuse of the promotion power thus come to correction. Whenever a vacancy occurs, moreover, the employment WATCHING EMPLOYMENT CONDITIONS 21 committee of this company, perhaps in the most unex- pected way, brings out the records of all men in a de- partment, calls various chiefs into conference and thus, as often as vacancies occur, makes a special test of employment conditions. Enforcing an employment system predicates that in- formation on every point shall come from several angles surely and often to the man most interested in the suc- cess of the business. By getting this routine on paper, the prime mover can enforce a simple automatic follow- up. This is the method in use by a New York publishing house with branches all over America. In the manager's- office, agency difficulties have been reduced to a series of charts or "trouible sheets." The branch manager is constantly in touch with the house by reports on sales, collections, expense and man-handling. When a sales report shows a slump, the general manager checks down his "sales trouble sheet" and, by correspondence or if necessary by personal conference, puts a finger on his man's difficulty. Branch managers soon come to know that they are on their record — that what they do is in the lime light and that their faults will be known just as surely as their difficulties and efforts. In order further to emphasize the rules without offending the field men, the financial reports sent in by different branches are scored and reported weekly as a base ball contest, in which the winning team is the one doing the best business for the week. The branch man- ager's personal reports are developed into humorous but straight-from-the-shoulder comment. Checking back upon the branch manager and his men at a different angle from that of his immediate superior, come this bulletin and a weekly statement showing each man just how his work compares with that of the other men. This S2 SELECTING AND HIRING ' double attack rouses the ambition of managers and men, and makes them clamor for suggestions from the trouble sheet at the home ofSce. The unorganized factory force has as many conflicting interests as the arrows that dot a weather map. Re- sourceful employers find plans to line up these interests for a time and make them all run parallel with the sac- cess of the house. The tactful paymaster appeals to the personal advantage and success of the individual and so stimulates him to contribute to the success of the house. He shows the worker that his own failure threatens whenever he threatens the welfare of the concern. He appeals to the caution and the pride of his man. But his system is often only a matter of enthusiasm; his team is held together but temporarily and by the force of his personality, unless he inserts at every important friction point in his employment scheme a make-sure clause — an emergency engine which is bound to put through the routine if the regular power goes off. Small details are entered by a subordinate, whose reports are verified through an independent source. Step by step the details are cleared away and the essentials of the system focused, until finally the employer or general manager gets the essential proofs that the routine is run- ning smoothly. The best of employment schemes will not win the workman's respect, inspire his confidence and get results without the driving force and will power of the employer steadily behind it. Spurts of man-handling punctuated by forgetfulness will not succeed. Employ- ment is an executive task which demands regular hours, a place on the calendar, perpetual responsibility on the part of those immediately in charge and periodical at- tention from the manager. Because wages are only an WATCHING EMPLOYMENT CONDITIONS 2^ external Cheek on men, the wise employer goes beyond his pay roll auditor, makes someone responsible for per- sonal supervision of every employment detail, and sets a second agent to audit and correct the other's errors and personal equation. The trouble sheet and the employer's reports close the magnetic circuit of efficient work. EFFICIENCY like an invention tdvxeya cornea to an individual, nevert to a committee or to an organization, and the weakness of cooperative production is the under- valuation of the individual, the manager who develops effi- ciency in other men. In most spheres of action and in the economic world in particidar, some men are much more efficient than others. Smrte men possess much more ability than the majority of their feUows and among this higher class there are varying degrees of efficiency. Modem industry- has been developed through the invention of efficient ma- chinery. Man efficiency, however, is today of far greater importance than the further development of effidenay in machinery, the greatest problem before us today is not so much the further improvement of machinery, but the develop- ment of an increased efficiency in men." James Logan, Chairman of the Board and General Manager of the United States Envelope Company m WHEN YOUR MEN HELP YOU HIRE By Charles Harris Based on an Extensive InTestigation ONE of the most successful engineers I ever knew attributed most of his own success to the class of help he had been able to employ for his department and, indirectly, to a policy he had long followed in the selec- tion of his assistants. His policy really came about through accident orig- inally. It was some time before he analyzed the situation and applied the policy in an intense and unvarying fashion. In the beginning, he had happened to get a capable man or two from this school and they, in turn, had recommended others from time to time. Finally he came to a realization of the fact that he was depend- ing to a marked degree on the men from this school. He thought the matter over and awoke to the value of his "discovery." ' ' Capable men can distinguish capable from incapable people among their friends," he said. "Moreover, a capaible man will, as a rule, have capable men for his friends. I would therefore rather hire men on the recommendation of my more capable men than through any other source. As to the men from this particular school, I know full well that there are other schools in the country as good. Probably some are better. I used COOPERATION IN HIRING 2^ to believe that this school's training, some way, pecu- liarly fitted men for my business. But that is not true — decidedly not true. "My success with these men has been because the men I had, being capable, knew and recommended capable people. Moreover, there has always been a sort of 'community of responsibility' among the employees from this school. Every man from the institution, is proud of the record of every other man in the depart- ment from the same school. The older men will sort of 'father' a new man from the school — ^will help him with infinite patience. Thus, from a class of many students and one teacher, at the school, the new man comes into a class of one student and several interested and very practical teachers here." This is one man's interesting formula for obtaining good help, applicable, apparently, to his line, but not applicable in the cases of the great mass of employees. However, at least a part of the plan is being applied right now, in the selection of women employees for one of the largest pharmaceutical manufacturing houses in the country. In the city where this company's chief plant is situated, it is known as a place which attracts unusually high class employees, both men and women. The whole success of the company in this particular, according to its president, has come from the logic that "nice people will have nice friends." It has, therefore, been the policy of the various department foremen, in seeking new help, to ask the more capable employees if they do not have friends who would like to work at the factory. It is naturally necessary that "nice people" should be well treated, though they are really not unusually well paid. The desirable people in the plant remain, also, through the fact that the other people are «6 SELECTING AND HIRING "nice people"— the sort of people who are agreeable to them as associates. The very reputation of the fac- tory as a pleasant place to work, has of itself become a valuable word-of-mouth advertisement for capable people. In this case, the treatment of the employees is a matter of great importance, of course, as in every such plan, but it is never the effort of the company to start with a decidedly incapable person. I know the manager of a garment factory which em- ploys women almost exclusively, and whose employees are known as the best in the city where his companj^ operates, as the result of close attention to the two ideas of careful selection and careful treatment of the «mployees selected. Like many other lines employing women, it is the rule of the trade that employees are prone to go from shop to shop, often for no very apparent reason. "Just want to change," in fact, is often as much as the manager can get from such an employee. IN THIS case real interest in the worker's personal connforl paid dividends in good wUl. How welfare work wUhmtt "frills" is conducted. Several years ago, this manager decided to turn this trait to his own advantage and determined to keep, per- manently, a greater proportion of the really capable people who came from time to time than he should lose. "We have made a careful study of the comfort of our girls," he said, "and of their feelings. We give especial attention to the more capable ones, of course. This policy .goes far beyond the maintenance of our dining room for employees — far beyond the annual dinner and the dances we allow them to have here. It goes into their everyday routine work. We let it be known that we do not want a girl in this factory who has to be railed COOPERATION IN HIRING 27 at. We have cool-headed girls — employees who, when they feel they have been unfairly treated, will never- theless talk the matter over in a cool way. We let it be known that we will protect the rights' of the girls and that we are very much interested, also, in our own rights as employers. The result is that they understand us and we understand them in an unusual way. We are getting and holding the better class of employees, and we are getting out more work, mechanical equipment and floor space considered, than we used to be able to turn out." This manager, with the company many years, believes that fully half the women are older in the service than he, and many of them have been there for more than twenty years. He takes into account, also, the fact that one of the big considerations an employee gives a prospective place of employment is the question of the wages possible to earn, and inasmuch as practically all the latoor is paid by the piece, his policies in this par- ticular have been of great help. He has tried to make it possible for the women to make more. For example, he found occasionally what seemed to him to be a needlessly large investment in stock in process of making. His investigation showed this con- dition to be due to the fact that there were occasional variations in the working forces of the several depart- ments — old employees were away, less capable substi- tutes were working, and so on. Such a condition was bad for the factory and bad for the women alike. He made inquiry in the various departments as to people who could do the work of other departments in an emer- gency, many in the past having changed from one department to another. He then made sure that the girls understood that the plan he had in mind would SELECTING AND HIRING be good for them as well as for the owners, and sug- gested that certain employees form a sort of reserve, in case of such emergencies, for work in congested departments. Now, if Department No. 1 is about to swamp Depart- ment No. 2, so that employees of Department No. 1 may have to be laid off, and Department No. 3, No. 4 and so on, are working short time because the goods are accumulating in Department No. 2, girls who know the work of Department No. 2 are sent into that work from various departments until the situation is relieved and the equilibrium reestablished. The result is that the employees of the various departments make more money. The girls were quick to see this, and there was practically no trouble, anticipated before the plan was tried, with girls who had for one reason or another preferred the department of current steady employ- ment. They were willing to go temporarily to their old employment for the good of the force generally. In such matters as a better standardization for but- tonhole markings, this manager has also gained the favor of his employees. In another case, a small machine was devised to cut elastic used for overalls into uniform lengths with an automatic cutter, thus making assembling easier for those who handle the elastic — and, inci- dentally, saving the company much money. This manager believes that too many executives only see in such improvements the advantages which come to the company and fail to recognize the benefit which can come to the employees and which, when it is brought adroitly to their attention, will make them feel in a more kindly way toward the company. "When we have an opportunity to improve a method," he said, "there are two things that appeal to me most strongly. COOPERATION IN HIRING 29 la the first place, how will the change make us money ? In the second place, how can the girls be shown that the change will be good for them ! ' ' He often goes through the factory on deliberate tours of "friend-making," stopping often for a moment's chat with the more capable women, discussing the machines with them, assuring this operator of a button- hole machine that he will have a man from the factory to look at it, requesting that the other girl use one of the extra bench machines until the guard on her machine can be repaired — taking, in other words, a personal interest in the work, earnings and safety of each girl, and letting her know of his interest. In a somewhat similar way, a manufacturer who main- tains a dining room for his employees makes the dining room pay unusually large "dividends in good will" from his working people by frequently going about the dining room, very much as the proprietor of a public eating house often does, asking about the food and the service with real concern. "How's that new pastry cook, John? Like her pies?" is bound to make John understand that the owner is really interested in him, and to give the man a better understanding of the fact that the dining room is the result of a real interest in the employees. This man believes that a factory dining room, without a sufScient amount of "host and guest" relationship, is quite as bad as a hotel or restaurant that lacks this element of personal interest. This employer has always been known as "a good man to work for" and has been able to employ and keep help above the average because of his policies. In a clothing factory where many women are enjployed, and where a somewhat similarly careful atti- tude is maintained toward the employees as a means of 30 SELECTING AND HIRING . attracting the best obtainable, an interesting method is used for increasing the popularity of the dining room. It was found that employees in some of the depart- ments furthest removed from the factory dining room would bring cold lunches and go to the dining room to eat them rather than to wait in the long line. The remedy was the dismissal of the four chief departments five minutes apart. Thus, there is much less waiting in line. The departments, of course, return to work at the end of the noon hour in the same time relationship. Nearly twenty-five per cent more are served with warm food. ' ' There are times, ' ' the owner of this plant said, "when it is wise to be especially careful with help. One of those times is when the employees are hungry." This owner probably summed the whole story into a few words when he said : ' 'Pay ? It has been the ' mak- ing' of our business. You will not find a cleaner, brighter or more capable set of people anywhere than we have right here. What has it cost? Nothing, prac- tically, in dollars and cents. It has been, chiefly, a matter of thoughtfulness — of attitude. A little real con- sideration, particularly in time of fatigue or physical distress, counts for more than all the frills that can be injected into so-called 'welfare' work that is lacking in this element." SUCCESSFUL operation of any bitsinesa — manufadur- ing, wholesale, retail — requires exact information about every detail of the business. The informaiion must be obtained cheaply and simply, hut it must be complete enough and detailed enough to give the executives who are responsible for the operation of the business exact knowledge of its every detail. Chakles R. Stevenson, Geoeral Manager, National Veneer Products Company IV THE MAN FOR THE JOB By Carroll D. Murphy Based on an Extensive Investigation TWO men met at the revolving door of a downtown restaurant. They shook hands and the older led the way to a table. As they took off their overcoats and settled into chairs, he eyed his companion with keen fixity. "Well," said he, "you're the man for me. You live up to your telephone voice." The younger man looked incredulous. "What do you know about me?" he inquired with amusement. "We've exchanged letters, made a tele- phone appointment and spent three minutes together. Doubtless some of my friends have told you the cus- tomary lies about my accomplishments. Three weeks ago you had never heard of me." "Precisely — as precisely as I should have expected you to draw a summary," agreed the other. "Let's get down to terms " And a bargain was struck which brought the concern a most valuable employee. "Tell me how you did it," urged the younger man, as they sat smoking after the meal. "What do you know about me — how did you get a line on me? Although your proposition looks good, I am not sure that I can handle it. I have never turned my hand to that sort of thing. Aren't you taking a big risk?" "What do I know about you?" the older man para- 32 SELECTING AND HIEING phrased. "I know that I have been hiring salesmen for twelve years and studying my man. I know that I have been selling specialties to business men for sixteen years — and studying my man. I know that you have the salesman in your signature, in the way you phrase a letter, in your voice, in the way you carry yourself, in your hands, in your eyes, in the shape of your head, in your nose, lips and chin. I know things about you that you think are secrets from your closest friends. I know, you see, things that you don't know yourself. There are labels all over a man's appearance and actions ; for sixteen years I have been learning how to read those labels." STUDY atid standaTdizaiUm of the requirements of both the job and the man bring a hnmdedge of the required average, which is essential to accurate hiring. Such judgment of capacity may be intuitive, or it may be the trained and experienced character-reading ability which this sales manager used so confidently. In cases where the employer has made character read- ing an intelligent study, astonishing results are some- times secured. And it means dollars and cents to a concern. A $25,000 salary represented the eagerness of a big corporation in its search for an efiBcient factory head. The man whose resignation it had requested had been paid a salary and perquisites worth close to $32,000. Although a shrewd organizer, accurate as an astronomer and economical as a Yankee in his factory operation, this superintendent had still lacked one quality — ^that of enlisting the enthusiasm of his department heads and men. The new superintendent must have magnetism as GETTING THE RIGHT MAN APPLICATION FOR EMPLOYMENT nat. 10 UMrm What pubHis HhDOl did yoit trltmiil? Whit hish fcliafti dM you f^end? UrtiAii OTarfnatwf? WM Mlli|i> dill yon Xhnin Wlun praHinl«d ? Hav9 yov any phyf Ec?f d^e^f? wngrnfi nr ttflliiry nYjmntnA GIvii tli9 names oT tlii! tlmis fgr wMch von haVB worked, Mnning Willi t!ro first and nzntng tig last todato. RIsd Of business Wwt salary a wazss did you raceive? Sililnt. Why did you l>t»v?^ Mitms Why did yon toayo? «« rwn *wlar|i HftdlicilBUuOBii i|>liut nimHnMt la nmoti gi u wnBinrt Mini wNb* conMliu (hi iieb anrfct] 1 DliLnlitfnti ntu onninin iln vbmi lot eaa- lnlxili4iMlinMM0liLnli«nti Itau TMi (imntttiE nil liKlKlt ni B Uuu I wopii Ua fomntlM If tafnDliI dlipalUi A i$Klil trnclil— tlB tntUnri UOntiU] npnuaunii— laM >* l» tti> iBMriaKMl iwwilli h ImiuitH oil ittti * iilniiiM (UBitil oj oinur> IJuaiii on M dtelU iHTntnitim gr It Ui iHiBiii ud on etnr n m DC Mdm tlM pnUiItiifi iDABtiU iipmiauUT). uibu einOM Bt Codhhiit'i tonttHT OtlM Ma AtricU-iM tl» aip-tiriin hnd UttrfctaEKnluHOnitlmn lyiB aiu oia (mum 6 HOLDING MEN in one week to $52,600 another — a drop from high to low of 34 per cent." Where dull seasons are unavoidable, some concerns follow the policy of cutting down the hours of piece- workers and thus reduce the earnings but distributing the work in such a way as never to deprive the em- ployees entirely of support. Only those employees who have been with a concern the longest or those who are the most skillful are likely to complain of such an arrangement. HERE are ten basic reasons why men quit jobs — most of these causes can be remedied by sound man- agement and 'proper supervision of employmentcenditions. Perhaps the most frequent cause of large labor turn- over, particularly in prosperous times, is the voluntary -quitting of employees. And why do men quit of their own accord ? Probably most of the reasons are included in this list: because of low wages, of long hours, of inequalities in pay, of fancied wrongs, of poor working 'Conditions, of dislike for a particula.r kind of work, of inability to get along with fellow workers, of poor loca- tion of plants, of inability to see a future, of wander- lust. And most of these causes find a remedy in sound, up-to-date management. Perhaps the first reason, low wages, is least amenable to management methods, for in the long run wages are determined by the labor market and find an upper limit dictated by competition made evident through sales prices. Some factory men, however, believe that under proper management conditions the raising of wages may "be followed by the cutting of costs. They feel that this may come about not only through production, but be- cause of the elimination of labor troubles, the securing CUTTING LABOR TURNOVER COSTS 97 of the most skilled help in a given locality. This is in effect, of course, the plan followed by the Ford Com- pany in its now famous five-doUar-a-day minimum. Long hours may well be a reason for a large labor turnover which is a detriment far out of proportion to the inefficient output of the hour or two excess over the customary working day. A low scale of wages, many firms have learned, may not discourage so many men as inequalities in its distribution among the workers. Quoting from Boyd Fisher, Vice-president of the Detroit Executives' Club, "this constitutes the worst injustice of all." He cites one employment manager who discovered a workman who had been on the same rate of pay for five years. "He is now seeing to it that men in his ewnpany are periodically advanced or pro- moted in accordance with their efficiency records regard- less of whether they ask for increases in basic rates or not." Some managers attempt to overcome the unjust distribution of wages by paying for men's output and this, of course, has led to all sorts of wage-payment plans from the simple piecework to some of the highly compli- cated bonus forms of payment. Because a wrong is only fancied instead of being real does not help the employment man or the turnover record any. If a man thinks he is not being treated right and jobs are plentiful he leaves; whether there is any basis, in fact, for it is outside the question. Is it not probable that a better man-to-man supervision is one way to clear up these fancied wrongs? Perhaps authority of straw bosses should be reduced, perhaps a closer contact with the men higher up, perhaps an in- sight into the aims and policies behind a business will straighten out same of these psychological reasons for a man's quitting. HOLDING MEN As an instance of the plan of letting workmen know the policies of a concern, the things for which it stands ; in other words, what it is all about, might be cited that of the Packard Piano Company. Mr. Bond, the presi- dent of the company, has but to open the middle drawer of his desk to show you the written policy of his concern subscribed to by each of the men in the plant. They know what they as units and as an organization are aim- ing at and they know the management point of view toward them. IF THE worher feels his employer has a sincere interest in him he is a better worker. How welfare work of almost every nature helps strengthen this feeling. In some plants it is felt that definite evidences of team work between management and men are helpful in smoothing out petty wrinkles in handling labor. For instance, one Massachusetts concern, where a large num- ber of Swedish people are employed, recently held a folk fest. The general manager of the concern headed the procession at this event and the board of directors were all there. Later there was a ball game, then a parade in which the executives figured prominently. This show of interest was not merely staged, but sincere and it had its effect. One specific result mentioned by the em- ployment manager of this company was that shortly after the folk fest four times as many people applied for jobs as did in the few days before the event and after the ball game six times as many wanted jobs as before either of these events took place. Manufacturing standards in general are such that unhealthful working conditions in plants are fast disap- pearing and where prevailing standards offer no spur, competitive condition^ do, so that only those factories CUTTING LABOR TURNOVER COSTS 99 operated from the safety and health standpoint secure the pick of labor. According to W. A. Grieves, Supervisor of Employ- ment and "Welfare "Work in the Nash Motors (Jeffrey Manufacturing) Company, mutual aid, hospital work, restaurant, cooperative store, hakery, dairy, building and loan association, are all factors in the permanency of the labor force in that company. No workman need feel that he may be jeopardizing his health by working with a fellow employee who has a contagious disease in a plant where physical inspection is part of the employ- ment and labor maintenance program. Fewer men would leave a plant and give at the next one the excuse, "I didn't like the work," if the first one had in its organization what might be called a clear- ing house for labor between departments. At least, many concerns like the Ford Motor Company find that it pays to shift men from job to job until they find one to which, by skill and preference, they are best suited. Then, perhaps a man liked hi? work originally but has been kept on the same thing too long. "Was the man far wrong who said that the difference between a rut and the grave is only a question of dimensions ? There is also the man who quits because he cannot get along with his fellow workers. Isn't there a manage- ment remedy that fits this man's case? Can he be placed in another department among fellow employees with whom his nationality or sentiments do not clash? Here again, the tact and skill of a high type of foreman pay dividends. T'he effect of plant location on employment conditions was commented on at the very first of the chapter. As was said then, this as a factor may be larger in abnor- mal than in normal times. But always living condition^ 100 HOLDING MEN have a bearing on the subject and if satisfactory living quarters can be found only at the expense of a ten-cent fare or an hour's ride it may be reflected in the labor turnover figures. Some wise managers have foreseen" the monopolizing by real estate concerns of desirable property for homes and have cooperative plans which make it easier for employees to buy their homes or to rent them at a rea- sonable figure. Where men buy homes, there is oppor- tunity for holding down ill-considered resignations. One Iowa concern lays a great emphasis on the men owning their own homes. One of the questions asked of every applicant is whether he is in position to pay something on a home. If not, he is asked if he will start saving for one as soon as he is able. The man's expression in this regard is taken into consideration in accepting him. Just as monopoly on real estate may be offset by a company-controlled building and loan plan so cooperative stores may become a factor in holding your men. Every manufacturer seriously considers the question of waste, but there is one waste going on in many organ- izations that is entirely overlooked, and that is the waste of ambitious men. Many factory employees are entirely blind to their own future in an organization, not that they want to be, but the management has never taken upon itself the initiative of describing what's ahead for them. One company fias a definite policy of telling each man what's ahead of him. This policy comes about as a result of the personal point of view of the head of the organization. In another concern the rise of each exec- utive in the organization is pictured to the men in an endeavor to show the possibilities ahead of each one of them. In a Massachusetts factory the employment man- CUTTING LABOR TURNOVER COSTS 101 ager makes this a part of his program in employing new men, telling them frankly what they can expect. This has the eifect not only of spurring men on, but also the statement is made so conservative that men are not hired under false pretenses and therefore doomed to disap- pointment later. The intangible wanderlust, particularly in the younger men, is a larger factor than ever in labor turn- over when jobs are plentiful. Sometimes a man's crav- ing for a change may be satisfied by shifting him to another department. One concern with factories in dif- ferent parts of the country holds those of its men who have the roving spirit by transferring them from one plant to another upon request, wherever possible. But in most plants it is a combination of policies and plans that serve to hold men threatened with the wan- derlust, rather than any one plan. Home-owning and building plans may be a factor in holding the older men, but have little appeal to the young employee. The development of a shop spirit akin to a wholesome college spirit is often a factor in holding young men. Pensions, profit sharing, bonuses and opportunities to buy the company's stock also have an influence in holding men who are tempted to go elsewhere merely to get a change. Of course, no matter what plan you adopt, it should normally be one which will work out for the greatest good of the majority of your employees. . In every organization, no matter how large or how small, there will usually be found some workers, who, however un- thinkingly or unknowingly, seem selected bj' a perverse fate to act as stumbling blocks to the unqualified success of any plan. Happily, however, this class comprises but a small minority and the employer who devises a plan which holds and satisfies a majority of his workers. 102 HOLDING MEN usually has good reason to call that plan a success. Types of employees differ as do the characters of factory organizations. Plans that work well in one plant may have no success in another where conditions are different. But out of the range of plans outlined here are there not some that fit your particular case? Failure to adopt some means of combating labor turn- over is going to continue to emphasize "The High Cost of Labor That Comes and Goes." m WHATEVER success I have made during my career as a manufacturer I attribute to my close appliciUion to details and to my careful selection of competent men. Also it has been due to a large extent to my determination always to build an article upon honor and to give the greatest value possible for a dollar. This I have tried to accomplish not by asking workmen to vxrrkfor less than a reasonable pay, but by ecoruymizing in other directions — chiefly on nonpro- ductive labor and overhead expense." C. W. Nash, President, Nash Motors CompaDy X KEEPING IN TOUCH WITH JOHN AND JIM The Views of 63 Executives, with an Introduction by William Cordes, General Manager of the Florence Manufacturing Company A STRETCH of low meadow not yet very exten- sively built upon, separates Florence, a suburb of Northampton, Massachusetts, from the city itself. Flor- ence has a "center" of its own, churches, a public hall, a library and so on. Three l^rge industries — one a tooth brush plant — and a few smaller ones have always kept everybody in the growing community employed and make it an economic unit. The population is there- fore old-established and weU mixed, a closely knit social unit. Everybody rubs elbows with everybody else, attends the same churches, has graduated from the single gram- mar school. Probably in no manufacturing town does the industrial citizenry excel that of Florence. Intelli- gence, character, and the social instinct have but to be let loose in such surroundings to produce a compelling social force. "Yet we were not getting in the factory the benefit of all that social force," says WiUiam Cordes, Treasurer and General Manager of the Florence Manufacturing Company, the tooth brush factory of the town. "Our lately deceased former manager was a fine man. He had a big heart and would do anything for his employees in a crisis. Yet he lacked the ability to express his depth 104 HOLDING MEN of heart in little, simple, constant, everyday ways. He called us together one day fifteen years ago, those of us who were nearest to him, over in the old office. 'Boys,' he said, 'we need some young blood. This insti- tution is in danger of dying from dry rot.' The partic- ular breed of young blood he had in mind was that which could coordinate the energy and spirit of every one in the factory. He was a natural born gentleman. But he was modern. In today's language, his idea was that a good factory is a self-starter; that vim in the body of the machine is worth a lot more than vim in the crank-handle; that the chauffeur's business was rather to see that all the members of the organization work in- telligently together than to pull' the whole organization himself or kick it along. "I think that even a piston would like to know why it is moving. Certainly any man, whether manager or foreman or machine operative, would rather work intel- ligently than ia the dark. He works more easily, gets more positive results, with less subtracted for waste, plus an occasional inspiration. Also, brains are like sources of water power ; they may be there, but in gen- eral they don't come out and do work unless they and the personality behind them are recognized. It is easy to explain methods and ends to department heads or to foremen. But even if you had the time, it is impossible to explain purposes and methods to the entire rank and file — neither a bookkeeper nor a machinist can gain each other's or your viewpoint in a minute. The only thing which can take the place of complete detailed knowledge of whys and wherefores throughout the factory is a general knowledge of the personality of the company's executives, a sort of faith in them, which can only be gained by personal intercourse. DOES PERSONAL CONTACT PAY? 105 'We were urged to show whatever social spirit was in us. The Commodore, as we loved to call the manager, promised that he would do his best to follow our exam- ple. He did so, and eventually won a great deal of the social ability — ^which is what it really amounts to — ^the lack of which he had formerly deplored. The new spirit soon spread to the foremen, and expressed in a sec- ondary form by them, reinforced our own activities also. Things went along more comfortably and better. Since then every improvement has been in the direction of more personality in the factory. We have not by any means 'died of dry rot.' PERSONAL contact between employer and workers makes for an excellent esprit de corps, and this in turn leads to more and better production. "The matter of obtaining a closer personal contact is resolved into three questions. First, how far a man- ager should unite his personality with the business. But that is easily solved, because a manager is the personal expression of the business or corporation. He cannot dodge being so, neither can the company, and both should get the benefit, as well as the responsibility, of his representation. "Second, there is a fear that certain psychological reactions detrimental to the work would result from too close relations between employer and employee. But if a manager choose to be very reserved, he will have to take the inevitable results. An employee will shrink from giving any extra interest to his work, because he thinks that in an exchange of sentiment he would be flim-flammed by an employer who has no reciprocal interest in him. You have heard this: 'Why should I do anything for him — ^what does he care for me?' Or, 106 HOLDING MEN 'What does the company care for me?' This attitude of mind becomes a habit and is apt at any critical moment to cause loss which cannot be measured in dollars but is an index of a constant indefinite loss. On the other hand, I found a foreman a few days ago laying out, months in advance, a design for a next year's style. "As soon as it is found that the main result of expressed good will is of benefit, a way will be found to control the by-products. These reactions naturally de- pend upon the characters of both employer and employees. But these characters are not ossified, or even static ; they are dynamic, and will be themselves molded and changed during interaction so as to work more easily toward the desired results. "Third, the limitations and limits of the application of this policy. At this factory our relations within the circle of foremen are very close. I tnow a great deal about some of my foremen's business' and private affairs, such as sickness, deaths and personal home life. There are no limits to the spirit and practice of social good- feeling except those of sincerity on the one's part and comprehension on the other's. I would not force the extension of personal relations to anyone who is unwill- ing or distrustful. "We had demonstrated to us in our own plant the advisability, almost necessity, and subse- quently the benefit, of a greater personal contact with the men. A "We have had to import a great deal of help from outside of town, due to a sudden unrest, pro/bably caught from the munitions industries nearby, which happened to come just before a large expansion of our plant. The increase to 450 workers therefore amounts, from a personal contact viewpoint, to an increase much larger, and faces us with the problems of a bigger plant. DOES PERSONAL CONTACT PAY? 107 It is somewhat like starting all over again. Now some of these men are 'floaters,' who have worked in all sorts of places under all sorts of men. It is a point of pride or instinct with many of them never to take a man or a word at face value. The hest thing to do with them is to leave them severely alone. Some of them will go away, because they are built to go. Those who will stay are fast being silently taught by the esprit de corps of the factory, the spirit of good fellowship which makes for a united energy in getting out the best and most product." What Mr. Cordes has written concerns his manage- ment views in general and specifically how they work out at the Florence Manufacturing Company located amidst perhaps an average small-town environment. How near these views check with average management opinions on the human factor may be seen from a review of the answers factory executives gave to a list of ques- tions sent them. The questionnaire form which was sent out is reproduced on page 109. It may be interesting to take up the questions asked, one by one, and see just how these 63 factory managers have answered them. In the first place there is the main question, ' ' Do you see value in retaining a personal contact with your employees?" Is it not a significant fact and a credit to modern management that only one executive out of the 63 who answered had a negative reply ? It is only fair to say that many of the sets of questions sent out were not returned and very likely some of these fell into the hands of executives who see no value in the development of a closer personal contact between manager and men. Because of a feeling that all the rest of the questions hinged upon an affirmative answer to this first one, some of these executives may have withheld their negative 108 HOLDING MEN answers. On the other hand it is likely that many of those who did not reply were prevented from doing so for other reasons and would have answered "yes." "Decidedly" is the answer two men give, and one adds, "The big problem today in large organizations." "Yes," the superintendent of a shoe supply factory says, "If an employee believes he is working for a man and not for a soulless corporation he does better work other things being equal." LIKK many other methods personal contact may be ■i overdone. Consider it Jrom a business standpoint, and don't let employees mistake it for preference. Some of the affirmatives were qualified. "Yes, to a certain extent," one reply reads. Another says, "Yes, but care must be taken not to obtain a wrong impres- sion." To the second question, "Do you see a danger of overdoing this. If so, in what way?" some interest- ing answers came. Of the 57 who answered the first part of this question 43 saw a danger of overdoing the development of a closer personal contact with the work- men, while fourteen saw no reason for the exercise of I'estraint. Of these fourteen one pottery company exec- utive does "not believe this will be overdone by a pru- dent manager." A Connecticut manager says, "Not if a reasonable amount of dignity is maintained, ' ' and two others contribute practically the same thought in exactly the same words, "Not if good judgment is used." "Not if you are simply friendly and not too intimate," "No danger if common sense is used," add two more thoughts to the discussion. The production manager of an Illinois company bal- ances the question well in this answer, "Not as long as this contact smacks of business only, that is, of the wel- DOES PERSONAL CONTACT PAY? 109 !.» Do yoa gm valos In ratklnlns a personal eontaot with yottr emplovaBa? gftf^ K. So yon see a dauser of OTerdoine tblif If so. In vAiat vas^ «SA '^-fJhtM^iJViUA , o. Ilf your organliation la too large for yon to knew eaoh nan personally, what tnetbods have, you for keeping In personal toaoh with the men throce^ your euhorUnOitea? T^tTT,, t:m r^^g 6. Do yoo^eel that there Is advantage In this procedure from a j viewpoint? yjfyj — f^*^>^ A'VrUI /^0^/ge£<.*cA^>i4fc 6.. Do yoQ Inelnde asun^ the reports .that ym^eut on reoelving notloea of prone- tione of everyone In the organisation? - Do yoa nalce It a point to have a word to pay to the dan promoted?^ ^ yyn^ ^>»^T. f -rf. , Do-yon agree that there is value in a sincere word of this sort t ^fP^^ ■ - 9. Some managers wish to he Informed of slokaees, deaths, new arrivale. and other lnv< I portaut evento in the lives of etnployees : Vhat llnitatlans do yoa see to thla plan?. I portaut evento in the lives of etnployees so thaj^tbey oaa take proi>er notloe of it. 10. How far up in an organisation do yon think th^ P^^ Doationed in the prpvlous qoea- tlon can be oarrled and not smaok of inBlnaeritvy»4o JP^ ''^■'''^^'^'^^^^^^ '' l^'^Ji^ i^' 11. Do you see value in the policy of the ohief exeontive vA^has the porter?. his office door ^r all who real' it dom to l .. What objectiona do yoa vee to snob a Plan? 13. One employer not long ago gave a dinner to the enplotyees who bad been with hln for forty years. What siinllar plans haye^on oerried out to make ycur ne;i feel that yoB are all In one larse family? UCe^JzJ^ ^?i^^^;ti^«^.^/^^g<£>»»..g.«^<- 14. Do yon believe athletlo association events, plcnios, and so on have a value from the personal relationship viewpoint? What io your es^rience? IF TOtI FBEFEB, DISI&CAE IF TOtI FBEFm^ DISI&CAHD 4!HE9B QDESTIOUS AID laOTASS A I£I9EB IB REPLY title <^^^Vr 77ta\.fvim< FORM I: Here is the question sheet filled out by the 63 executives on whose answers this chapter is based. In some cases the executives were so interested in making their views known that they took time to dictate letters supplementary to the questionnaire 110 HOLDING MEN fare of the individual from strictly a business stand- point, otherwise I would say that it may become very detrimental. ' ' Of those who feel that there is danger in overdoing this phase of management it may be interesting to analyze the reasons given. Eighteen believe that over- familiarity is to be guarded against. Eight think that workmen will take undue advantage and an equal num- ber believe that a loss of respect for superiors may result. Five are of the opinion that favoritism is apt to be shown. Two think that although such plans are good they will over-emphasize the value of individuals. Fear of over-familiarity seems to be much the largest warning to heed according to this ballot. This is ex- pressed in a number of different ways, some of which are so indicative of the thought put on the question that it may be worth while to set down a few of them here. "By getting too personal. Works both ways." "Em- ployees may try to become too familiar, and begin to feel that 'getting on the right side of the boss' is more advantageous than doing effective work." "Personal contact can be overdone by getting 'chummy' and lax." "Lack of appreciation or misunderstanding the motive." "Most workmen can't have too much familiarity with the firm and still keep their places. " " The contact must not be too intimate. Talk of work only." "Too much familiarity is apt to cause jealousy." "Familiarity breeds contempt." "Too much familiarity causes slackening of discipline when a rush comes." A thought along similar lines is that of Stephen B. Mambert, Vice President and Financial Executive of Thomas A. Edison, Inc., who writes, "Yes, extreme care must be exercised not to carry personal contact to the point DOES PERSONAL CONTACT PAY? Ill where it causes some individuals to feel that they are in a preferred class." ' ' Too much attention cannot be paid to the subject of personal contact with employees," is tJie opinion of George A. Sagendorph, general manager of the Penn Metal Company. "Of course," he says, "it may be overdone, and you will find at times people who will take undue advantage of your good intentions, but the ulti- mate value of work along this line can readily be seen by anyone who has followed it intelligently for even a short space of time." This really sums up the opinion of practically all. It is only eases of individual workmen that managers have in miad when they speak of the danger of overdoing the cultivation of a closer personal contact with em- ployees. Thia is evidenced by the fact already men- tioned that all but one who sent answers see value in elo^e relations. Several feel that lack of respect for superiors will follow unless properly handled but, as an executive prominent in the Packard Motor Car Com- pany says, "This can be avoided by tact on the part of the head of a business. Naturally in order to obtain discipline, the minor ofScials who have direct charge of the work, must have the respect of the men. If the men felt that they could go over the heads of minor oflScials there would be danger. ' ' Another angle on the same thing is brought out by L. J. Vorhees, works manager of the Providence Manu- facturing and Tool Company. He says, "When an em- ployer carries this to such an extent that it becomes dis- tasteful to the employee or lowers his standards in attempting to meet the employee on his level to such an extent the employee loses respect for the employer." Care to avoid favoritism and the consequent growth of 112 HOLDING MEN jealousy among the men apparently is alsa necessary in good maneigement. Two of these 63 factory executives who favor close personal contact with employees feel that unless han- dled wisely it will give the men a sense of over-impor- tance, encourage the magnifying of trifles, and add to the burden of executive duty. The third question asked was the following, ' ' If your organization is too large for you to know each man per- sonally what methods have you for keeping in personal touch with the men through your subordinates?" Of those whose organizations were of sufficient size to come under this question 55 per cent reported that they accom- plished results through assistants. Another group felt that they had succeeded in retaining a personal contact through foremen's meetings. A third and smaller group were of the impression that a close perusal of well-kept employees' records was a good method to follow. WHY the department managers and foremen should be trained to act as mediums through which the executive head can keep in close touch with his men. "When an organization grows beyond the stage where the head of the business can know the individual work- men the answers seem to indicate that the foreman is generally relied upon to retain the desired personal contact with the men. Whether or not this is successful is open to question. Dean Marquis of the Ford Motor Company has said, and many agree with him, that it is comparatively simple to get management policies to filter down an organization to the foremen. But here they are quite likely to stop. If this is true in a general way isn't it doubtful whether the desired sort of per- sonal contact is being obtained by way of the foremen ? DOES PERSONAL CONTACT PAY? 113 One interesting reply from a large silver manufactur- ing concern contained this, "Our employment man spends all his time when not actually interviewing appli- cants, in going round the factory and finding out how men recently hired are getting along with their work." This procedure must have the' effect of making a new man feel that he has a very definite relationship with the management. Harry Franklin Porter, organization engineer, De- troit Executives Club, contributes these suggestions that are worth thinking over, "Keep efficiency records of each man. Train immediate supervisors to take a personal interest. Have a department to which the men may go freely." Also of interest is the following state- ment of the superintendent of a large knitting mill, "When our factories outgrew the 'small factory idea' I started to surround myself with the brainy depart- ment heads. I keep in touch through them. ' ' One New Jersey executive says, "I invariably make it a point to inquire about new men and make their acquaintance by direct approach." "Acquaintance is automatically made through applications for wage increase and changes of work," one Connecticut manager adds. From Thomas A. Edison, Inc., comes this interesting answer, "By a combination of staff and line organiza- tion — the line organization keeps up the personal touch." Practically every manager who answered has a policy of going over the plant fairly regularly. Many seem to have the opinion of one production engineer who says, "It is a good plan to do this and to talk with individ- uals, thus getting their viewpoint. Often troubles will come to your attention that you never knew existed and which you could never discover any other way." 114 HOLDING MEN By far the greater number make this trip as often as once a day; in fact, four-fifths of those who answered question four go that frequently. One said he made a trip as often as once an hour at certain times. In mak- ing these trips there seems to be a desire to go by differ- ent routes or at a different time of day so as to preclude any possibility of the men anticipating a visit. "Unless you do this," one man says, "you won't see the general run of things." Only two managers fail to see a value from the per- sonal contact viewpoint in such trips about a plant. In fact, such phrases as the following were used in answer- ing question five, "Decidedly, the men feel the manage- ment js taking a personal interest in their work." "I know there is." "Has a decided advantage." "Yes, makes men feel their individuality is not lost in the multitude." "Absolutely yes." "Decidedly so.'" "Most assuredly." "A very large one." "Yes, from the example set." An interesting thought is added by the works man- ager of a Rhode Island concern who says that he makes the trips often enough so that the men will be sufiB- eiently accustomed to seeing him in the factory so that they will not change their habits or methods of work when he passes them. Another executive adds, "It is decidedly advantageous for the men to know the head of the business by sight at least." Still another feels that he keeps in better touch with the foremen through these trips. The sixth question read, "Do you include among the reports that you insist on receiving notices of promo- tions of everyone in the organization ? ' ' Eesults on this question show that much the greater number do make it a point to know about all promotions. One manager DOES PERSONAL CONTACT PAY? 1 15 who sends out notices personally of all promotions in the plant adds, "but I always make mention in notify- ing the men of promotions that they are at the recom- mendation of the foreman." Still another factory executive writes in answer to this question, "I certainly do. This method serves to keep you in close touch with your organization and is an important part of the system." "Yes, even increases in wages of a few cents per hour," is the way one Massachusetts general manager answers. "Certainly" and "always" seem to be characteristic replies to this question, indicating the importance of handling promo- tions in this way where the size of the organization will permit. But, of course there are cases where this is not possible, such as is indicated by the following: "As our plant employs 12,000 men, I cannot personally talk to all the men promoted, but I do talk to all men pro- moted above the position of sub-foreman. A proper talk to a man at the time he is promoted by the executive head of the business is of the greatest importance. There are more men who would like to do what is to the best interest of the company than there are companies who keep them so informed." EXTENDING the sphere of the employer's interest in his men into their home life, even aiding in sickness or financial trouble, is favored by many employers. Question number eight naturally received about the same answer as did seven. One was a matter of prac- tice and the other belief in the value of the practice. "Some managers wish to be informed of sickness, death, new arrivals and other important events in the lives of employees so that they can take proper notice of them. What limitation do you see to this plan ? " This 116 HOLDING MEN is the way the ninth question read. About half of those who answered were in sympathy with the plan and a number of others thought it a good idea but too much of a time consumer or difScult of attainment in a large plant. A half dozen thought it smacked of paternalism, but only one distinctly did not believe in it. The vice president in charge of manufacturing in one large company says, "If it were possible, I believe that in the case of sickness, death or financial trouble a repre- sentative of the firm should call upon the employee at his home and assist him in any way possible. There is nothing in my judgment that would be of greater stimulus to loyalty than sincere help and thoughtful- ness in any time of adversity." It is suggested by one answer that the company house organ or factory paper should take note in its news columns of all matters of this sort. An important point from the utilitarian angle is brought out in this answer : ' ' This is of vital importance, especially the report of sickness and absence. I believe that each absence should be investigated. For my per- sonal experience in these investigations which I always make have discovered many employees who have been absent on account of headaches caused by the lack of glasses, poor teeth, abnormal habits and so on. I have been able to correct a good many cases, not only reliev- ing the patient of suffering but making the employee far more efficient." C. F. Hathaway and Sons say that flowers and per- sonal calls are important in cases of sickness and death and each new arrival receives five dollars to start a bank account. One solution of the plan is that suggested by a manager in these few words: "I keep in touch with the health of department heads and they with others. DOES PERSONAL CONTACT PAY? 117 The service department does the rest." As defining the limitations of the plan, one manufacturer says that they are at the point where the personal overshadows busi- ness relationships. Another manager would limit any action to the spoken word. Questions eleven and twelve brought some interesting answers as there were divided opinions. The questions read: "Do you see a value in the policy of the chief executive who has 'walk in' printed on his office door for all who read it, down to the porter? What objec- tion do you see to such a plan?" Many took the ques- tion literally and so while in sympathy with what might be called "an open door policy" did actually suggest leaving the office door open rather than labeling it "walk in." Of course, what was intended of these two questions was to bring out the value of having men feel that they had access to the head of their firm as a matter of course. "Certainly" is the answer a Massa- chusetts manager gives, "Any executive handling men should be approachable and known to be so." An in- teresting point is" made in the letter written by A. S. Bond, President of the Packard Piano Company, who says : ' ' This sign amounts to nothing unless the execu- tive has the confidence of his employees, and having that he does not need any such sign." Several suggested that this policy was a wise one, although it was subject to abuse unless cheeked in some way. Checking, however, may exactly defeat the pur- pose of the plan. This is overcome in one Boston fac- tory by having it understood that employees who fail to get satisfaction in taking the matter up with their super- visor are at liberty to come to the manager with it. On the other side of the question such answers as this were received. "No value absolutely." "No! Work- 118 HOLDING MEN men' feel that the sign does not apply to them." "Let action speak." "Bunk. Looks like a blufiE and is." Question thirteen was asked with the idea of bringing out various special plans for bringing workmen in closer contact with the management. It read, "One employer not long ago gave a dinner to employees who had been with him for forty years. What similar plans have you carried out to make your men feel you are all in one large family?" Picnics and outings, profit sharing plans, dinners, dances, clubs, smokers and athletic events, share about alike in the answers. Of the 47 factory executives who answered question fourteen, "Do you believe athletic association events, picnics and so on have a value from the personal relationship viewpoint?" only six answered in the negative and one other was douJbtful. The president of one concern rather pessi- mistically writes that it organizes employees for the agitators. Another man without giving reason says, "I believe they do more harm than good." The general thought, however, is that expressed by one man in these words, "I thoroughly believe in athletic organizations and picnics as a great stimulus to a better understanding among the employees and a better knowledge of each other." C^ THE great thing is not only to make the man working for wages actually a partner interested vrith the employer, but to let him show that he has such a relation and that his wdfare and the welfare of the employer are idenUcdl. When, this basis is established most differences vntl solve themselves. James A. Farrell, President of the U. S. Steel Corporation PART IH-BREAKING IN AND DEVELOPING MEN Founding a Business T TNDER the building recently erected by But- ^^ ler Brothers stand one hundred and ninety- two caissons, six feet in diameter, extending down to hardpan seventy-five feet below the basement. If, before the superstructure was erected, the earth had been excavated from about these cais- sons, they would have appeared like a forest of huge concrete columns rising high in the air. And yet, as one looked upon the work just be- fore the basement was walled in, he saw no evi- dence of caissons; only the trampled pit. There was nothing in sight to indicate the mighty lift- ing power that had so patiently been prepared for the lofty structure to come. And thus it is with a great business, although the unthinking man does not appreciate this fact. He tries to build a business upon the shallow foundation which he sees, without providing cais- sons that go down to the solid rock. He over- looks the fact that back of and under every great success there are years of right thinking and right doing — cemented columns of honest effort and honest dealing — which, like massive piers of concrete, will sustain that business from genera- tion to generation. ??Z^«*«^,^ (^^'^^ EDWARD B. BUTLER Chairman of the Board of Directors of Butler Brothers XI FITTING INSTEAD OF FIRING MEN By W. S. BaU Based on an Extensive Investigation NOTHING but firing would do for Johnson, the fore- man was sure. But the superintendent looked doubtful. He explained that Johnson had been with the firm a good while, and had been considered one of its best men. All this was true, the foreman admitted, but in spite of it he insisted that the "grouch" which Johnson had been showing of late was becoming expensive. . "It wouldn't be so bad if only Johnson was affected by it," he explained. "But it's affecting the others. You can't keep a department running when one of the oldest men in it gets sulky and soldiers on his job." "Perhaps it's something he'll get over," suggested the superintendent, "family troubles, or something like that." "I've asked about that from those who know him," said the foreman. "There isn't a thing that I can find out to account for it. I hate to let him go, but I don't see any other way." The superintendent pondered the case a minute. "Perhaps we'll have to," he finally agreed. "But Johnson has been too good a man to drop in a hurry. Suppose you keep him on for another week. I'll think it over." 122 DEVELOPING YOUR MEN Now the interesting thing about this incident is that it could really happen at all. Ten years ago — ^five years in many shops — there would have been no hesitation at all about "firing" Johnson. A workman who developed faults that outweighed his usefulness had short shrift. "Workers were usually plentiful; why bother with one who presented a personal equation that had to be solved individually ? But employers are coming to realize that, even if no other motive were involved, it costs money to break in new workers. More attention than ever before is being paid to the hiring of men, in order to secure those adapted to the work, that the waste of misfits may be avoided. Similarly, "firing" is not the light affair that it was once supposed to be. NOWADAYS firing is being considered as scientifi- cally as hiring, and faidts are "cured" before the worker becomes a candidate for the "blue ticket". Modern efficiency believes in curing faults, if pos- sible; in teaching those who are teachable; in transfer- ring from one kind of work to another until the round peg fits the round hole. "Firing" is regarded as a last resort, reserved for certain flagrant sins or incompetence that have persisted through numerous opportunities. This means that more attention than before is being given to the personal side of industrial discipline. The man who is skilful in handling men has always been an asset in any business, but today he finds himself in still greater demand. And many a worker would be amazed to know the efforts that are made by his superiors to overcome his faults or to bring out his best without resort to the fabled "blue envelope." For this kind of discipline no fixed rule is possible. General principles FITTING INSTEAD OF FIRING 123 must be modified by the personal factor in individual cases. The skill of the foreman or superintendent is measured by his ability to size up motives and the forms of aippeal that are most likely to prove effective. As a case in point, consider the treatment which transformed Johnson, whom the foreman wanted to discharge. A few days after the conversation between foreman and superintendent, the latter spent some time in the foreman's department, ostensibly on business connected with an important order which was being rushed through. He noticed several apprentices working in more or less haphazard fashion, under a variety of tute- lage. Nominally, they were responsible to the foreman. Actually, they seemed to be responsible only to the dic- tates of their own ambition, plus the authority of the nearest journeyman, for the foreman had little time to devote to instructing them. Presently there was another heart-to-heart talk be- tween foreman and superintendent, after which the foreman made for Johnson. "Mr. Johnson," he said, "I'm not very well satisfied with the way those appren- tice boys are getting along. They bungle through their work and there isn't anybody in particular to see that they learn what they're supposed to be learning. I wish you'd keep an eye out for them as much as you have a chance to, and see that they keep on the job. Don't let it interfere with your regular work, but give them a lift when you see they need it. They're not learning what they have a right to and what we want them to, if we expect them to be of value to us." A guttural monosyllable was the only answer Johnson saw fit to give. It might have indicated anything from distaste for the task to disapproval of the entire appren- tice system. The foreman, who was skeptical, awaited 124 DEVELOPING YOUR MEN the result in some doubt. But within a week he saw a difference. In a month he was enthusiastic. The grouch had disappeared ; Johnson was not merely taking a lively interest ia the welfare of the apprentices, he was dis- playing keener satisfaction in his own work. The latent sense of responsibility had been called into play, and the factory was gaining not only from his improved work but from the greater attention given the apprentices. The incident is a conspicuous illustration of the modern application of the theory that "firing comes last" as a remedy. The superintendent's interest in the affair, it is true, may have gone farther than it would but for the fact that he wanted to give that particular foreman a lesson in the art of management. Ten years ago Johnson would have been fired without question, the apprentices would have continued to learn in haphazard fashion, and the foreman would have missed a valuable pointer. The economic advantage of the new method is easy to recognize, if not to figure in dollars and cents. In general, it may be said that the new type of dis- cipline is based on the "rule of reason" to a greater extent than in any previous system. Once military dis- cipline, with no explanations and no room for questions, was favored. If the individual did not give his best work under this system, that was supposed to be the individual's loss. The loss in shop efficiency was' not considered. There are workers who stiU prefer that form ; they have no desire to reason why ; theirs but to do or — be fired. As a rule they are the ones who like to avoid responsibility. Suggestions for improved methods are not likely to come from them. The best worker is pretty certain to be the one who appreciates a knowledge of the reasons for any devia- tion from routine methods. A straight appeal to reason FITTING INSTEAD OF FIRING 125 may even correct a fault that could be made to yield in no other way. But it must be a reason that in the mind of the worker is not trivial and one that comes within the range of his own point of view. An employer of skilled labor, averaging about four dollars a day, noticed that a few of his two hundred men were in the habit of knocking o& work to clean up about five minutes early at noon and night. If the habit were allowed to go unchecked it would have been only a matter of time when all the two hundred would be following this example. He might have corrected the offenders and then, if they persisted, discharged them. This would have remedied the difficulty, but it would have left a feeling of discontent at what the men wou]^ have considered petty tyranny. They were looking at the thing from the point of view of ten minutes or so out of a nine hour day. To them it seemed a trifling matter. No remedy that failed to correct that impres- sion could succeed. THIS manager got right down to brass tacks with the men. Waste of time stopped when the workers realized the money loss it meant to their employer. He might have pointed out that ten minutes of lost time for a four dollar man was approximately seven and a third cents. This would merely have translated time into terms of money and left the flavor of pettiness. It is easy to imagine that "seven and a third cents" becom- ing a shop joke at the expense of the employer, the effect of which would have revealed itself in a hundred ways too scattered to be recognized. What the employer actually did was to have a talk with the most influential of the offenders, in which he pointed out what they all knew, that the industry was 126 DEVELOPING YOUR MEN in a position to expand, but that it needed additional capital with which to do so. Then, referring to the ten minutes a day which some of them were consistently wasting, he said: "Ten minutes a day wasted by each of you two hundred men would decrease the borrowing capacity of this industry over eighty-five thousand dol- lars." He did not have to .wait for a question in order to furnish the answer ; their uncomfortable laughter fur- nished that. He went on to show that at an average wage of four dollars a day for two hundred men, ten minutes a day meant $14.80, which in a year of three hundred days amounted to $4,440, and that $4,440 was five per cent interest on more than $85,000. "You see, gentlemen," he concluded, "what a thing that seems insignificant to you means to the develop- ment of this business." They saw, and the petty pilfer- ing of time stopped abruptly, while instead of ridicule and loss of respect for the employer the men had an increased respect for the significance and importance of their own jobs. ^ A MACHINE is a unit of a "plant investment" with very restricted limitations. It performs today what it did yesterday, provided it is well taken care of, protected from harm and abuse, oiled, fed with power and given periods for rest and repair. A worker is a human being, the highest expres- sion of cosmic creative power, a person of peculiar inherent abilities, capable of great development, with thoughts and feelings responsive to human interest and justice. William Abmstkonq Fairburn, President, Diamond Matclr Company XII "GROWING" YOUR OWN EXECUTIVES By Harry Franklin Porter, Organization Engineer A YOUNG workman en route home from work one afternoon was engaged in conversation by a stranger who happened to be passing the same way. After a few casual interchanges, the subject turned to the one's occupation. This was more by design than by accident, on the part of the stranger, as he cherished a fondness, which he pursued on every occasion, for investigating labor conditions from the men's side. "That's a pretty fine place where you are employed," said he. "Yes, I guess so," replied the workman, without enthusiasm. "Out here in the country, with beautiful surround- ings, the buildings modern and sanitary conditions excel- lent, I shouldn't wish for any better place if I were a shopman," continued the stranger. "Oh, it's all right as far as that goes," was the rejoinder. "But there is something you do not fancy about the place?" interrogated the stranger sympathetically. "Is it the pay?" "Well, no ; not exactly. They pay you pretty decent. I ain't got much kick comin' on that score." "What is it, then, that you don't like?" 128 DEVELOPING YOPR MEN "Well, it's just this: a feller like me has no chance to get ahead. When there's a good job open, they never give one of us young fellers a show; they always hire in some new guy. I wouldn't mind if none of us could do the work; but they don't seem to care whether we can or not. I'm going to leave as soon as I get a good open- ing where they give a feller half a chance to get ahead. ' ' He said this with such finality that the other did not feel disposed to press the' conversation further along this line. So after a few pleasantries the two parted. This young workman, in his homely way, gave vent to a sentiment that stirs in the breast of every normal, healthy human being. It is a main propelling motive of masters of affairs; it is scarcely less a dominating force with working men in all grades. Good pay with prospect of increase is one element; agreeable occupation amidst pleasant, healthful surroundings is another; but these without the spur of promotion are inadequate to keep men satisfied, much less to stimulate them to put' forth their best. To develop men's efficiency and cement their loyalty, it is necessary to hold before them steadily a higher goal. They will even work for less pay, and tolerate annoying and discomforting conditions, if only they may be as- sured of a future in some degree commensurate with their ambitions. There is no line of industry today which will prove an exception to this statement. Wise managers recognize this trait of human nature and study constantly to keep open the door of advance- ment in their establishments. More than this, they seek assiduously to develop the talent in the ranks. In other words, they not only strive to keep open the door, but they lend a hand in helping their workers forward to it. And experience shows that when men feel a push "GROWING" YOUR OWN EXECUTIVES 129 from below as well as a pull from above they are spurred to the most. Moreover, purely on economic grounds, it pays to advance the men you have. To carry out a policy of systematic development, it is true, involves some expen- 1 diture ; but continually to be introducing new men from the outside is much more expensive. No matter how promising a new man may be, he is still "raw material," and before he is thoroughly trained into his new posi- tion he will be costing you more money than he is mak- ing you. One manager estimates that it costs him two hundred dollars to break in a new man and bring him up to standard. In addition, there is the effect on the general efficiency of the department to consider while the newcomer is being assimilated. HOW assuring workers that ability and merit wUl he recognized and rewarded by advancement en- courages them to increased endeavor. Besides, the expense of training men for advancement is not nearly so great as might be supposed. Once let the information thoroughly permeate the organization that you are genuinely interested in seeing that every man has the opportunity of making the most of himself, that ability and merit will be recognized as promptly as possible and be rewarded by promotion, and auto- matically each workman in the establishment who has a spark of ambition in him will begin to prepare him- self for something better. During work hours he will keep his eyes and ears open to pick up every scrap of information he can. Place a library at his disposal and you will find him taking advantage of it at every occa- sion. He will even begin to pursue studies in a night school, if the community affords this advantage, or take 130 DEVELOPING YOUR MEN up a correspondence course. Thus the amount of special training you will have to provide will be small compara- tively, and the expense involved viewed as an invest- ment — ^which it really is — ^will yield particularly rich returns. This policy is wise also from another angle. No one knows the day and the hour that the most important position in the organization may become vacant, through the exigencies of death or otherwise; and the further down the line you go the greater are the possibilities of unexpected gaps occurring. To be prepared at all times, therefore, to meet any emergency in this respect from within your own ranks is simple business foresight. It is comparable to carrying fire insurance against the ever-impending blaze. So, when a vacancy occurs the first place to look for a new occupant is in your own factory. Give your own men the first chance in every ease. 'More than this, be looking ahead constantly to help qualify likely fellows for possible openings. Then you may be sure that you are doing all you can not only to safeguard your organization, but to instill and foster in it that most energizing of all forces in man's nature — hope. "The one thing beyond all others that is needed for success," declared one of the foremost industrial engineers in the country at a recent meeting of the Efficiency Society, "whether it be the success of the worker or the success of the intellectual man, is hope. This is the most important element to foster, cherish and keep in the minds of all working men. In order to give hope you must first of all have in your mind, in the bottom of your heart, the welfare of your men. The moment a manager takes this for his ideal, the moment he says, 'It is my duty in life to develop our men,' he "GROWING" YOUR OWN EXECUTIVES 131 will see that it is the part of management to do an enor- mously larger amount of work than has ever been done in the past in teaching, in training, in helping men. Scientific management does not come into existence until the owners of a business, all those on the management side, have the building up of their men, the develop- ment of their men, as absolutely the first thought in their minds." Men often develop faster than there is opportunity for their advancement. "When they do, it is a healthy sign; but therewith comes a complication of the man- ager's problem. "Workers who are too good for their positions are the most difficult of all to keep satisfied. They are like a stream whose waters have been dammed up. Some will overflow into criticism and complaint, which affects adversely both the esprit de corps and their own efficiency — if they but knew it. Others will sulk themselves into stagnation, the effect of which is almost equally demoralizing. Still others will pass on and out at the first opportunity, ofttimes to their better- ment, as often not. Whether to their loss or their gain, it is, in any event, to the management's loss, both directly and indirectly — ^through the creation of a spirit of unrest and dissatisfaction in the ranks. There is only one way to combat this situation: take the initiative yourself in finding good positions elsewhere for those who have outgrown your establishment. This is the policy of a number of broad-minded and far-seeing man- agers. These figure that it pays occasionally to promote a man outside for the sake of keeping the organization keyed up to the highest pitch. On the other hand, nothing could be more disastrous to a factory than to have it looked upon as a mere train- ing school for other places. This is a tendency the 132 DEVELOPING YOUR MEN manager must rigorously oppose. Various counter- actives will suggest themselves. Higher pay, better working conditions, a more advantageous benefit and pension plan than elsewhere ; the ownership of homes in the vicinity; profit-sharing; opportunity to become stockholders — ^these are a few of the measures that have been found effective in holding good men. To make promotion in all cases, whether outside the organization or within, contingent upon training of a successor, also is beneficial. It acts like a governor upon ambitious young bloods. In their impatience, these frequently err in thinking that they are -ready for advancement when they are not. The test is their willingness and ability to teach someone else their job. Surely no one is quali- fied better or more economically to instruct another than he who has become so expert in a task that he is ready to take a step higher. Rarely does such a test fail to detect any weakness. And the mere doing of it increases his value. Thus the benefit is twofold. HOW the 'promotion of employees can be handled so as to attain the best results. Why promoting men from the ranks ads as a general incentive^ A large organization, where operations are highly departmentalized and specialized, seldom has to resort to the expedient of outside promotion. For within the works, as a rule, there is abundant opportunity to use all the ability that may be developed and the advance- ment possible is such as to satisfy the desires of the most ambitious. On this account the larger plants, if also they are highly efSeient, tend to attract the cream of the talent, just as our thriving metropolitan cities are lode- stones for the best blood of the rural districts and small towns. Consequently the smaller a plant the greater is "GROWING" YOUR OWN EXECUTIVES 133 the need for an adequate scheme of promotion which will include graduation to higher positions elsewhere. Merit, of course, must be the first basis of advance- ment. Length of service needs also to be weighed, but only when other things are equal may it safely be given first consideration. Nothing could be more dampening than to make seniority the chief test. On the other hand, the effect is almost equally dispiriting of failure properly to weigh this element. Faithful ^Service always is deserving of its due reward. Relationship to one in authority or < any personal claim to favor, needless to say, can have no place if the scheme of promotion is to succeed. The only safe way is to judge men strictly and impartially on their records. Merit also must be the chief criterion in bringing in an outsider. However excellent is the policy of filling vacancies from the ranks, inflexible adherence to it is sure to result in a giradual letting down all along the line. Give your own men the first chance but do not hesitate to introduce new blood if the issue has nar- rowed to one of fitness purely. When your men know that vacancies will be filled this way, in case none of them is sufficiently developed to qualify, they will be stimulated to increased endeavor. Moreover, occasion- ally it pays to bring in a new man for the sake of the invigorating reaction of a fresh viewpoint upon the atmosphere of the shop. But guard car ef idly lest this departure from the established rule be construed as an undue discrimination against old hands. Barely is it necessary to have recourse to an outside supply, except of course for beginners and common or unskilled labor, and as a rule all newcomers, regardless of their previous experience, should start in at the lowest level. From these should come the semi-skilled work- 134 DEVELOPING YOUR MEN men, and from this class the skilled machine operators and tool makers. Normally in turn the skilled class should furnish the foremen and other responsible heads. But because a man is an excellent workman, it does not follow always that he will make a satisfactory shop executive. As a matter of fact, it is the experience of managers that the best mechanics often make the poorest foremen. "We promote a man from the ranks when- ever we can," said one manufacturer, "for we prefer a foreman who has intimate, practical knowledge of the work he is to supervise. Unfortunately, however, few workmen possess the qualities essential to success as a foreman. Leadership ability we deem more important than ability actually to do the work, for a bright fellow who knows how to handle men will soon enough learn the other part of it. Therefore, we do not hesitate to go outside to get the man we want." Often, too, a work- man elevated from the ranks who has the making of a good foreman will fail to fulfill expectations because of his inability to work himself free from his former asso- ciations. "Familiarity breeds contempt." If he has the right stuff in him, however, and receives the proper backing from above, he will in time overcome this handi- cap. It is wise, at any rate, to give one of your own men a fair trial, for the sake of the encouragement thereby afforded the remainder of the good men in the department. Besides, you have accurate knowledge of one who has won his spurs as a workman, whereas a newcomer, no matter how promising, always is more or less of an uncertain quantity. One manager found effective the expedient of getting his foremen from other departments. For instance, he took a high-grade foundryman and made him foreman "GROWING" YOUR OWN EXECUTIVES 135 of the ehippers and grinders. Por his chief product inspector he took a foundry clerk ; for superintendent of factory transportation, he took a checker in the ship- ping room. Occasionally he drafted a foreman from one department for service in another. In this way he avoided both the incubus of familiarity that attaches to a workman elevated to the foremanship in his own department and the dispiriting effect that attends the bringing-in of a total outsider. As he exercised rare discretion in picking his men for their leadership quali- ties and keenness of observation, he almost never scored a failure. An unexpected gain incidentally resulted. Men shifted from an initial to a final department showed greater patience with the shortcomings of preceding departments and were more constructive in their criti- cisms thereof, while those transferred in the reverse direction evinced an uncommonly deep interest in all the details of the work that affected the production of succeeding departments. A higher standard of work- manship thus was promoted throughout the plant. SOMETIMES good results can be obtained by depart- ing from the beaten track, and promoting men of specialized knowledge into positions in other departments. This same expedient often is equally successful with respect to the positions of broader executive responsi- bility. An Iowa manufacturer of agricultural ma- chinery, for instance, when his establishment had grown so large that he felt the need of an assistant to him- self, called to the post the sales manager of one of his branch offices. He did this in lieu of promoting his superintendent because he wished to have more of the sales viewpoint impressed upon the shop. The new manager was handicapped, of course, by his lack of 136 DEVELOPING YOUR MEN practical experience in manufacturing, but he knew ■what constituted a salable product. Besides, he was possessed of a keen observation and no little executive ability, and in the course of a year or two, under the careful tutelage of the president, he demonstrated his worth completely. Quite the reverse were the reasons of a Pennsylvania metal furniture manufacturer for choosing for his new general manager, to have direction of both production and sales, his shop superintendent. He had been troubled for years with a flood of special orders and he wished to have one in control of the two ends of the business who had a vivid appreciation of the effect on manufacturing costs of promiscuous departures from standard. The new executive speedily proved his value by training the sales force to push regular lines almost exclusively. Logically, foremen should be in line of promotion for the higher positions. More infrequently, though, are these qualified for larger responsibility than workmen are fitted for foremanships. For one reason they usually lack the broad outlook requisite. Again, for men who shall have general direction of work, some technical qualifications are preferable if not essential. It is a rare foreman who is fortified for advancement in this respect. Accordingly, for the higher positions the source of supply must of necessity be largely outside. But the demand for men of this type is always in excess of the supply. Full-fledged superintendents and factory managers are not often found foot-loose and free, waiting to be snapped up by the first comer. It is necessary as a rule to bid for the service of such, and sometimes to bid high. Even then it may be impossible to get the man you need when you need him. "GROWING" YOUR OWN EXECUTIVES 137 In anticipation of the usual diflBculty a Wisconsin maker of sanitary ware, foreseeing the necessity of replacing his superintendent by a younger and more energetic man with a broader and more scientific view- point, hired a young engineer graduate who had a year or two of practical expjerienee along efficiency lines. He kept him at this same sort of work for several years, moving him from operation to operation until the entire round had been covered. Then, one day, as if by no intention, the young engineer was put in charge of a department. He is succeeding splendidly and it is only a question of time before, again as if without design, he will be advanced to the superintendency. Some day he will be called still higher. Similarly it is the practice of a number of leading manufacturing concerns to take on every year one or more promising technical school graduates with a view to the future. These are started at the bottom, pushed forward as rapidly as possible from one class of work to another until finally, if they demonstrate the proper aptitude for shop life, they are elevated to positions of executive responsibility. By this means the occasion for departing from the established policy of fiUing aU vacancies from the ranks, even in the ease of the highest positions, is reduced to a minimum. IF IN the days to come, as you have to do with labor, you mil put pourself in the other man's place and govern your action by what you vxmld vnsh done to you were you the employee instead of the employer the problem of the estab- lishment iifihe personal relation in industry vxmld be solved." JOBN D. RoCEERFELLSB Jb. A piece of labor handling advice given altidentt of CoTTtell Univerealg i XIII THE BUILDING OF MEN An Interview with Edward B. Butler, Ctutirman of the Board of Directors of Butler Brothers By Carroll D. Murphy EVERY business concern, whether large or small, is eagerly looking for men of promise. And it is the experience of nearly all that they can find such men, but the difficulty lies in their inability to hold them. It is no longer considered a misfortune, as it was thirty years ago, for a young man to change a^bout from posi- tion to position. Again, there are too few who are willing to work hard, even though they must know that a large measure of success awaits the result of their labor. To get men to, work with anything like the same interest you have in your own business, you must show them that you are relying upon them. We all have our responsi- bilities. Too many young fellows feel that they have none. In any great business, the employee is responsible for the good opinion of that house. Quoting Mr. Butler "we like to remind our people that when a voice goes to a customer over the telephone, it is Butler Brothers who is speaking. When an usher meets a customer at the front door, it is Butler Brothers shaking hands with that merchant. And, by the way, you can, in a measure at least, judge the house by the tone of voice which comes to you over its telephone, just as you can at times judge the head of a house by the attitude of the usher whom yovL meet at the entrance. ' ' THE BUILDING OF MEN 139 Kesponsibility extends beyond the routine work. He who does his work by rule may think he does his duty, but the man who reaches the higher place is the one who does his duty and a little more. One man, in passing through the hallway, discovers' that a window has been left open and that the rain has been beating in. It may not be that man's business to close windows. That belongs to the operating department. But passing by, he gives the matter a thought and closes the window. Another man would not have done it. It is the one who closed the window who is the most valuable man. He thinks'. MANAGERS oj men ahovld remember that they are directing men and not machines — the occasional friendly word often gives a spur to more effective vxrrk. It is difficult to get some men to let go of details; to grow up into control; to think for the men who do not think. In every business there is some one man who can do the work of three. The trouble is that, as an individual, he cannot do more. To capitalize that man's ability, he should be put in charge of three dozen men, and he should be taught to direct the energy of all. Any man who is at the head of a business that has grown to large proportions naturally has a keen interest in the future of that business — in its continuation after he has gone. His greatest concern will naturally be in the building of the men who are to become its future leaders. But one man's efforts alone will not go far to develop the necessary individual interest and initiative. The department heads all along the line must keep up this work. The head of every sub-department also must become acquainted with his people. 140 DEVELOPING YOUR MEN Not only must he know them in their hours of work, but he must know something of their home life as well. The head of a department should so organize his force that his people become almost as a family group. The boy in this department ofttimes needs brotherly advice which his chief can give him better than anyone else. It is in such a department that the "Good night" to one another is heard as they leave for their homes. It is in just such ways as this that the department head can supply that spirit of good-fellowship which is so generally lacking in the big house. You will hear a good deal, in almost any business, about letting the new man or new boy "work out his own salvation," but that does not mean that he is not to be ■ taught. He must be helped. If not, the average man will soon lose any enthusiasm that he may have had. A word of encouragement and suggestion from his chief will often set him on the right track. If he is making good, tell him so. In a big modern business, the head of a department is so busy that he often forgets the value of the depart- mental family spirit, and being out of personal touch with his people, he is unintentionally unfair at times. One of his men comes in late ; but, being a stoic, he offers no excuse. He goes about his work carrying his burden alone. It may be that at home he has a sick mother with whom he has been up all night. In the little busi- ness, this fact would have been known by his superior, and the question in the morning would have been : "How is the mother?" That thoughtful question would have made a big difference to the worker. The right kind of comrade- ship in a department is, as you will see, all-important in the development of good people for a business. THE BUILDING OF MEN 141 Without the right men, you cannot have the right spirit. Without the right spirit, you cannot have the right men. Spirit is the most valuable asset that a house can possess. Spirit is something you cannot make. It is something you cannot buy. It has to grow. It grows out of a belief in the heads of a business. It is a plant so delicate that it cannot survive in an atmosphere of favoritism, or where push or pull has any place. One of the vice-presidents of Butler Brothers likes to tell about his first day with the house. He started in as a lad of sixteen, and on the first day was set at work sewing buttons on sample cards. The day was hot and sultry. The work of pushing the needle through the stiff cards had hurt his fingers. He was to receive three dollars a week, and he says that by noon he had planned exactly what he was going to do about the half-dollar he was to earn for the first day's work. He wasn't coming back for it, as he had decided. He was through with that job. But he tells that during the afternoon one of the members of the firm came to him and said, "You are sewing those buttons on very nicely, but you are not doing it in the best way, and you are hurting your fingers. Let me show you how to do it." The result was that instead of quitting his job, he went home, and, flushed with pleasure, told his mother how a member of the firm had complimented him and then had shown him a better way to do his work. His enthusiasm responded to this first sign of encouragement and he has since been one of the strongest forces in the development of a great business. How costly to that business would have been the loss of that man! This illustration goes to show the importance of giving every one a fair chance. The wise department man will 142 DEVELOPING YOUR MEN listen to suggestions from the smallest boy in his group. In this manner fiome heretofore unknown young man may reveal himself. It is a great thing to. discover a man. Think what it would mean to discover in the form of an untried youth one who was destined to become a great business genius. Or, better still, to help a man to discover him- self — ^to find himself. Some men find themselves easier and earlier than others. Many men have a seed of ability, to develop which needs only the kindly encourage- ment of their superiors. If you know of any men who have fallen into the habit of thinking that others have appropriated all of the opportunities, that none are left to them, just tell them to think their way out of that belief. And if they will do that, they will have made a good start toward that future thinking which so certainly means success. THE average young man is going to devdop in business aecording to the training he receives. In taking young men into our organization, we therefore assume somewhat of a moral responsibility. They consign themselves to us as so much raw material. It is not only up to us to help them make good, but to stand behind them and back them up ■while they are in the process of "making good". C. H. Slocum, President of the St. Paul Book and Stationery Co. XIV SHAPING MEN TO THE WORK By C. H. Slocum, President of the St. Paul Book and Stationery Company TRAINING employees, shaping men to the work and methods of a business — developing in them initia- tive, responsibility, enthusiasm, cooperation, integrity, and loyalty — ^is preeminently a human problem. At least, so I have found it. Years of experience in hiring and firing have disclosed to me no standardized system of methods by which I might measure in advance the capabilities of a worker. By experiment and test, by watchfulness and develop- ment, we find out men. In employing new people we try to select those who can be built into our business. The kind of men we are looking for today is the kind we will need in our business tomorrow. Practically every department manager with us today started in as an oflSce boy or in some minor position. The secretary and treasurer of our firm began as sales- men on the retail floor. These men have come up through the ranks with the development of our business. They are always on the keen lookout for ways of bettering their departments and the business as a whole. The best little promoter of enthusiasm, integrity, and loyalty among employees that I know of is the Almighty Dollar — given where it is earned. A few months ago a young man came to us and applied for a position. We liked his appearance and gave him a place in our ship- 144 DEVELOPING YOUR MEN ping department. His job was to wrap up packages. We started him in at $45 a month. In less than six weeks the department manager came to me and said that this young man was worth more money ; that he was economical, conscientious, and a swift, careful workman and had made an excellent record. We raised this young man's salary and dated it back two weeks. This gave him such an incentive for better work that he soon worked himself out of the shipping department. We changed him to another position and gave him more responsibility. We will keep on changing him until he has gained a thorough knowledge of our business. In a few months he will have a better position and his salary will keep pace with his advancement. Each department manager has strict orders that as soon as an employee in a department is actually worth more money to the firm that their salary shall be raised immediately. We do not wait for the first of the month. Forty to fifty employees received a raise recently and not one of them asked for more money. We are not running a philanthropic institution, but if we expect fairness from our employees, we first must be fair in our dealings with them. In our organization we have many young men. We prefer th'em. We pick up bright young fellows and train them in our way of doing things. The average young man is going to develop in business according to the training he receives. In taking young men into our organization, we therefore assume somewhat of a moral responsibility. They consign themselves to us as so much raw material. It is not only up to us to help them make good, but to stand behind them and back them up while they are in the process of "making TRAINING WORKERS 145 good." If they eventually grow beyond us, that is our fault, but we try not to let good men go. Our business is well divided by departments and our employees are trained by departments. While every employee is hired to do a certain class of work in a specific department, we frequently change them from one department to another so that they gradually come to have a working knowledge of the business as a whole. "Whenever we are short handed in one department we know that we can draft men from other departments to fill up the gap. While these men may not work as rapidly as those who are employed regularly in the department, they produce efficient results and enable us to get today's work done today and at the same time keep our whole organization up to a high working stand- ard. This applies particularly to our operating depart- ments. HOW employees are so initiated into the business that few mistakes are made and they are less likely to become discouraged at the start. A large portion of our business is handled through OUT mail-order department. We are doing business in every state and in many foreign countries. This busi- ness is handled by direct mail methods. Here we must take precautionary measures against possible mistakes. Regardless of the fact that every order is checked by a number of individuals before it is forwarded, we believe we are avoiding many needless mistakes by first giving each employee a thorough working knowledge of our business before starting them in at the work they have been employed to do. We accomplish this by starting new employees in on a class of work we term "Show Me's." This may be anything in the nature of a com- 146 DEVELOPING YOUR MEN plaint. First, the employee is given the correspondence which states the complaint. We will say that a shortage has occurred in a shipment of books. As each customer's order comes in it is put on a card and filed alphabeti- cally. This card contains all the information regarding the order. The first step is to get this card and the order number. Next, a duplicate copy of the order sheet will be found on file in the departments which filled the order. This information is gathered and taken to the shipping department where it is compared with the duplicate shipping ticket. If these duplicates cor- respond, then we know that the mistake has occurred at the other end of the line or in transit. This information is attached to the correspondence and returned to my desk. The point is that the young man who made this investigation has come in actual contact with a number of departments and managers. Everyone vnth whom he has come in contact has helped him gather all avail- able information regarding this complaint. In a short time this work will have shown him the working prin- ciples of every department in our business. When some- thing comes up while this man is working at his own job — something which requires a knowledge of the work in other departments — ^this man will know or will be able to act quickly. This experience helps a new man to quickly lose any feeling of strangeness which he probably had when he started in. Unconsciously, he has been learning our business methods. If we had tried to explain these same methods by word we might have had a sorry job of it. And if the applicant did not grasp at once what we were driving at, he probably would become discouraged before he began. Instead of this happening, he actually TRAINING WORKERS 147 acted ont every method connected with his work. This makes it easier for the employee, gives him confidence and faith, and once having this experience he is less liable to make mistakes. However, mistakes happen. We all make them. Not long ago we received an 'order for thirty calendars from a, school teacher in a country district. This order arrived during the Christmas rush. We were out of the particu- lar calendar ordered. A young man in the department which would ordinarily fill this order knew that by ordering direct from the factory these calendars would reach the customer on time. In making out the order he put down 330 calendars instead of 30. The factory made the shipment. And the school teacher promptly informed us that she had not intended to embark in the calendar business. We wrote this customer to take whatever number she could use and forward the balance to us at our expense. The man who made the mistake simply wilted. Of course it was a bad blunder. How- ever, this mistake was not charged up to the employee. We bought new calendar date pads and sold these goods for use the following season. . When a mistake occurs, regardless of who made it, we do not raise a merry row. Instead, we go to the em- ployee at fault and say something like this, "Now this mistake has been made. We know that it did not happen intentionally. It is all right and will not be charged against you. Next time do it so and so." And the incident is closed. When employees make mistakes the natural inclination is for them to get flustered. Some- times they lose courage and confidence in themselves. We try to prevent this. If an employee is afraid to go ahead, loses initiative, keeps running to the department head or other workers for this and that and the other 148 DEVELOPING YOUR MEN thing, then they not only waste time with their own work, but waste the time of others and upset the mental equi- poise of their department. The losses we make good on employees' mistakes are more than paid back to us through the saving of time, the development of intiative, and the value of confidence our workers have in them- selves. Of course, if an employee persists* in making mistakes continually he must go. PROM the time he starts the eyes of the management are upon the ivorker — questions affecting him are not considered haphazardly, but from the personal angle. A closer study of the lines of our work which interests an ambitious employee helps us in selecting our men. "We try to find the work which the employee likes to do best. We can do this only by watchfulness, experiment, and test. Five years ago a young chap came to us and applied for a position which was open in our library department. He happened to slide into a position which held his interest from the beginning. Today he is in charge of the department, handles all the correspondence connected with it, and is responsible for its management. More often than not, the reverse situation occurs. Then we must find a job for the man. Sometimes this is not possible. If people are entirely unsuited for the work they are doing we advise them to make a change and try another line. Occasionally employees slow up in their work. Perhaps we all do. Most of us get back to normal in a day or so and simply say that yesterday was an off day. Once in awhile we find an employee who slows up and doesn't "come back." Such a case happened not long ago. This young man did his work but lacked "pep" and enthusiasm. He was not looking ahead for the other fellow's job. I discovered tha* TRAINING WORKERS 149 when a rush of work came through his department he tept up his own, yet he never got ahead of it or offered to help the other boys. I decided that "watchful wait- ing" would bring results in this case. Several employees in this department who were doing well received an increase in their salary. The young man in question did not. Shortly after he came into my office. He told me that it had been some time since he had had a raise and reminded me of the fact that another employee in the same department had received two in six months. I did not find fault. I simply explained that while he was earning what we were paying him he was not progressing and certainly was not worth any more money at the present time. He saw the point. Not long after this the manager of this department told me that this young chap was worth more money. He got his raise on the dot. Now he is doing fine. Off and on, we cheek the general efficiency of our employees. This is done by departments. In our book stock rooms v/e have our book pickers make a daily report giving the number of each order filled and the number of books on each order. If a man is only picking five hundred books on thirty orders, and we know that he should be able to pick a thousand books in the same amount of time, we bring this fact before his attention. The check itself keeps the men up to maxi- mum. They know what is expected and that they must deliver full measure. Other department employees are checked by general reports on their daily work. Stenog- raphers and biilers are checked periodically as to speed and accuracy. Every morning a report is made from our time-clock and -placed on my desk. This enables me to see what employees registered late and those who have not re- 150 DEVELOPING YOUR MEN ported. "We do not dock a late employee or one who is on the sick list. An employee registering late puts a red circle around his late mark. If this happens regularly the department head calls the employees' attention to the fact and an explanation is in order. Whenever anything goes wrong with an employee's work or discipline, we do not call his attention to the error in the hearing of other employees. Whenever an employer places an employee in an embarrassing position before others, he needlessly creates a sore spot in the employee's mind which is bound to react on the efS- ciency of the work and in many eases on the attitude of other employees. We use inserts in our pay envelopes to call attention to trivial errors on the part of employees and the more serious things are taken up in person by the department manager or myself in the oflSce. What we aim to do is to make our employees glad to work for and with our company; We want them to feel that we not only do appreciate their earnest efforts, but that we are always ready to pay for good work well done. We try to make them realize that there is a place at the top for the man who makes good. ^ WE TRY never to hire a man who cannot smile. We know that a habitual "grouch", if he happens to be in our employ, is a sure source of complaints. The man, however, who is naiuraUy friendly, who has a smile just under the surface, vyill make and keep friends for us. E. M Statubr, President of Hotels Statler Company, Inc. PART IV-PUTTING MORE THAN MONEY IN PAY ENVELOPES Making Partners of Workers 'T'HE biggest problem of the employer is to pro- *■ vide a stable, happy operating force which will work with him as well as for him. It is the prob- lem of every business — whether the business em- ploys five men or nearly a quarter of a million men, as in the case of the United States Steel Corporation. As the number of men increases, the complexi- ties increase and the impersonal character of the corporation enters. Reduced to their elements, however, big business and little business have much the same points to be solved. They each have the individual workman eventually to deal with; no matter how pretentious the plan, it will fail unless the individual is the controlling con- sideration — unless the plan makes "boosters" out of "kickers." The great thing is not only to make the man working for wages actually a partner interested with the employer, but to let him show that he has such a relation and that his welfare and the welfare of the employer are identical. When this basis is established most dififerences will solve themselves. ^' 'a. ^auiAAJZ-Z^.. JAMES A. FARRELL President of the United States Steel Corporation XV PROFIT SHARING- ITS SUCCESSES AND FAILURES By Boyd Fisher, Vice-president of the Executives' Club of Detroit CONSIDERED merely as a stimulus to increased pro- duction and greater net gains, profit sharing is of particular value in plants where : (a) Individual efficiency can not yet be exactly measured, or where — (b) Much work is done away from supervision, or where — (c) Longevity of service is necessary to preserve qual- ity of product or to guard trade secrets, or where — (d) A supplement to wage-payment systems promot- ing individual efficiency is needed to minimize plant waste. In other cases, where the motives are merely practical, better results are obtained by improvements in working conditions, by increases in wages equal to the desired share in the profits, and by the payment of these in- creased wages upon the basis of individual efficiency. There are, in other words, limitations upon profit shar- ing as an economic incentive. In all the four cases listed it succeeds in increasing individual efficiency only by influencing the entire working force. Its effect is like opening a window in a superheated school room — ^it increases the alertness of individuals by freshening the air for the whole class. For bettering 154 HELPING LOYALTY HELP YOU results in regard to the factors that apply equally to the whole working force, like the minimizing of waste and idleness, the reduction of needed supervision and the breeding of good will between workers, it is admirable when sincerely undertaken. But, just as no school teacher would expect to get the best work from a class of children by merely providing proper heat and ventila- tion, so, no manager should expect to obtain the best output from each man by merely creating a good work- ing spirit. Profit sharing is probably impotent, in its direct effects, to stimulate output. While the workman may hope that everybody will work hard enough to increase his share of the profits, he hardly grasps the point of his working harder to increase everybody's share. It is beyond his field of vision. PROFIT sharing for employees under most conditions is profit making for the business only when a strong •personal incentive impels the rrten to increased effort. Only an individual incentive will produce the ut- most individual results. Only a piecework, premium or bonus system of pay, based upon a definite and scien- tifically-established task, will stimulate the fullest output of which the operative is normally capable. The task idea is to be strongly favored as an addition to profit sharing. If a choice must be made between them — ^though there is no practical difficulty in combin- ing them — ^the task idea is preferable. In spite of the limitations restricting profit sharing, however, and apart from the altruistic justifications of the idea, there are certain situations in business in which profit sharing for the men is, at the same time, profit making for the business. The first of these is the con- HAS PROFIT SHARING MADE GOOD? 155 Jition where individual efficiency can not yet be exactly measured. Advanced protagonists of scientific management do not admit that any field of work exists which can not in the course of time be standardized. They admit, however, that some kinds of manual labor do not yet admit of exact measurement. There are assuredly many which managers have not attempted to measure. These classes of work suffer from the disadvantages which business men are most ready to point out when labor advocates demand uniform wage scales. They do not, that is to say, stimulate initiative and hope ; they do not permit rewards for individual care and skill. It is in industries in which such conditions prevail that profit sharing is especially to be commended. Where workmen can not be individually rewarded for extra effort, they can be encouraged to greater cooperation by a share in the gains of their joint labor. Sometimes it is only one or two departments in a plant which suffer from these handicaps. The Metal Products Company in Detroit meets a situation where from twenty-five to fifty men work in a gang assembling axles, and the like, by paying the entire gang a piece rate. A business which apparently has to work its entire force as one big gang is The Procter and Gamble- Com- pany, which manufactures soap and other products at Ivorydale, Ohio. When I visited this plant I was im- pressed with the huge vats of Ivory Soap, three stories high, containing 275,000 pounds of material, which are kept constantly boiling for seven days. Obviously it would be impossible to measure the con- tributions of all the shifts and workmen in the making of one of these vats of soap. The company can only 156 HELPING LOYALTY HELP YOU promote a general spirit of loyalty and interest in the business by first picking intelligent, conscientious men, and then rewarding them with a share in the profits of the company. The Procter and Gamble Company has done this by means of a stock-sharing scheme which has become the model for the country. Another class of business which does not easily admit of standards for measuring efSeiency, and which, there- fore, is a proper field for profit sharing, is the manu- facture of illuminating gas. The great metropolitan gas companies of England were the first to recognize this, and they have for twenty years maintained a profit- sharing plan that links up features involving saving funds and stock sharing. The Boston Consolidated Gas Company, in this country, has a profit-sharing scheme. In fact, we may say that all businesses which handle large quantities of raw material are likely to involve processes in which individual efficiency can not be meas- ured. The Solvay Process Company of Syracuse and Detroit, the Edison Electric Illuminating Company of Brooklyn and the General Ice Delivery Company of Detroit all fall under this heading and all use profit- sharing plans. Another business which many people may contend can not be fairly standardized is the printing business. This contention is held open to dispute. But it is well to classify the profit-sharing plan used by the Houghton Mifflin Company at Boston as one which owes its. validity to the fact that a more definite incentive could not be discovered. There is another type of business in which there exists a similar reason for sharing profits : where a large por- tion of the work is done away from supervision, very much the same difficulty in appraising the faithfulness HAS PROFIT SHARING MADE GOOD? 157 of the average worker appears. In all such businesses the expedient of making the workman a partner with the management not alone gives him an interest in the results of good work, but also puts him on honor toward his fellow workmen to do his best, whether adequately supervised or not. SOME o^ the history of early, but successful, profit- sharing ■plans. Most 'plans of this nature are di- rectly pointed toward stabilizing the worlcing force. The first profit-sharing scheme to attain great success because of this principle was that inaugurated by Leclaire in 1842. The Maison Leclaire was a house-painting com- pany in Paris. Quite obviously, when two or three painters are dispatched, with or without a foreman, they can not be supervised as closely with regard to how fast or how thoroughly and carefully they do their work as can operatives in a manufacturing plant. They are too far removed from supervision. The latter are always to be found in an assigned station and are inspected from time to time in a routine way. But if paint be improperly mixed or badly applied, the negligence does not show immediately. And if the company is never asked to paint the same house again, the management has no way of knowing whether the loss of business was due to carelessness on the part of the workmen or not. It is reasonably certain that Leclaire 's motive in estab- lishing a profit-sharing scheme was purely altruistic, because, merely to secure good work, he did not need to go so far as he did in making the workmen in his company owners of the stock in it. But it is also true that the success of his plan came mainly from the fact that profit sharing proved to be such an effective cor- 158 HELPING LOYALTY HELP YOU rective of careless workmanahip that it greatly increased the earnings of his business. Another French example of profit sharing is the Bon Marche, a department store in Paris with an annual turnover of forty-five million dollars. Today all of the company's nine million dollars' worth of stock is held by either present or retired workers. This profit-sharing scheme, which was inaugurated in 1880, does not owe its inception to the difficulty of supervising the retail sales force. Mme. Aristide Bouei- caut, the widow of the founder of the busiaess, made the principal assistants partners with her in order that she, although inexperienced herself in merchandising, might secure loyal service with less direction. The plan was extended, however, to all her workers and succeeded mainly because, although supervision is possible in a department store, it is not generally effective unless the members of the sales force are keenly interested in the welfare of each customer. Every manufacturer realizes the importance of a stable working force. Most profit-sharing plans, in fact, look more to stabilizing the force than to increasing profits through the incentive of larger volumes of pro- duction. The mere cost of hiring and breaking in new men, running according to various estimates all the way from twenty-five dollars to two hundred dollars per man, is a potent incentive to the adoption of methods for binding men more closely to their joba. THE business world needs today more who are mUing to listen to the opinions of others and weigh them. Clarence M. WooUaET, President of the Amrricaa Radiator Company XVI PROFIT SHARING: WHEN? WHY? HOW? By James A. Farrell, President of the United States Steel Corporation THE Steel Corporation has given a vast amount of thought and many millions of dollars to the promot- ing of a mutual interest with its workers. Our systems are working out very satisfactorily, and I think they are resulting thus happily because they are founded upon the individual instead of being forced upon him. The entire system is planned with the thought of securing the active cooperation of the individual work- man for his own and for the company's benefit. And I think that we have removed every trace of the unfor- tunate antagonism that sometimes obtains between cap- ital and labor. The men feel that the corporation is vitally interested in them and does not consider them as tools to be worn out and thrown aside. The whole work of making the employee an integral part of the corporation divides itself into four broad heads : 1. Stock-purchasing plan 2. Pension and relief 3. Safety first — the guarding . of the men from injury 4. Welfare — ^the bettering of conditions of work and housing 160 HELPING LO/ALTY HELP YOU Each of these activities has done its part toward caus- ing the employees to cooperate with one another and with the corporation. One activity can hardly be pre- ferred to another as the more valuable in contributing to the sentiment of mutual interest. One man may best like the opportunity to make money on his stock; an- other man may work well because he sees a pension ahead; while still another may most deeply appreciate i;he safeguards and healthful conditions about his work. HOW it has been made possible for employees to be- come stoclckolders. $12,000,000 is available for pensions and relief work among workers. The first of the plans to give the employee a share in the corporation's earnings was adopted in 1903, when the stock subscription plan was inaugurated. It is profit sharing in the best sense because the employee is urged to pool his fortunes with the company by buying «toek out of his savings. The employee thus gains an interest identical with the larger stockholders and no additional self-interest is interposed between the corpo- ration and its owners — ^the stockholders. When the plan was put into effect it was not generally understood by the employees, many of whom had very vague ideas as to what stock was. But the ofiScers of the corporation explained the nature of the investment to the men everywhere and now some fifty thousand em- ployees hold approximately one hundred and fifty thou- sand shares of stock. The plan is very simple. The company acts as the purchasing agent of stock for the men. The number of shares to which any employee may subscribe is graded according to his salary, the relative proportion being PARTNERS AND PROFITS 161 greater for the earners of low wages than for the earners- of higher wages. He takes the stock at somewhat less than the current market price, and pays for it in monthly- instalments. The minimum payments vary according to the market price of the stock and run from two doUars^ to three dollars per month for the preferred to between one dollar and twenty-five cents and one dollar and fifty cents for the common. A workman is not permitted to pay in more than twenty-five per cent of his monthly earnings. The company adds to the stock thus pur- chased a premium or bonus during the first five years; this is five dollars a year for each share of stock. If a subscription is not paid, the employee may cancel it. What he has paid will be returned to him with five per cent interest. Premiums are not paid to those who cancel their subscriptions, sell their stock or leave the employment of the company. These forfeited or unpaid premiums are thrown into a fund to be divided pro rata among the remaining subscribers at the end of the five- year period. If the subscriber dies before he has com- pleted his payments, the premiums are paid to his estate for the full five-year period. The men are real stockholders and not mere recipients of the company's largess. They earn their stock with their own money and they are vitally interested in the progress of the corporation. Before annual meetings the stockholders in many of the plants elect representa- tives to go to the meeting. They do this entirely of their own volition and not through any prompting on the part of the officers. These men, their expenses being paid by their constituents, attend the meeting, and many of them speak from the workingmen's point of view. They enter actively into the deliberations and make valuable suggestions. Nothing could be finer than the effect of 162 HELPING LOYALTY HELP YOU this mingling of the workers in the field with the more or less absentee stockholders. The exchange of ideas is infinitely helpful. We like to have the men know that if they stand by us during their active years, we will take care of their old age. Hence the pension fund, which amounts to twelve million dollars, one-third having been contrib- uted by Mr. Andrew Carnegie and the balance by the Steel Corporation. Pensions are paid, after twenty years of service, to men above the age of sixty-five, and to women after the age of fifty-five, on the basis of one per cent of the average monthly earnings for the last ten years before retirement, multiplied by the number of years of service. The minimum pension is twelve ■dollars per month and the maximum is one hundred dol- lars per month. The average is twenty dollars and thirty cents. The number of pensioners is now a little over three thousand. SAFEGUARDING the employee at vmk. How the safety-first committee operates. How the men help the committee and why it pays. The accident relief plan was started in 1910; it is now superseded by the compensation laws of the states in many places. The essential feature was the entire disregarding of legal liability or formality in applica- tion. During one year the various companies paid an aggregate of $2,564,839, which was eighty-five per cent of all tl^e expenditures in casualty matters. Suits were brought in less than a quarter of one per cent of all accidents. The safety-first campaign has not only saved nearly thirteen thousand persons from serious injury within the past six years, but it has given a new angle and a PARTNERS AND PROFITS 16S new interest to every man's job. The subsidiary com- panies had been working out means of protecting men at work for many years, but the organization for the whole corporation dates from 1906, when the central bureau was established as a clearing house for ideas. The result was the appointment of a committee of safety and the establishment of a bureau of safety — to which was added three years ago control of relief, sani- tation, and welfare. I think the success of the measures has been very largely due to the method of organization, which divides and subdivides until the workman him- self actually participates. At the head is the bureau, which is the executive de- partment of the committee of safety. This committee has one of the officers of the Steel Corporation as chairman ; the seven other members represent the larger subsidiary companies. The bureau and the committee aim to circulate the best ideas of the whole membership of the organization in order that each plant may have the benefit of the ingenuity of all the other plants. Then come the central safety committees, which do for the plants of each subsidiary company what the main committee does for the whole body of companies. Each plant has its own plant safety committee, com- posed of important officers, below which is the depart- ment committee of foremen, master mechanics, and skilled workmen, and finally the workmen's safety com- mittee, which is drawn from the rank and file. These committees all meet regularly, some of them every week, and they make frequent inspections of their own and of other plants, with the sole idea of suggesting ways and means for the safeguarding of the work. Every accident is reported on a form which contains a space headed: "Suggestion for prevention of a similar 164 HELPING LOYALTY HELP YOU accident." These forms are tabulated and each ^lant has its score board to stimulate competition, not only between departments of the same plant, but also between the various companies. "When no suggestion for the pre- vention of "a similiar accident" is made, the details of the accident are sent out to all of the committees and they are asked to suggest ways and means. The same procedure is followed with new devices for safety or welfare. The workman himself has the chance to suggest what he thinks will best prevent a recurrence — it is put up to him. The membership of the work- men's committees is changed frequently, in order that every man may eventually pass through the stage of accident-prevention supervision; thereafter that man will be a part and parcel of the safety and the welfare system. More than eight thousand workmen have already served on these committees. Without the active interest of the men most con- cerned, any safety or welfare measures will cause resent- ment and will therefore fail. "We met this condition at .the beginning of the work. Most of the superintendents and foremen had come up through the mills, and they thoroughly believed in the doctrine that every man •ought to be amply able to look out for himself. They did not like the idea of someone interfering with their jobs, but we found they would work with zeal if the details of the new idea were put squarely up to them for solution. Take a typical case in a carpenter shop. An order went out to install saw guards and with it a design for a guard. The superintendent received the new device ■with a contemptuous sniff. "That thing isn't a guard. It will kill someone," PARTNERS AND PROFITS 165 he said. The safety-first man took him tactfully and replied : "Well, Bill, you must have some kind of a guard. Make up a better one and I will send it out to the other plants." And the new guard was made and it was the best guard for that shop because it was a home product. We have possibly twenty-five designs of guards now in use and they are all good. One man wants a mesh guard so that he can see the gears; another declares that the guard must be solid in order to keep out the dust and preserve the life of the gears. The initial opposition once overcome, the difficulty has not been in regard to securing new safety or welfare devices, but in preventing useless or too costly installa- tions. The men who kicked most at the beginning are the men who must now be watched so that their enthusi- asm does not override their judgment. Every man, whether he receives wages or a salary, is eagerly enlisted and is anxious to come out with some winning idea. I have seen common laborers conferring with five-figure managers over the best way of avoiding some simple accident. The bureau gives currency to every good idea. Thou- sands of ideas are being interchanged. Among those now under consideration are safety devices for ladders. We formerly had spikes and safety feet on all portable ladders, but accidents continued to happen. One of the plants made an exhaustive series of experiments with ladders bearing different weights and with various types of feet to determine the angles at which a ladder bearing the average man would slip. They found that the ordinary ladder was not safe on a smooth or oily surface if inclined at an angle greater than sixty de- 166 HELPING LOYALTY HELP YOU grees. They found that neither the spikes nor the safety feet helped matters and they recommended a plain lad- der with a man holding it when the angle increased to sixty degrees or beyond. Now we are going to adopt a simple little device which will show the danger angle for ladders. All of this costs money. The total cost of the meas- ures for workmen for two successive years was $7,240,- 669.33, and $6,017,848.28. We are spending from a half million to a million dollars each year on accident preven- tion alone.' Eeduced to a per capita basis it amounted to $2.84 one year and $3.01, and $3.32 each for the fol- lowing years. Does it pay ? We think it does. An industrial enter- prise must be so conducted that it shall earn enough to insure proper working conditions for its employees, to pay fair wages and to return a reasonable profit to those who have invested their money in it. Our plans are large because our work is large. But the principle which guides us is equally applicable to the smallest manufacturer. The cost of pension, safety, and welfare work must be adjusted to the means of the owners. But, taking the initiative of the workmen as the foundation, the adaptation of the principle and its ramifications becomes only a matter of mathematics. THERE are three important actors in production — the equipment, the systems employed, and the human dement. It is more and more being appreciated that the human element is, in the last analysis, the one mast im- portant in securing the results desired. Lttther D. Bublingame, Industrial Superintendent. Brown and Sharpe Manufacturing Company XVII GIVING THE MEN A CHANCE- WHAT IT'S DOING FOR FORD By Harry Franklin Porter, Organization Engineer MY PIEST introduction to the Ford plant and to Henry Ford was in the late spring of 1913. Although some of the most noteworthy developments in the short but eventful history of the Ford enterprise have taken place since that time, Henry Ford already was enjoying nation-wide distinction as a manufacturer. The annual convention of the National Association of Manufacturers was being held in Detroit and Mr. Ford was one of the guests at the banquet. When it became known that he was in the room, almost the sole topic of conversation at the outlying tables was Henry Ford and his methods. A local manufacturer sat at my table and, as I per- sonally was eager to learn more about Mr. Ford, I encouraged him to talk. He corroborated many of my previous impressions and filled in many interesting details. He was not, however, wholly laudatory in his remarks. As to the merit of Ford's mechanical methods he had nothing but praise. But as an employer of labor he criticized him. "He pays low wages and hires the cheapest class of help, mostly foreigners," was my table- mate's remark; "and," he added, "there is considerable feeling against him among Detroit manufacturers." 168 HELPING LOYALTY HELP YOU Just how much justice there was in this criticism I was unable to learn. I must confess that I was skeptical. I knew that one of the reasons for Ford's success was the extent to which he had carried the subdivision of labor, eliminating the necessity for any great skill on the part of many of his operatives. But I had also visited the plant and came away impressed with the excellence of the working conditions, the emphasis on good light, ventilation and sanitation, the provisions for safety, and the cheerful, busy atmosphere of the place. Therefore I was unwilling to believe that his methods as to men could be classed as retrogressive. One of the officials of the Ford Motor Company, how- ever, in a speech before the Indianapolis Chamber of Commerce, early in 1915, in leading up to an explanation of the Ford profit-sharing plan, made the following admission: "We, like other employers, had gone on for years, hiring men at the back door for as little as we could get them, putting them in the shop and making them work at the same job as long as they would stick, and not giving them an advance until we had to." Then the tremendous wastes in this method of hiring and handling, men began to dawn upon the Ford officials. They had not been exactly retrogressive in their labor policy, but they had unconsciously been following the line of least resistance. The result was that the number of five-day men, or "floaters," was very large. Some months it was necessary to hire new men to the extent of 55 per cent of the total payroll. "When it is con- sidered that the force comprised some seventeen thousand men, an idea can be had of the immensity of the task. The long employment line in front of the Ford plant had become one of the sights used to whet the curiosity of "rubber-neck" tourists. GIVING THE MEN A BIGGER CHANCE 169 Accordingly, a broad survey of the entire labor situa- tion was undertaken. Other plants employing about the same number of men were visited, during the course of the investigation, but none with a better system was found. Nothing daunted, the Ford heads determined to solve the problem in their own way. In the grading of employees they found great lack of uniformity. This matter had been largely in the hands of the foremen. As a result, operatives in different departments, and even in the same department, were doing virtually iden- tical work, but were getting widely varying rates of pay. FORD finds out jvM how skilfvl u workman each employee is. Wages are based on these findings and the plan has proved mutually satisfactory. The number of different rates, moreover, was entirely too large. Therefore, as the first step, a comprehensive classification of skill was worked out. This was as original as it has been successful. All the work was found to fall approximately into six different groups, or classes, of skill. Each of these divisions, or groups, in turn was subdivided into three groups — the beginners, those of average proficiency, and the highly proficient. An additional grade was further established in some of the divisions, that of service, to reward the proficient men who had been in the employ of the company continuously for two years or over. Bates of pay were fitted in accordance. These finally were boiled down to eight rates, as against some sixty rates that were originally in force. In no ease was a man's previous rate cut. On the contrary, rates on the whole were graded upward, and, when several rates were condensed into one, the new figure was slightly above even the highest of the ones 170 HELPING LOYALTY HELP YOU it superseded. Rates from 52 to 58 cents, for instance, were condensed to 60 cents; from 46 cents to 50 cents, to 54 cents, and so on. The lowest rate per hour became 23 cents, for messengers and other miscellaneous special labor; the highest 65 cents, for expert tool makers and foremen in the service for two years or over. Simultaneously the power of discharge was taken from the foremen and vested in a "court of appeal" working in connection with the employment office. Now, if a man fails to get along with his foreman he comes before this' court, is carefully questioned, plainly talked to if at fault, and sent back to work in another depart- ment. Often it is a ease of a "square peg in a round hole," and the man is shifted around until the work that he can do best is found. Of course, if a man shows, after two or three trials, that he hasn't it in him to make good, he is reluctantly let out. The word "reluctantly" is used advisedly. It is diffi- cult as things now are to get into the Ford organiza- tion, but once in it is perhaps more difficult to get out. The Ford Ccrmpany wants its men to stay. In addition, to taking away the power to discharge from the foreman, systematic reviewing of the record of each workman was also inaugurated. If after the third pay day for a new man, for instance, no "raise slip" comes in, the foreman is sent for and asked why. If the man is entitled to promotion, but the matter simply has slipped the attention of the foreman, the latter is taken to task for his carelessness. He is also reproved if his failure to send in a slip is due to the man's inefficiency. He must not allow his department to be cumbered with a failure. The toning-up effect of these measures can readily be appreciated. Men no longer are at a disadvantage GIVING THE MEN A BIGGER CHANCE 171 because they happen to have ineurrfid the dislike of their foremen. They are stimulated by the fact that the com- pany is taking a personal interest in their welfare, and the new classification of skill remedies many injustices in the wage scale. The foremen, moreover, are aroused to a new sense of their responsibilities. What the tangible results of the various measures inaugurated to insure more substantial justice to the individual workmen were at the start are shown by the following figures : December, 1912 October, 1913 Five-day men 3,594 322 Men discharged 776 137 Men quitting 386 326 Men laid off. 4,622 844 Total hired 5,678 1,789 Gain for the month 856 954 The decrease in the number of five-day men, or "floaters," is particularly significant, since it indicates that permanency of the force was being achieved. The decrease in the number discharged also is noteworthy, and points to the success of the method of shifting men about until they make good, rather than letting them out on their first fall-down. The direct saving to the company through the greatly lessened employment expense was lai^e, but the indirect saving through the greater efficiency of a reasonably permanent and con- tented working force, although more difficult to measure, was undoubtedly much larger. A decided decrease in the number tardy or absent was another result which had its financial compensations. The striking fact is that Ford did not stop with these highly satisfaetory residts. The company was in a 172 HELPING LOYALTY HELP YOU highly prosperous condition, sales exceeding all expecta- tion. The men were receiving ten per cent more for nine hours' work than men in similar lines elsewhere in the vicinity were receiving for ten hours' work. In addition, they were getting an allowance of ten cents a day for carfare. Thus apparently there was no exciting cause to do anything further for them, beyond a thor- oughly aroused desire of the Ford Motor Company to share its prosperity with its employees. Many plans were considered. The idea of raising wages still further was dismissed. Various profit-shar- ing systems were investigated and they seemed unsatis- factory. So, as before, the Ford management went to work and devised an original plan. At one stroke the company reduced the hours from nine to eight, and added to every man's pay a share of the profits. The smallest amount to be received by any man 22 or more years old was five dollars a day. The minimum wage previously was $2.34 for a day of nine hours. All but ten per cent of the employees at once shared in the profits. Only ten per cent of the men were under 22, and every one of them had a chance of showing himself entitled to five dollars per day. The factory had been working two shifts of nine hours each. This was changed to three shifts of eight hours each. In order that the young man from 18 to 22 years of age might be entitled to a share in the profits, he was required to show himself sober, saving, steady, indus- trious, and to satisfy the superintendent and staff that his money would not be spent in extravagant living. Toung men supporting families, widowed mothers, younger brothers and sisters — ^upon this condition — were to be treated like those over 22. GIVING THE MEN A BIGGER CHANCE 17S This has been called a profit-sharing plan. But it is quite unlike other plans of profit division, nor does it conform to any orthodox definition of profit sharing. The fact that the workman's share is predetermined, does not wait on the earnings of the company at .the end of the year, eind involves no investment by the men in the stock of the company, marks it as unusual. But what makes the plan absolutely unorthodox is the addi- tional fact that those who earn the smallest wages get the largest share of the profits. The plan has come in for much criticism on this score. When asked to give his reason Henry Ford, in his quaint, Lincolnesque manner, replied: "Well, it costs a sweeper just as much to raise his family properly as it does a mechanic or anybody else, doesn't it?" THE system, used to regidate the high minimum vmge •paid. Plans for paying women workers. How Ford exercises an almost paternal watch over employees. It should be understood that the $5 a day is not a minimum wage. The rates of pay remain as before. But to each man's earnings is added a sufficient amount to bring his total reward to $5. A man who formerly received 23 cents an hour, or $2.07 for nine hours, now receives the same amount for eight hours : namely, $2.07 plus $2.93 as his share of the profits. The two sums are separately indicated on the pay envelope. The 44-cent- an-hour man receives $3.96 plus $1.04 for each day of eight hours. Nor is $5 the maximum. Those who before were earn- ing from 38 to 48 cents an hour, or the first-class skilled operatives and mechanics in the beginning grade, may share in the profits to the extent of bringing their total daily earnings up to $6 ; while those rated higher still, 174 HELPING LOYALTY HELP YOU up to where the salary class begins, may receive as much as $7 a day. The 54-cent-an-hour m^n's share of the profits at that is only $2.14, as against $2.93 for the man rated lowest. Salaried men do not share, but are taken care of separately through a bonus plan which is equivalent. At first the only ones barred from participation in the profits were the young men under 22, who had only themselves to support. Later it was found expedient to include in the non-participants all new men until they have been on the payroll for six months. The chief reason for this change was to discourage men in other plants from quitting their jobs in order to get the higher earnings possible in the Ford plant. But it also has its virtue as a means of testing the intentions of newcomers. If they stick it out six months at ordinary wages they usually have the necessary, qualities to make them per- manent members of the force. Again, it gives the com- pany ample time to check up on their living habits and financial status, and — ^if these are undesirable — ^to im- prove them in the meantime until they come up to the Pord standards, so that there will be no doubt of the man's ability to qualify for participation in the profits at the end of the six months. Further, in order to protect other plants, and to dis- courage the in-drift of men from other cities, the Ford Motor Company now will entertain as applicants only those actually out of employment and who have been bona fide residents of Detroit, or the vicinity, for at least six months. At first the plan of profit division applied only to the shops. It has since been extended to include the office force as well. The Ford branches and assembly plants are on the same basis; and in both the Ford Canadian [;CC>KD OF l^.vi;sTlGA^ \OU ^.„- ■.-,.r-.^ni a^. 2-5-14 •'"■■'»-''■" *-2-l-15 ... 4-4-1} ........ ^fJ ' r. Mow. Av«, : » n,l, :, Caihsnc ..- 2H ,.r. ; t. J !y 16, ^(Jfc (Tnittd Slates Pontal Savings Vtevii.; County S Hong Savings lU^fili . 0/ f anii ; 12698 t-'^O. asm OfIi=» . SS52I :■.-.. i'tO. t- -. ^. Mien, 4 'J.-if. 1_U1^ IOC. Hli:.nl»iL^i Pirt - LiTiJ i-i^Uatjli, Dj»ntOifli Jistrict. I Ei-oatAon. i-^j. Hie tank i-arfriH^, alr..:^ «ay 1.1th, 1^14 hav* CK'in Insroasad }7^j-00 iv) ,'.|^ril 7, 1J15" ^^ivi; to OIJ CoJdtfy $^O,0O (v; throjt;!, -nB ;i-i.,Ti.:an Soa.-d of C;.!i.jDissior-.gfs far (urv-iiin iJistlanfi, This om '-at ^rantad iho.ru ji p.--;fil OR 5-J'^-14 ^nd ui> iQ the prdsant ti".t ha >ias sa'yeJ }74t;.'^0 \:. -j, ■.' •.■y^cr.t thuri loe 15 very s&'K'if, J'.J -a^"!^>.■ tv -v .;ii t -i ?■>«■* mi the Jiroiit i-iit'rir-;^, ]--;.'■-■. I A-PPPOVT A report sheet like this is made out for each employee in the Ford plant. In order to share in the profits, employees must receive a "clean bill of health" from the investigators on the various points shown above Here is a typical row of Ford workmen's houses before any thought had been given to making the home life of employees more pleasant. Note the contrast between this picture and the one below Paved streets, cheerful homes, and pleasant surroundings generally follow in the wake of the investigators who study living conditions and suggest improvements to Ford emplouees GIVING THE MEN A BIGGER CHANCE 177 and English plants similar plans have been put into effect, although the minin^um is lower there, owing to the difference in the American and British wage scales. Women in the factory who are breadwinners — and there are several hundred — are treated precisely as men. Women as a class, however, are not profit sharers. Instead, the company gave them a substantial increase in wages. The minimum now for a girl in the oflBee is $65 a month. In explaining this difference in the treat- ment of men and women, an official of the company said: "Women do not share because they are not, as a rule, heads of families. Also women, as a rule, are likely to throw up their positions at any time, without notice, for any reason that may happen to influence them, even temporarily. Few of them remain long with the com- pany. Those who do remain several years, and come to be looked upon as reliable, steady employees, not infrequently make sudden announcements of their mar- riages and leave. For this reason they are not con- sidered such stable economic factors as men. An advance in pay is considered more appropriate for them." For the employee who is 22 years of age, and who has been on the payroll six months or longer, the sole dis- barment condition is persistence in habits of life which fall short of the standard the Ford Motor Company believes essential in a decent, self-respecting American workman. While what a man is on the outside is reflected to a greater or less extent in his demeanor and the quality of his workmanship, the only practical way in which the company could check up in this respect was by personal visits to the homes. In a large measure the results attained by this organization is traceable to these visits. 178 HELPING LOYALTY HELP YOU So without pausing to debate the fine-spun, theoretical aspects of the act, as to whether an extension of super- vision over the private life of their workers was unwar- rantably paternalistic or not, the Ford Motor Company instituted a follow-up or "investigation" department and set about the huge task of visiting the homes of every one of its seventeen thousand and more employees. The efforts of the Ford organization in this respect have borne remarkable fruit. It is, in my opinion, most practicable and effective social welfare work. It is espionage in a way, but of a totally different sort than ordinarily implied by this term. Ford exercises the closest supervision over the home life and financial affairs of his workmen. He does it, however, openly and frankly and for the purpose, not of taking something away from them or persecuting them, but in order to help them in the most practical way one man can help another: namely, by bettering his financial condition and then teaching him how to use prosperity to advantage. MORE about the methods used to keep a dose check on the home lives of Ford vxrrkers. How they are kept out of debt. Much of the success of the plan has depended on the type of men Ford chose for his investigators. Men's private affairs had to be pried into, facts secured which in many eases required a high order of detective ability, and they had to be obtained quickly. Persistence, a deal of shrewdness, and an infinite amount of tact thus were requisite qualities in order to get results with a minimum of antagonism. Men, the slaves of all manner of bad habits, the victims of new-world vices and old- world standards of living, had to be made to see the GIVING THE MEN A BIGGER CHANCE 179 worth-while side of manly attributes and decent, clean home conditions. Definite, measurable results are plentiful. Of the many families reunited; the drug and liquor addicts reformed; the criminally inclined who have been re- claimed; the debt-burdened families relieved; of the himdreds of children clothed and fed decently for per- haps the first time; the thousands of homes cleaned up and made livable; of the eleven or twelve thousand families that have been moved from the slums and unde- sirable, congested locations to outlying suburbs and country districts, most of them into nice little cottages of their own; of the tremendous increase in savings deposits, insurance carried, and payments on land and home contracts — of these and other concrete results of the Ford efforts in behalf of their workers, it would be possible to write in great detail. Perhaps the most strik- ing evidence, however, is the way in which the investi- gators are received in the homes. Henry Ford has been extremely interested in the foreign-born workmen, of whom there are some 52 nationalities comprising in number more than half his force. He feels he must shoulder his part of the burden of making them feel at home here, and of preparing them for speedy assimilation into our national life. The very fact,- however, that so many of the Ford employees were foreign born and non-English speaking, greatly complicated — at the start — the administration of the profit-sharing plan, and particularly the labor of the investigators. It was difficult in the first place to get them to understand the conditions. Many were the curious and incorrect impressions which it took a long time to eradicate. One idea, for instance, was that all a man had to do to qualify for a share in the profits 180 HELPING LOYALTY HELP YOU was to get married. Immediately, men who were wife- less took steps to remedy the deficiency, fairly or other- wise. Some hastily married, others persuaded or hired women friends or relatives to act as their wives, still others faked marriage certificates, asserting their wives were on the other side of the water. All these tangles had to be patiently straightened out, the men made to see the error of misrepresenting the facts and the unwis- dom of precipitous matrimony. Another impression was to the effect that if a man owned real estate he would get the profits, and for a time some real estate men reaped a harvest. By a singular coincidence, one man bought real estate on such an assurance and the very next day he went on the profit payroll. The news, of course, spread rapidly. As a result that particular real estate man signed up many advantageous contracts the next few days. Then the Pord officials got wind of the affair and through the legal department forced the real estate man to release every Ford employee unfairly inveigled into contracts. This and similar experiences led the company to undertake supervision of the men's legal affairs. A representative of the legal department now makes his headquarters in the employment department and the men are strongly urged, before entering into any real estate deals, to confer with him. Other special purchases are supervised similarly. Many of the men were found to be debt ridden with instalment purchases. So the company frankly took up the matter with the various suppliers of household luxuries and got them to agree not to sign up a con- tract with a Ford employee until they had first con- ferred with the company and ascertained his ability to make good on his payments. The evil of garnishees GIVING THE MEN A BIGGER CHANCE 181 has been almost eliminated by similar cooperation between local merchants and the company. Before instituting legal proceedings the merchants are urged to take up the matter with the Ford officials, who usually are able to make some arrangement for the resumption of payments. To rid themselves as promptly as possible of all indebtedness, and to guard against becoming reincumbered is one of the lessons which the company, through its sociological department, endeavors constantly to hammer home to the workmen. In passing, it should be mentioned that many of the little plans devised by the men to make themselves appear qualified for promotion when they really are not, such as the falsification of marriage certificates, succeeded temporarily. In practically every case, how- ever, the Ford investigators eventually penetrated these deceits. The company did not discharge the men so caught. If they did not voluntarily leave they were given a wholesome talking to about the need for truth telling on all occasions, and the lesson was made con- crete by compelling them to pay back every penny falsely obtained. If a man refused to stay and pay the company took th« matter to court and invariably secured the decision. HOW foreign-bom workers are handled by Ford. Educational features that pay big dividends. A comparison of results achieved by the old and new plans. The large proportion of non-English speaking em- ployees greatly hampered the investigators, for it required them to work through interpreters. Men com- petent to act as interpreters were hard to find. The difficulties with men who could not speak, read nor write English, however, soon led the company to 182 HELPING LOYALTY HELP YOU organize for instruction in English. An experienced educator was called in. Under his energetic leadership, with a teaching staff of volunteers drawn mostly from the ranks of foremen, a class of over a thousand was graduated at the end of 37 weeks. At the present time approximately sixteen hundred men are receiving instruction. Two lessons a week are given. Attendance is compulsory for those who have registered. Within a very short time after the inauguration of the plan there was a voluntary increase of from fifteen to twenty per cent, in spite of the fact that each man worked one hour less. On the fourth of February, 1913, with 16,000 men working ten hours a day, the company made and shipped 16,000 units of its product. The same month, one year later, after the new plan had been in effect a little over a month, with 15,800 men working eight hours a day, it made and shipped 26,000 units. At the present time, with approximately 18,000 workers, it is producing at a rate of over 40,000 units a month. Some of this gain, it is true, has come about through improved methods, but much of it has been due to the increased interest, loyalty, and efficiency of the force. "Working less hours a day, the men are able to sustain a higher rate of output each hour. Reasonably certain of the permanency of their employment and happy in the knowledge that they are gaining on the rising cost of living, they are rid of fear and worry. EVERY business needs to develop the personality of its men, for that means individualism, originality, growth, and progress. George H. Barbour. President of the Michigan Stove Company XVIII HELPING EMPLOYEES TO SAVE By Stanley A. Dennis Based on an Extensive Investigation WHAT is the best way for an employer to go about establishing a cooperative savings and loan asso- ciation among his workers? If he is to profit by the experience of many companies, he wiU recognize first of all that certain principles underlie a successful asso- ciation. These principles have been widely recognized in recent betterment work. They have been well stated by Dr. Edward E. Prajtt, chief of thfe Bureau of Foreign and Domestic Commerce. He says: "These principles are: (1) that a man's best security is his fellow work- men's estimate of him; (2) that to provide facilities merely for borrowing money may encourage improvi- dence and that any real solution of the problem must encourage thrift instead; (3) that an organization among workers will be self -advertising ; (4) that the workers themselves are most capable of meeting prop- erly the needs of their fellows." Successful associations are maintained, among others, in the following companies: The New York Edison Company; The William Filene's Sons Company of Boston ; The Pord Motor Company of Detroit ; The Cel- luloid Company of Newark; The Northern Trust Com- 184 HELPING LOYALTY HELP YOU pany of Chicago; The Chicago Tribune; Sprague Warner and Company of Chicago; Carson, Pirie, Scott and Company of Chicago ; The Curtis Publishing Com- pany of Philadelphia ; The Larkin Company of Buffalo ; The Joseph and Feiss Company of Cleveland; and The Gorham Manufacturing Company of Providence. Many others could be named. These associations are for both saving and lending money. Several well-known companies for one reason or another maintain savings associations only. Certain details of organization are, of course, similar in all of the associations. While the ends obtained are almost identical, the means will be found to vary in as many different ways as there are different conditions to be faced. A CONCRETE flan for organizing a cooperative savings and loan association, with every employed as a member. Why control should rest with the worhers. When you have gone through your list of problems and conditions and analyzed each, either alone or with the assistance of a few picked men, appoint "a com- mittee to assist in founding a cooperative savings and loan association" with every member an employee. If your company maintains a service or welfare depart- ment, or a club for the advancement of the employees' interests, let the club appoint this committee. In con- ference with this committee, look at the whole problem from the point of view of the worker. Get his approach, his "angle," his ideas and suggestions. Combine the results of your preliminary study with the new ideas and proposed methods obtained in con- ference with the workers. Make up a tentative com- mittee report which will include a set of by-laws, if HELPING WORKERS SAVE 185 the association is to be a part of a larger employees' club, or a constitution, if no organization exists. Kun off mimeographed copies of the tentative report. See that a copy goes into the hands of every employee. Ask for criticism and suggestions. Give him a week to think about them. Give him a loosely drawn up "ballot" to fill in and extend. Let him drop this in a conveniently placed box. When suggestions come in, they can, if thought advis- able, be worked into the final report of the organization committee. In this way every employee gets, a voice in organizing the association. It represents his work, his thought, his time. It wins his interest at the start and is likely to win his loyalty more quickly than if he first saw the plan of organization in final form. Best of all, this kind of cooperation puts into motion a self -advertis- ing campaign among the employees themselves. The final step is the adoption of the revised report by the employees, and the election of officers as provided in the by-laws or constitution. When this is done, direct control of the association passes into the hands of the employees themselves. These steps that have just been discussed form, in a general way, the plan usually most successfully followed when establishing an association. Looking more closely now, in the organization scheme, into the actual making of the by-laws or constitution, certain questions demand special attention. Perhaps the most important problem is the question of limitations as to membership, deposits and loans. In many associations, deposits are annually limited to a certain sum. In others, only a certain annual deposit can share in any distribution of profits, but any excess may be carried in the fund. 186 HELPING LOYALTY HELP YOU In regard to deposits, there is a wide range of prac- tice. In the simplest form the employee agrees to "pur- chase," say, ten shares at a par value of twelve dollars each. This would make his annual savings $120 payable in weekly, semimonthly or monthly instalments. Local conditions must govern the size of a share and the number "purchasable." The maximum participa- ting annual deposit should be within reach of the lowest- paid employee, if possible, or at least held down so that high-salaried employees may not take the larger share of the profits. ItunftsBflr ?PJ^3/i/ij^ T^fjr>f/A. WEEK ENDING DEPOSIT PHE RECEIVED BY >ii»fi -SO ^J^^^^jB i^-^JAA- •IS -.z.i; Jf/i3^>/Wjp^^0/ni/>A~ «M -.7^ 3-fi^^J^. •27 -.60 Mf* -j05 -It -.7S ^Aut^f^fitfflM' •31 _n lln.9 •14 •»1 -28 total »_ FORM I; This card serves members of The Celluloid Company's savings association as a pass book. A record is made of both fines arid deposits. Deposits for six months can be quickly deducted. The deposit dates are printed on the card Non participating excess deposits serve the purposes of the man who wants to save a larger sum, and at the same time patronize the association. The New York HELPING WORKERS SAVE 187 Edison Company's association provides for what are called instalment shares, savings shares, juvenile savings shares, accumulative prepaid shares, and income shares. Bach kind has its particular purposes and advantages. Shares differ greatly in size and number per employee. Usually a maximum number that can be subscribed is set, sometimes a minimum, and sometimes no limits are fixed. In the successful association of The Celluloid Com- pany, deposits of twenty-five cents or more weekly — ^no limit — are accepted. A fine is imposed for failure to deposit as agreed. DETAILS 0/ successful "banking" conducted by many firms for employees. How thrift is en- couraged and vjorkers kept out of minor financial troubles. Periods of savings are of six months duration and are known as "series." Profits are distributed only on savings of one doUar or less weekly. The savings branch is successful largely because an employee can deposit his money in convenient boxes on pay day. Automatic collection from, the payroll, at the request of the employee, is also followed in many cases. In the Joseph and Feiss Company the head of the service department induces parents to permit their chil- dren to retain a fair share of their earnings and to deposit them in the "Clotheraft Penny Bank." This bank has proved an invaluable aid in building up the effectiveness of the workers, most of whom are young women. The shares are of sufficient value in some cases to assist the depositors in building and paying for their own dwellings. In regard to withdrawals, the practice is to exact a small fee when funds are withdrawn on any date 188 HELPING LOYALTY HELP YOU tPPllCATIOH FOR lOAN Savings and Loan Association o( tha Efnploym of the CMcaEO t North Western Ry. Co. General Offices tUL 101^ I hflraby iMh« appDcation for i loan bi tin amsunt of $ /oZ 60 fur JtLt^^ days, dm &tii^ /fC a.....ntii, f 376" ^ g Salary $ /^O'^^ Amount paid In S ^C^'6'Zi Prsvhnis loan this montti --'^^^~ My rasldsnca addrass It ^/ 3 6t <&!/»a.*^^>^//.T ^-i^^^ I haraby declare my Intention of romalnlng hi the amirioy of tha Ghlcato % Hortli Waitara Ry Cft Should I saver my eonnactlon wlUi the said company. I wU give Immediate oollca befort so doing to the secretary of the above named usoclatlDa It Is distinctly anderstood that loans will ba made only to tha amount of S15i)0, plus the amount of said apptlcanrs depostt In shares with association, upon approval of Secretary. Loans In excess of tha amounts asfixedby theahovarulacarrba hadonlyhiemsfEoncycases,satlsfae torily explained to the Executlve.Committee,and only on security approvadbytha said comrolttea: Name of Bmfntwf "Z^A^p^^^ y^