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Cases

The Library of
HE UNIVERSITY
OF
OMNIBUS ARTIBUS
*
MINNESOTA
Class 658
Book 1746
PAMPHLET NO, 1
CASES AND PROBLEMS IN
PERSONNEL ADMINISTRATION
(PRELIMINARY EDITION)
BY
PAUL H. DOUGLAS
AND
ARTHUR W. KORNHAUSER
MINNES
COPYRIGHT 1922
BY THE UNIVERSITY OF CHICAGO
40 Mc Clurg /.00
658
3746
PART I
CASES AND PROBLEMS IN EMPLOYMENT
1. SELECTION AND PLACEMENT
2. PROMOTION, TRANSFER, AND DISCHARGE
3. REDUCTION OF FORCE
I.
Cases and Problems in Selection and Placement
CASE I
The Blank Manufacturing Company has a shop near New York,
building power presses. They have no centralized employment office;
all hiring is done by the superintendent at the gate. Since the super-
intendent is kept busy in the shop, he ordinarily gets down to the
employment gate only a few times during the day. Meanwhile appli-
cants are free to either wait or leave. The superintendent's theory
is that if men really want a job they will wait; if they are not suffi-
ciently anxious for work to wait, they are not wanted. If not enough
men are found waiting at the gate, the superintendent decides to pay a
few cents more an hour; if too many wait, he pays a few cents less an
hour. Production in this plant seems to run along fairly successfully;
turnover appears to be no higher (no records are kept, of course) than
in most other shops in the district, some of which have well-organized
employment departments.
employment departments. The superintendent says wages are the
only thing that counts, and when necessary he is willing to pay a little
above the going rate.
QUESTIONS
1. Can you explain the probable circumstances which led the superintendent
originally to adopt such a policy?
2. Do you believe such a policy to be wise? Why or why not? Would
your judgment have been different had the case occurred in 1918 than
in 1921? Why or why not?
3. Granted that you are the employer and believe such a system to be
unwise, what steps would you take to alter the situation and how?
What would you do if you were the assistant superintendent?
APR 13 '22
281631
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CASE 2
A certain company which has been in operation about ten years
finds that additional business necessitates a large increase in the num-
ber of their employees. As labor conditions make it difficult to secure
the required number at short notice the general manager gives the
employment manager directions to make their starting rate the
highest rate in the neighborhood in order to attract people to the
plant. It is found that it will be necessary to raise the rate four
dollars, and this is done.
QUESTIONS
1. Do you think this policy the best one to pursue?
2. Can you state any difficulties that may result from adopting this policy?
3. Are there any indications that it might have been possible to have
avoided this situation? If not, why not? If so, how?
CASE 3
In the employment department of a large shipyard near New York
it was found that a great number of the men hired for skilled and semi-
skilled work proved incompetent. Many, in fact, appeared to repre-
sent themselves as skilled in trades in which they were mere novices.
This was especially marked, for example, in the case of heaters, passers,
and holders-on, who obtained jobs as expert riveters. In order to
meet the difficulty the management decided that all applicants save
the unskilled must be interviewed by their prospective foremen,
before the employment office finally accepted them. The policy was
continued in spite of certain drawbacks-the difficulty of finding the
foremen in the shipyard, the loss of time of the applicant and of the
foreman, the none-too-careful methods of selection used by the fore-
men, and so forth.
QUESTIONS
1. Was the method the best under the circumstances?
2. How would you have handled the situation had you been the manager
of the yard?
CASE 4
The superintendent of a manufacturing plant employing about
eight hundred men insists that no applicant for a skilled job be finally
employed without first seeing him, the superintendent. One very
definite and immediate difficulty of the plan arises from the fact that
the superintendent is seldom to be found readily and is not infre-
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quently too busy on some production problem to be annoyed. As a
result applicants must wait from five minutes to two hours. A fairly.
efficient centralized employment department has been in operation for
bout two years and, as a matter of fact, more than nine-tenths of the
pplicants sent to the superintendent are approved by him. The
employment manager brought the difficulty to the attention of the
general manager but was unable to secure any action, since the
superintendent stoutly maintained that he had to see what kind of
men were coming into his organization. A little later the employment
manager tackled the problem anew. He proposed the plan of paying
applicants for the hour or two that they were compelled to wait-the
pay to be handled by simply adding to the man's production hours
in case he was hired, and to be charged to employment expenses when
the applicant was rejected by the superintendent. This plan, however,
did not "get across" and was not tried.

QUESTIONS
1. What do you think of the proposed plan?
2. How should the problem have been solved?
CASE 5
The X Manufacturing Plant has a central employment office but
all applicants are sent to the foreman for final approval. An applicant
was interviewed and accepted as a tool-room helper at fifty cents an
hour, subject to the foreman's O.K. In accordance with the usual
practice in the plant, the applicant was then sent to the foreman.
The foreman, who happened to need a drill-press operator more
urgently than he needed a helper, asked the applicant if he could run a
drill press and after a brief and superficial interview, offered him a
position as drill-press operator at sixty cents an hour, and sent him
back to the employment office with a memorandum to that effect.
Meanwhile the employment office had tentatively hired a drill-press
operator for the same vacancy. The employment interviewer
re-interviewed the first applicant-originally taken as a helper-and
satisfied himself that the man was only a second-rate drill-press
operator. The applicant was told that the drill-press job had already
been filled and that he would have to take the helper's job at fifty
cents an hour or no job at all. The applicant, governed by feelings
rather than by logic, chose the "no job," although he had originally
been well pleased with the offer of the fifty-cent job.
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QUESTIONS
Was the employment machinery at fault? How would you improve it?
2. With the existing employment system, was the case handled as well as it
could be?
3. Has the plant suffered by such an occurrence? How?

CASE 6
At a time when toolmakers were urgently in demand, a tool-
maker applicant at a plant in Brooklyn rebelled at the employment
"red tape"-the long application blank, the physical examination,
etc.-and threatened to leave the employment office to go elsewhere.
The employment manager, unable to persuade the applicant, finally
conceded and hired him without the usual forms.
QUESTIONS
1. Did the employment manager do the proper thing?
2. On what grounds might he be criticized?
3. What alternative courses might he have followed?
CASE 7
The production manager of the Miami Marine Engine Company
found that engine parts were not coming through on schedule. In-
vestigation showed that the machine shop was continually held up
waiting for castings from the foundry; and further inquiry showed
that the foundry was falling behind because of an insufficient number
of molders. The superintendent of the foundry cleared himself by
showing that he had been requisitioning molders day after day but
that the employment office had not been able to fill the requisitions.
employment manager was straightway told that unless molders
were secured within a few days, he would be discharged. The
employment manager thereupon went to the one source which he
had hesitated to use. He sent his assistant to a town about 50 miles
away where he knew the molders at a certain plant were out on strike,
instructing him to interview a number of strikers, sign them up for
work at the Miami Marine Engine Company, and have them report
for work the next day. Meanwhile provision was made for perma-
nently housing the new workers.
QUESTIONS
1. Did the employment manager act wisely?
2. Should he have recruited the strikers before he was forced to?
3. Is the company's problem solved?
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4. Comment on the possible effects of the action on the parties involved in
the strike, the company, and the union.
CASE 8
The Batavia department store is the largest in an eastern city. It
is not only the largest but it also carries the best and most fashionable
line of merchandise, occupies the most advantageous site in the busi-
ness district and pays a slightly higher wage than any other store in
the city. Practically all the merchants in the city, including the
owners of the Batavia, are organized in an association, one of whose
rules (which has been repeatedly confirmed) is that no member can
hire any applicant for work who has recently left the employ of a
fellow-member of the association, unless the latter gives his consent.
The Batavia has had considerable difficulty in securing a competent
sales force and in 1919 found that it was losing patronage because of
poor service. Their employment manager recommended to the
owners of the store that they resign from the Merchants' Association.
QUESTIONS
1. Why did the Merchants' Association adopt such a rule? Was it legally
enforceable? Is it legal? Why or why not?
2. Why did the employment manager advise the company to withdraw
from the association? Do you agree with him? Justify your position.
3. Would your decision have been different were you the owner of a five-
and ten-cent store? Why? How?
4. In another city, the merchants have an agreement that they will not
pay any employee who has recently left a fellow-merchant a higher wage
than he previously received, for at least six months. Compare the
effects of such an agreement with the one described in the case. Were
you the managers of the Batavia would you object to such a rule as
this? Why?
5. What are the effects of such agreements upon the work-people involved?
Does this enter into the personnel problems of the merchants? To
what extent?
CASE 9
In a certain Ohio town there are four large machine shops. These
four concerns have a gentlemen's agreement concerning labor policies,
which includes provision for non-recognition of the union and for the
placement in a central file of the names of the men discharged, together
with the reason for discharge a black list in practice. A progressive
young labor manager in one of the plants began a fight for the abolition
of the black list and refused to report the men who left his plant. He
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found, however, that he was asked by telephone or letter to supply
references on many of the men who had left and that in this way he
gave the same information as that previously placed in the black list.
Eventually he became convinced that the old central list had been
simply a more efficient method of supplying the references and decided
to return to it.
QUESTIONS
1. In what particulars does a "black list" differ from the ordinary supplying
of references?
2. Was the labor manager correct in refusing originally to use the blacklist?
Was he correct in returning to the central list? Why or why not?
3. To what extent should the firm in question have used the central list as
a means of selection? What would be the effects of business prosperity
or depression upon their decision and why?
CASE 10
The X Electric Company has a plant about an hour's street-car
ride from Brooklyn. The turnover in their punch-press department
has been exceptionally high, due in part to the nature of the work, in
part to the inconvenient location of the plant, in part to the relatively
low wages. At the time considered-October, 1920-the company
did not feel that a change in wages was necessary, but instead
attempted to get a group of workers who would be satisfied at the
present rate and with present conditions. They advertised in the
newspapers continuously for two weeks and received many applicants.
Each applicant was told in a blunt statement that the wages were
forty-four cents an hour and that there was practically no chance for
advancement. He was then handed an application blank, told to
take it home with him, and if he decided he wanted the job, to fill it
out and return ready for work at 7:30 the next morning. The com-
pany believed that by thus hiring only persons who came to the job
with no false expectations, they could reduce the turnover. (Turn-
over fell markedly, but whether the fall was due to the hiring method
used or to the industrial depression is not known.)
QUESTION
1. What can be said in favor of this method? What objections are there
to it? Do you agree with it?
CASE II
Some of the smaller banking houses in the New York district find
that they have great difficulty in attracting the highest type of young
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man into their business because the opportunities they offer for
advancement are relatively slight as compared with those in the large
banking institutions. Even when men of exceptional ability are
secured they usually leave within a few years to take positions with
the larger banks. One of the medium-sized banks outside the central
financial district, after studying the problem, concluded that the
difficulty was inherent in the nature of their organization and adopted
the following plan as being practically most advantageous.
Young men were sought who should come into the business with
the frank understanding that after two or three years they would, in
all probability, feel that the opportunities were no longer great enough
to hold them. That is, the men were explicitly presented with the
proposition of using this bank as a training school for themselves over
a period of two or three years, at the end of which time, if they had
made good, the bank would gladly assist them in securing positions
with larger institutions. In this way the bank was able to attract a
number of very desirable employees and in the opinion of the manage-
ment, the morale of the entire organization was noticeably improved.
(The plan has been in operation as a definite policy only about a year.)
QUESTIONS
1. Is the plan a good one: From the point of view of the bank? From
the point of view of the employees? From the point of view of the
large banks?
2. What other solutions to the problem would you suggest?
CASE 12
A personnel consultant advised one of his clients—a large plant
manufacturing engines and heavy machinery-to begin using trade
tests of the army type as a part of the employment routine. The
labor manager of the firm agreed that some device was needed for
detecting the trade ability of applicants for skilled work but he
argued that trade tests are unnecessarily formal and difficult to use
and that results of just as great practical value may be attained by
the use of a few unstandardized trade questions which the interviewer
can ask in a purely informal manner. This was especially true, he
maintained, because the chief interviewer had worked in the shop for
years and knew what a skilled man ought to know; and it would be a
simple matter for him to jot down a few questions on each job so that
the other interviewers could use them. The policy of using trade
questions rather than trade tests was put into effect.
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QUESTIONS
1. Do you agree with the labor manager?
$
2. What additional reasons would you assign in favor of informal trade
questions?
I
3. In what respects do you consider standardized tests more desirable?
4. Is there a middle position possible between that of the personnel con-
sultant and the labor manager in the case outlined ?
CASE 13
Intelligence tests which were given to all applicants for certain
clerical positions at C. Caldwell & Company over a period of some
months showed that the turnover was considerably higher among
people scoring either very high or very low on the test than among
those making medium scores. Thereupon the management decided
to accept only those applicants who made medium scores.
I. Was the decision wise?
QUESTIONS
2. What alternatives would you suggest?
3. May tests be used to exclude people who are too bright for a job as wel
as those who are too dull?
4. Does the larger turnover among clerks making high scores prove that
these people are less desirable for the work than are those making
medium scores.
CASE 14
About one hundred bookkeeping-machine operators are employed
in the offices of the Pennsylvania Light Company. Their work is
simple, monotonous, and routine. The turnover on this work has
been high-almost 400 per cent during 1920. Relatively unintelligent
and poorly educated girls can do the work though not as well as
brighter girls and high-school graduates. The company has tried
employing high-grade individuals, promising them early advancement
to other positions. But these people tire of the work very quickly.
Few of them can be immediately promoted since the number of open-
ings in better positions is limited; and if they are not promoted they
leave. Low-grade workers, on the other hand, either take no interest
in their work, are inefficient and not permanent, or they become drags,
not fitting in with the company's policy of building up an ambitious
and progressive working-force through promotion and training. At
present the company attempts to steer a middle course, employing
individuals of medium ability for the work, promoting when oppor-
ΙΟ
tunity arises, and continuing to lose a relatively large number of the
unpromoted people.
QUESTIONS
1. Why not employ only high-grade people and hold them by means of
high wages?
2. Why not employ only low-grade workers and build up a department
of plodders ?
CASE 15
SECURING EMPLOYEES
In 1911 the Philadelphia Rapid Transit Company was on the verge
of collapse. There had been a deficit of nearly one and one-quarter
million dollars the preceding year, the rolling stock was antiquated,
the service poor, and the company was unpopular both with the
public and with its employees. The average wage of trainmen was
only twenty-three cents an hour and there had been two costly
strikes in 1909 and 1910 which had tied up transportation. The
following diagram showing traffic conditions on a typical day from
4:30 to 11:30 P.M. not only illustrates the familiar "peaks" and
"valleys" in passenger traffic, but the excess of service at some times
and the shortage at others.
DIAGRAM I
DEMAND FOR TRANSPORTATION ON A TYPICAL DAY, 4:30 TO 11:30 P.M.

30% Short
7.30 AM.
10% Short
1911
5.30 PM
Morning Rush
25% Service Wasted
Evening Rush
Non Rush Hours
The management was changed in 1911 and Thomas E. Mitten
was placed in charge of the direction of the lines. The co-operation
of the men was secured by the management by definitely stating that
22 per cent of the gross earnings of the road should be used in the future
to pay wages. This was the same percentage which had been paid
II
out in the preceding year. The men were therefore assured that if
the receipts of the company went up, their wages would increase
proportionately.
Mr. Mitten early discovered that one of the big losses came from
wasted car-service. It was the common practice for cars to run over
quite long routes at either end of which they would have few passen-
gers, but in the center of which they would have many and frequently
be overtaxed. Thus a car would run from A to D through B and C.
The travel between A and B and between C and D would be light,
frequently running less than 10 per cent of the car-capacity. Between
B and C, however, travel would be heavy, the car overcrowded, and
many would walk rather than depend on the cars which were some-
what widely scattered and uncomfortable to ride in. Mr. Mitten's
method consisted in increasing the service between B and C by pro-
viding more frequent cars and decreasing the number of through cars,
hence lessening the car-service between A and B and between C and D.
The result was that with more frequent service within the business-
and closely packed living-districts of the city, there was a great increase
in the use of the cars. The number of passengers carried increased
76.6 per cent from 1911 to 1920, of which all but a few per cent was
due not to increases in the population but to more rides per capita.
The acquisition of more modern cars and therefore the increased
seating-capacity per car from 68,000 in 1911 to 131,000 in 1920 (an
increase of 93 per cent) was partially a result and partially a cause of
this increase in traffic. The average speed of the cars was increased
from 7.97 miles per hour in 1911 to 9.33 miles per hour in 1920 or an
increase of 17 per cent. This was accomplished, despite Philadelphia's
crowded streets, with a reduction in accidents from 1 to every 19,000
passengers carried in 1911 to 1 to every 44,000 passengers in 1920.
Wages were increased from twenty-three cents in 1911 to thirty-one
cents in 1916, to forty-three cents in July, 1918, to forty-eight cents
in the latter part of 1918 to correspond to the average wage on the
street lines of four cities of the first class that were unionized. This
was in turn increased to 57 2/3 cents in 1919 and this again to over
60 cents in 1920.
As a result of the increased carrying-capacity per car, the increase
in speed, and the general better feeling, the members of conductors and
motormen decreased from 7,400 in 1911 to 6,000 in 1920 or a decrease
of 19 per cent. As a result of the improvements in management the
traffic conditions in a typical day in 1920 were as shown by the follow-
ing diagram.
*
12
No Shortage
1920
DIAGRAM II

530 Р.М.
2% Short
7.30 A.M
Evening Rush
f
No Service Wasted
Morning Rush
Non Rush Hours?
QUESTIONS
1. What general problems of securing and assigning men which the street-
railway companies face present themselves to you after a study of
diagrams I and II?
2. Study the basic traffic from about 6 A.M. to 8 P.M. and suggest how men
may be secured for this work?
3. What arrangements should be made for men to work during the morning
peak? the afternoon peak? How can men be secured for the excess of
the afternoon over the morning peak?
4. What arrangements in men and cars would you make for the falling off
in traffic after 8 P.M. without disarranging the schedule of the rest of the
day?
CASE 16
THE RELATIVE FUNCTIONS OF THE EMPLOYMENT DEPARTMENT
IN THE SELECTION AND DISMISSAL OF MEN
ย
The Callis Company employing between six and seven hundred
workmen installed an employment department in 1917 under the
direction of an able manager brought in from outside the plant. The
employment manager was given final control over hiring and discharg-
ing. Men presented themselves at the employment office, were inter-
viewed by the employment manager, and if he thought them to be
satisfactory for the positions needing men, he would send them up to
the foreman of the respective departments. No workman could be
finally discharged by a foreman, but each discharge had to be revi wed
by the employment department to be effective. Frequently dis-
charged men, or men leaving because of dissatisfaction with their
foreman were returned to the same department as that from whence
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they had come. Thus one workman who had been discharged by
foreman for swearing at him was interviewed by the employment
manager and sent back to work in the same department, where accord-
ing to the foreman the man proceeded to cause more trouble. In
another instance a workman threw down his tools and refused to carry
out a foreman's order. He went to the employment office (which was
also the pay office) to get his wages. The employment manager
talked with the man and then sent him back to the same department.
In those cases where discharged men were transferred summarily to
other departments, the foremen of these departments complained
that the men were insubordinate and that they were breaking down
the discipline of the workers.
The foremen became almost openly hostile to the employment.
manager and the employment department. They said they were
being held responsible for production but were being furnished incom-
petent help, and that the employment department was breaking down
their discipline and control over their workers.
The employment manager left to take up other work and the firm
put in one of their traveling salesmen in his place. A new policy was
adopted whereby the employment department gave the first inter-
view to applicants and then sent those they thought might be satis-
factory to the respective foremen who passed final judgment as to
whether they should be hired. Foremen were given the power to
discharge, provided that they first consulted with the employment
manager. In cases of gross insubordination, however, the foremen
could discharge without consulting the employment manager and
they could lay men off for lack of work independently of the employ-
ment department. Men could be transferred from one department
to another only with the consent of the two foremen concerned.
The foremen are completely satisfied with the new system and
co-operate excellently with the employment department.
QUESTIONS
1. Of which of the two policies do you approve and why?
2. In what ways could the first method have been made less obnoxious
to the foremen while retaining its main features?
3. To what extent was the first employment manager at fault? Is there
any indication that the foremen were in any way at fault?
4. What light does the experience of this firm throw upon the general ques-
tion of the proper place of the employment or personnel department in a
business establishment? Upon the importance of the foremen?
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2.
Cases and Problems in Promotion, Transfer, and Discharge
CASE 17
An employee gives his foreman notice that he is to leave the next
week. He states that he is not satisfied with the wages he is getting
and is taking a position which he thinks offers him a better opportunity.
A pay change has already been recommended for this employee, but
the foreman has not been notified that it has been approved.
QUESTION
1. If you were the foreman how would you handle the situation and why?
CASE 18
An employee who has been in the employ of this company three
weeks approaches his foreman on payday and asks why he did not get
more pay. On being questioned he says that the employment mana-
ger told him that he would get a raise in pay after two weeks. The
foreman tells the man that the employment manager was wrong and
that he would not be due for a change in pay for six weeks more. He
takes the question no farther.
QUESTIONS
1. Was the foreman's action correct.
2. If not, give your opinion of just what he should have done.
3. Granted that the employment manager did make such a promise, was he
correct in doing so? What steps should he have taken, once having
made the promise?
CASE 19
A large construction company was having a great deal of trouble
during 1919 in keeping a sufficient force of laborers. Labor scouts
were sent out, advertisements were inserted in the papers of different
cities, and railroad fare was paid to men coming from a distance.
There was a continual flow of men coming in and an equally steady
outgoing stream. Investigation showed that the laborers in the
employ of the company could be "fired" by nearly everyone except
another laborer. Time-keepers had the power of discharge; a
superintendent, in walking through the plant, would snatch a slip
from his pocket and hand it to a man whom he had perhaps seen only
once; and the yard boss was known to have "fired" an entire gang at
once. The head superintendent consistently took the stand that he
would back up his foremen, right or wrong.
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The laborers were later organized and an alliance between them
and the skilled craftsmen finally forced the superintendent to issue
orders that only the supervisors who had the men directly in charge
could "fire" them. Later the men were even able to force the removal
of an obnoxious foreman. The superintendent eventually admitted
that under the changed system much more work was gotten from
the men.
QUESTIONS
1. Should the superintendent have taken action sooner than he did?
What should he have done?
2. Was the final action of the superintendent the proper procedure?
CASE 20
For two or three weeks a foreman and an employee had been
having constant friction. The employee felt that the foreman was
unfair to him because of personal reasons. The foreman felt that the
employee had grown to be a trouble-maker in the department and
that although he was a good workman, he was doing more harm with
his talk than he could make up for by his production. One morning
the employee reported to the foreman that a part of his machine was
out of order. The foreman reported that it was the employee's job
to fix it. The employee answered that he was sure that it was not his
job, as he had heard the division superintendent say that the machine
operators should be careful not to touch that part of their machines.
The foreman lost his temper and "fired” the man at once. The man
appealed to his works committee representative who advised him to
go directly to the employment department. The employment depart-
ment felt that the man was a good worker and that it was entirely
unjust to discharge him for what he had said. They also knew that
the foreman had violated the rules of the factory in discharging a
man without consulting the employment department. They told
him to go back to work and sent instructions to the foreman to con-
tinue the man at his job, and took up with the division superintendent
the desirability of reprimanding the foreman for having discharged
the man without consulting either his division superintendent or the
employment department.
QUESTIONS
1. Was the foreman's action correct?
2. Was the works committeeman's action correct?
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3. Was the action of the employment department correct? Had there
been no works committee should their action have been different? Why?
What difficulties might be caused by sending the man back to work?
What difficulties might have been created by approving the discharge?
CASE 21
The Bain Gear Works had been losing a great amount of money
due to spoiled work They felt that the trouble was largely due to
carelessness on the part of the men and hence issued an order that the
next man who spoiled a gear would be immediately discharged. It
happened that the workman who came up for sacrifice was one who
had an exceptionally good record and who had spoiled very little
work in the past. Nevertheless the management felt compelled to
carry out the order and the man was discharged.
QUESTIONS
1. Should the company have issued the order? What should they have
done?
2. Having issued the order, should they have made an exception in the
instance cited?
CASE 22
(TAKEN FROM COMMONS, Industrial Government, pp.125–34)
A boy in the employ of the Nunn, Busch, and Weldon Shoe Com-
pany of Milwaukee poured a can of oil into a batch of cement. The de-
partment in which the boy worked was short of men and it was the rush
season with a general labor shortage throughout the city. The fore-
man did not discharge the boy at the time, but two months afterward
when the rush was over filled out a discharge slip for him. The official
in charge of employment refused to approve the discharge, stating
that the foreman should have discharged the boy before and not have
waited for two months to do it.
QUESTIONS
1. Do you agree with the decision of the employment official? Why or
why not?
2. Granted that the foreman had postponed discharging the boy, was
there any other possibility aside from discharging or permanently
retaining him? If so, what? Should it have been used? Why?
CASE 23
An employee who is working on a napkin-folding machine desires
to work on a crepe-printing machine. On the same job are other
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operators who have longer service and are better qualified to make
crepe printers, but they have not asked for this opportunity.
QUESTIONS
1. Should the operator that asked have the first chance? Why or why not?
2. What do you suggest as a fair rate of pay for the man while he is an
apprentice?
CASE 24
The Milles Manufacturing Company employs a large number of
young men for work as truckers and helpers, promising them early
advancement to machine work if they make good. On account of
the small number of openings occurring on the machines, most of the
truckers and helpers have a comparatively long period of waiting.
Although the general policy of the management is to promote these
men with some regard for seniority, in practice that man is first
promoted who combines a fair amount of ability in his work with a
great capacity for persistently bombarding the foreman with requests
for promotion and additional threat of leaving if he is not soon
advanced. The company feels that it cannot adhere closely to a
policy of promotion by seniority since many excellent new men would
leave if not promoted. Neither does the company feel that it can
promote entirely on the basis of ability, for then some of the long-
service men would be permanently relegated to their present low level.
Accordingly it is thought that the present method, while somewhat
haphazard, is about as satisfactory as any under the circumstances.
QUESTIONS
1. Comment on the advantages and disadvantages of the plan now followed.
2. How would you meet the problem?
CASE 25
A large firm employing six thousand employees has issued the
following general order:
"Instructions to Foremen and Managers
“Promotions.—1. Promote employees to operations of higher
skill and wage as rapidly as possible.
"2. If you cannot take care of the natural ability of an employee in
your own department, see the superintendent and employment officer
and recommend the man for a better position elsewhere, even when it
may mean to you the loss of a good operator.
"Help every employee to succeed to the best of his ability.
18
"3. Any operator wishing promotion or a change to another job
in the company open to him shall be transferred, after serving a notice
as required. The maximum notice required shall be one week."
QUESTIONS
1. Why do you believe the firm in question has adopted such a policy?
2. To what extent do you believe foremen will actually recommend men for
promotion into other departments? How can the firm see to it that their
wishes are carried out?
3. Do you approve of the rule that anyone wishing to be transferred will
be within a week? Why or why not? What possible modifications
might be introduced? Would they be necessary?
CASE 26
A shoe factory employing thirteen thousand operatives issued the
following notice to its employees:
"Square Deal for Workers
"All our better positions filled by promotion.
"All the best jobs in the factories and tanneries filled from the
ranks.
"No good position filled from the outside, but always from
the inside.
"This policy will be followed strictly in future, and be well under-
stood by the workers, so that those in lower positions may confidently
expect, in due process of time, to advance into the better positions
when open.
"Leaving the experienced man where he is, and hiring a new man
for the higher and better positions, is the easiest way, but not the best
way, and should not be considered for a moment.
"The 'good will of the workers' can only be secured and maintained
through fair treatment, and it is unfair to a working member of our
concern to have someone from outside put in above him."
QUESTIONS
1. Do you approve of this policy?
2. To what extent is there an opportunity for promotion for the thirteen
thousand operatives in that plant?
3. What do you think of the policy of filling all "good" positions from
within? What are its advantages, its disadvantages? Why do most
large city banks follow a different policy? Which is the more correct
and why?
19
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f
CASE 26A
The Philadelphia Rapid Transit Company makes the following
provision concerning the choice of runs: "A general picking of runs
will be held at each department twice a year, at which time a choice
of lines and runs operated from that will be given each man in the
order of his standing on the depot seniority list."
QUESTIONS
1. Do you approve of this policy? Why or why not?
2. Is such a plan more applicable to a street or steam railway than to a
manufacturing plant? Develop your answer in detail.
3. In the United States Army, promotion from one grade to another is
largely based on seniority. Do you approve of this for industry? Why
or why not? How does this differ from the choice of jobs within a
grade by means of seniority?
CASE 27
The ABC department store in New York has an advanced and
effective wage policy with provision for periodic wage increases
according to merit and on the recommendation of department heads.
Occasionally, however, an employee leaves to take a position elsewhere
at a higher salary. In a certain instance where a very competent
saleslady had given notice that she was about to leave to take a better
position, the buyer of the department insisted that the personnel
manager should offer her an increase if she would remain. This the
personnel manager absolutely refused to do, on the grounds that if
the employee was worth more than she had been receiving, it was the
fault of the buyer for not having seen that she received all she was
worth; that if she was not worth an increased wage before she gave
notice of leaving, she was not worth more after such notice.
QUESTIONS
1. What were the probable basic reasons which caused the personnel
manager to act as he did? Do you approve of them? Why or why
not?
2. Should he have made an exception in this case? Why or why not?
3. Comment on the effect of his attitude on the buyer; on other department
heads; on the employees.
3. Cases and Problems in the Reduction of Force
CASE 28
During the depression of 1921 the business of a plant manufactur-
ing molding machines which had recently moved out from the center
1
20
of a city to the suburbs fell off to about one-twentieth of normal.
Over two-thirds of the employees had been in the employ of the com-
pany for a number of years, were skilled workers, and were thoroughly
conversant with the complicated but efficient methods of production
which the company maintained. They were also thoroughly con-
vinced, in the main, of the company's good faith. The company
laid off approximately 40 per cent of its force and put the remaining
60 per cent on half-time, thus running their plant at 30 per cent ca-
pacity, trying to keep the men busy in improving the plant and
equipment.
QUESTIONS
1. Why did the company only cut the working-time of the force to 30 per
cent of normal? Why not to 5 per cent? Do you agree with the policy
of the company? Why or why not?
2. To what extent might the company's decision have been different had
the plant been (a) a steel mill; (b) a shoe factory; (c) a packing house;
and why?
3. Had the company used a more simple production system would their
decision have been different? Why or why not?
4. Would there have been any difference had their employees been in their
employ for only a short period? Why or why not? Did the changed
location of the plant enter into the situation and if so how?
5. Suppose the employees had been dissatisfied and suspicious, would this
have altered your decision had you been chairman of the board of direc-
tors? If so, how and why? If not, why not?
6. What light does the policy of this company throw upon the general
accounting practice of regarding direct labor as an ingredient item of
variable cost?
CASE 29
The Colban Paper Company, manufacturing paper boxes and
photo-mountings found early in 1921 that their business had fallen to
about 40 per cent of the previous year's orders. They decided to
reduce their force about one-third and work the remainder on such
part-time as would just enable the plant to meet its orders. Each
foreman was, therefore, instructed to lay off about one-third of his
men, which he did without supervision by the executives of the
company, save that the president ordered that all who had been with
the company twenty-five years or more, of whom there were many,
were to be retained. The plant then went from a schedule of five
and one-half days a week to a maximum of three days, namely,
Monday, Tuesday, and Wednesday, and worked those days in most
21
departments when there was work to keep them that long. Business
continued to decrease. The president of the company issued an
order saying that the girls in the paper-box factory who in the main
were paid by piece-rates were to work as hard as possible and would
be guaranteed at least three days' pay a week at hourly rates. If
they finished all of the work there was for them before the end of the
third day, they were at perfect liberty to go home with no loss of
wages. The foreman of the pasting room, where the paper is built up
into cardboard for the photo-mounting department noticed that the
output of his department, the members of which were paid day-rates,
generally decreased appreciably on Tuesday and especially on Wednes-
day.
The firm was also experiencing some difficulty in that small rush
orders would frequently arrive on Wednesday or Thursday and could
not be shipped until Tuesday of the next week.
QUESTIONS
1. Do you approve of the company's laying off one-third of its workers ?
Would it not have been a better policy to have laid off 60 per cent of the
force? Why or why not?
2. A publishing house, whose business also experienced a reduction, told its
foremen that in deciding who should be laid off they should consider
only relative production, not seniority. Do you believe this is a better
policy than the protection given the employees who had been twenty-
five years in the service which the Colban Company granted? Why or
why not?
3. Most of the railroads have agreements with the organizations represent-
ing the train operatives that in the event of a decline in business that
the train operatives shall be laid off in direct relation to the recency of
employment: How does this differ from the plan of the Colban Com-
pany? Of which do you approve and why?
4. Do you approve of the company's leaving in
the hands of the foremen
the determination of who was to be laid off? Why or why not? What
possible alternatives are there and what are the advantages and dis-
advantages of each?
5. Why did the president give the order which he did for the paper-box
factory? Was this order as necessary in the case of piece-workers as in
the case of day-workers? Why or why not?
6. How do you account for the decline in hourly output in the pasting-room
on Tuesdays and Wednesdays? How might this be partially or wholly
obviated?
7. Granted for the moment that the plant is to work three days a week do
you approve of the policy of working the first three days? Why or why
1
22
not? What possible substitute can you suggest and what would be
its advantages and disadvantages over the plan adopted?
8. In the light of development since the original decision, should the com-
pany reconsider its policy of working three days a week? Why?
What factors would you wish to know before changing the policy?
With the facts now at your disposal what would be your decision?
Justify it.
CASE 30
THE REDUCTION OF THE WORKING FORCE
The Curton Publishing Company, in reducing its working force,
declared as a policy that the sole standard which foremen should
follow in laying off employees was that of relative production. Seni-
ority or family responsibilities were not to be considered.
QUESTIONS
1. Do you believe this policy in general to be correct? Why or why not?
2. A machine shop which reduced its force laid off its single men first and
kept its married employees. When it became necessary to cut the force
still further it laid off the men with no children and kept those with
children. What do you think of this policy? Is it philanthropy or
business? Why?
3. It is sometimes contended that there is no real issue between using
efficiency, seniority, or family responsibility as a criterion in determining
lay-offs, since it is generally agreed that the men who have been long in
the service of the company are more efficient than the men more recently
employed, and that the men with family responsibilities are more
reliable and take a greater interest in their work than those who have
only themselves to support. Do you agree with this contention? Why
or why not?
4. How possible would it be for a pulp mill to use production records as the
determinant of who should be laid off? Why? What possible alterna-
tive methods could such a plant use and what would be their advantages
and disadvantages?
CASE 31
REDUCING THE WORKING FORCE
The Philadelphia Rapid Transit makes it a practice to lay off the
most recently employed workmen when business is slack and retaining
men in the order of seniority.
QUESTIONS
1. Why does the company follow this policy? Do you approve? Why or
why not?
ง
23
{
2. Most railroad companies, together with many street-railway companies,"
and other public utilities also follow the seniority rule in lay-offs. How
do you account for the fact that this is more common in public utilities
than in ordinary manufacturing concerns?
1
CASE 32
On account of lack of business it is necessary to reduce the number
of employees in a department. Twenty men who have been working
nights can no longer be employed at night-work. The day crew must
also be reduced by ten men. Of the one hundred men in the depart-
ment, forty have served less than a year. At least half of these are
more efficient employees than some who have served from two to five
years.
QUESTIONS
1. What steps would you take in making the reduction?
2. Should seniority or efficiency be the primary consideration in deciding
who should be retained? Why or why not?
3. How many of the new and how many of the old (if any) would you
lay off? Why?
CASE 33
THE REDUCTION OF THE WORKING FORCE
A concern manufacturing soda-water fountains and fixtures found
its business falling off and the prices of its products dropping. It felt
it necessary to reduce wages but the employees, although unorganized
and in the main unskilled, were greatly opposed to a wage-cut. The
firm therefore laid off more men than the conditions of the business
warranted and hired men at the reduced wage-scale to make up their
quota.
QUESTIONS
1. Do you approve of the action of the firm? Why or why not?
2. Did not the action of the company mean an increased labor turnover
with its increased costs? Is turnover ever economically profitable to
the employer?
3. What is likely to happen to the wage-scale of the employees who remained
with the plant?
4. In what respects would the situation have been different had the workers
been more skilled and why? Had they been organized?
CASE 34
REDUCING THE WORKING FORCE
The Savord Machine Company cut its force in 1921 to less than
one-half its previous number. When the department heads met in
24
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{
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committee to determine who should be laid off, the superintendent
of the shops recommended that for one, the head of the tool room who
had been in the employ of the company for twelve years should be
discharged. The superintendent said that the man was inefficient
and a trouble-maker. One of the department heads protested against
such action, declaring that if this were true that the man should have
been discharged long before this but that since the company had not
done this, he should not be thrown out at the first approach of bad
times. The committee, however, voted to adopt the recommendation
of the superintendent and the man was discharged.
QUESTIONS
1. Do you approve of the action of the committee or the position of the
dissenting department head? Why?
2. Was the company justified in discharging the man rather than in laying
him off? What is the practical difference between the two?
CASE 35
DECREASING WORKING FORCE, OR LAY-OFFS
The Jay Manufacturing Company, which produced conveying
machinery among other items, made a miscalculation in making its
bid on a contract for the construction and installation of elevators.
It was awarded the contract but lost so much money on the job that
it stopped manufacturing conveyors. It laid off most of its employees
who were engaged on this branch of its business, many of whom
found positions with other firms which manufactured conveyors.
A few years later, the Jay Company decided to re-enter the field
and offered bids for and received several large contracts for conveyors.
It found great difficulty, however, in assembling a force competent
to manufacture them, and experienced an attendant money loss.
After a year or so it again abandoned their manufacture and dis-
banded their conveyor force only to resume their production a few
years later.
QUESTIONS
1. Is this in any way a problem of personnel? If so, why and what?
2. How do you account for the various decisions of the firm?
3. What factors should the firm have taken into consideration in making
their decisions?
4. Of what service could a "personnel manager" be in such situations as
are described above?
25
CASE 36
REDUCING THE WORKING FORCE
The Amalgamated Clothing Workers have agreements with the
manufacturers of men's clothing of Rochester, New York; Baltimore,
Maryland; and Chicago, so that slack work during the dull seasons
and the periods of business depression shall be shared equally by the
working force. Thus if forty-four hours constitutes a normal week's
work, and if a firm has only half its normal orders, then all the mem-
bers of the force are entitled to twenty-two hours of work weekly.
Instead of half the force working full-time, therefore, all of the force
works half-time.
QUESTIONS
1. Why did the union make this demand?
2. Would the employers adopt this policy of their own volition? Why or
why not?
3. What do you think of the method from the standpoint of: (a) the
efficient workers, (b) the inefficient workers, (c) the average workers,
(d) the manufacturers, (e) society?
4. Assuming that the principle outlined above is adopted, if you were an
employer would you try to put into effect say half-time each week or
have men work every other week?
CASE 36A
The Roberts Foundry Company, manufacturing steel castings,
uses an electric furnace to melt its steel. The company's business
fell off rapidly in 1921 and a reduction in their output necessarily
followed. The company, however, found that the furnace, due to its
electrical equipment, could not be run economically with less than a
charge of 7,000 pounds of steel. Furthermore, it was extremely
wasteful to run only one charge a day, due to the expense of heating
the furnace, and at least two charges were needed properly to utilize
the heat generated for even one charge. For those days in which the
plant ran, therefore, it had a minimum production of 14,000 pounds
of steel.
In addition to the furnace force, the laborers, and the helpers,
about thirty molders were needed at the past rates of production to
make the molds for the 14,000 pounds of molten steel. The company,
however, due to the business depression, was not producing large
standardized quantities but was filling small job orders as they were
placed. Because of the variety of the work, the past averages of
26
production could not be expected to prevail uniformly on all jobs;
and the company found that on many jobs it needed more than thirty
men a day, while occasionally forty and over were needed.
The plant ran irregularly, working only a few days a week, the
number generally ranging from two to four days, due to the irregu-
larity of orders. It was impracticable to lay off one-half of the thirty
molders and have the remainder make up molds in advance for the
next pouring since the molds would not keep more than eighteen hours.
Each day's molds had to be made that day.
It was noticed that the production of molds per man was decreas-
ing yet every one of the molders seemed to be as busy as ever and to be
using every effort. It was found that in order to get the work done,
that between thirty-five and forty men were needed every day that
the plant was in operation, and that on some days when smaller cast-
ings were being made between forty-five and fifty molders were needed.
One of the foremen proposed that all but thirty of the men should be
discharged and that of these thirty, twenty-five should be given work
whenever the plant was in operation and the remaining five should be
held in reserve in the case of smaller castings being demanded.
QUESTIONS
1. How do you account for the decrease in production ?
2. What was the validity of the foreman's proposal? How could a smaller
number of men do the work which a larger number had found difficulty
in doing?
3. Would these problems have presented themselves in a foundry which
melted its pig-iron in an ordinary cupola by means of charcoal and coke?
27
}
}
+
PART II
EDUCATION AND TRAINING
CASE 37
In the repair shop of a large eastern shipyard the foreman main-
tained that he had no need for any of the "new-fangled courses of
instruction" that were being proposed for training apprentices. He
had trained too many good machinists in his shop, he held, by giving
boys personal instruction and letting them do odd jobs as these arose.
And he was, as a matter of fact, both an excellent machinist and a
man with keen personal interest in the young men under him. He
could point to a dozen men about his shop who had started as unskilled
helpers under him and were now classed as general machinists. His
method of training was to give the apprentices almost any sort of a
repair job of a fairly simple sort, show him how to get started, and
then let him manage in some way to get the job done. Usually the
"some way" was by asking frequent questions of older workmen in
the shop and getting their assistance on difficult parts of the jobs.
(The shop was "open" and there was no piece-work.) Thus, by
doing now one kind of job, now another; using a variety of hand and
machine tools as these were required; spoiling a certain amount of
work; being aided by various other workers-the apprentice did
frequently work out his salvation and became a competent machinist.
The apprentices who fell down badly on a few jobs were "fired." The
foreman had persistently refused to try out any more systematic
scheme of training and the management had not pressed the point,
principally because they recognized that the existing method did -
produce rather satisfactory results.
QUESTIONS
1. Discuss the advantages and disadvantages of the kind of training
described.
2. Should the foreman be overruled in this matter?
CASE 38
EDUCATION AND TRAINING
The Olan Foundry Company for a number of years has had a col-
lective agreement with the Molders' Union. Relations have been
28
harmonious, no strike has ever occurred, and any differences that
have arisen between the management and its employees have been
easily adjusted between the management and the union representa-
tives. The company has introduced a large number of molding ma-
chines which have taken over the major amount of the work formerly
done by the bench molders. In consequence of this machine the
amount of skill required in tamping the sand and shaking the mold
out from the pattern has been greatly lessened. In the opinion of
the superintendent of the plant not more than six months is required
to teach a workman the all-around use of the molding machine for
various types of molds and only a few days or weeks at the most to
train the worker how to use the machine for a specific mold. The
Molders' Union, however, insists upon a provision in the contract
that no man shall be allowed to make molds who has not served a
four-year apprenticeship. The firm not only acquiesces in this
demand but believes it to be good business for them to do so since
it permits them to pay apprentice wages to men and boys who other-
wise would have to be paid a journeyman's rate.
QUESTIONS
1. Why do the unions make such a demand?
2. Is the company correct in its belief that they are profiting by this arrange-
ment? Outline fully the grounds for your positions. Is there any
difference between the long- and short-run view? If so, what is it?
3. In the event that the company concluded that this provision was eco-
nomically disadvantageous for them, would you advise them to break off
relationships with the union? Why or why not?
CASE 39
EDUCATION AND TRAINING
The Hollins Paper Box Company installed a vestibule school in
1918 for the purpose of training the many new workers who were
being hired by the plant both to increase the size of the force and
to replace those who were leaving. The vestibule school consisted
of two different machines which were set up in a room outside the
box department proper. Special instructors were assigned to each
machine and a superintendent of training in the person of a college-
trained woman with experience in welfare work was secured.
After many months of trial, it was found that practically everyone
was dissatisfied with the vestibule school. The workers were trained
at only two operations, whereas there were over twenty different
jobs in the factory itself. In consequence, the new employees were
29
not being trained for the vast majority of the jobs to which they were
assigned. It was also impossible for the vestibule school tỏ train
workers for transfer. Furthermore, it was complained that the work-
ers were coming from the vestibule school very poorly trained even on
those machines and operations in which they had been instructed.
The girls seemed to have little idea about the necessity of reducing
waste, or care in the handling of the machine, or of the necessity for
speed. In addition there was a great deal of opposition to the
superintendent of training. The forewoman declared that she was
not co-operative and that she did not know what she was attempting
to teach. The girls in the factory did not like her, because they felt
that she constantly assumed a superior attitude and was harsh in
her criticism of the girls under her general supervision.
The company decided to abolish the vestibule school and the
superintendent left their employ to take another position. A new
system of training was set up whereby newly employed girls were
taken into the box factory itself and placed as helpers at a machine.
Two women who had been in the employ of the company for many
years and who were skilled on practically every machine in the shop
were designated as instructors and reported directly to the superin-
tendent. These instructors were to train the new worker at the job
to which she had been assigned. When this girl had been sufficiently
trained the instructor moved to another machine to instruct novices
there. On some of the machines there are three workers. Once the
novice has become skilful as a helper at the wrapping machine, she
is moved up, if there is a vacancy, to the position of paster-on and is
given special instructions by one of the teachers. After becoming
skilled here, she is eligible for the operator's position. When workers
are transferred from one position to another they are broken in on the
job by the special instructor. All learners are guaranteed day-wages
until they are able to earn piece-rates.
QUESTIONS
1. Why did the company install the vestibule school in the first place?
2. From the information at hand do you believe the vestibule school could
have been made a success by a change of superintendents of training?
Why?
3. Had the vestibule school been equipped with the twenty different
varieties of machines used in the factory would not this have made it
a success? Why or why not? Why did not the firm so equip the
school? Were they wise?
1
30
1
4. Do you believe the new system of training is superior to the vestibule
school? Why or why not?
5. What should be the experience and qualifications of a supervisor of
training?
CASE 40
The Conway Manufacturing Company has a system of training
apprentices by having them work successively on a series of produc-
tion jobs. On some of these jobs the boys soon become nearly as
proficient as the regular workers who have been on the jobs for a long
period. The boys receive apprentice wages (from 22 to 40 cents an
hour) while the men beside whom they work may be getting 60 to
80 cents. As a result apprentices are continually leaving the company
or asking to be left on this or that job permanently. For the appren-
tices, 60 or 70 cents today is more alluring than a possible 90 cents or
a dollar at the end of two or three years' training. The company
considered the question of paying apprentices more but decided that
higher rates were unwarranted since the apprentices were constantly
being transferred and trained for new jobs and hence were scarcely
ever producing in a manner comparable with that of the permanent
workers on a job.
QUESTIONS
1. Do you agree with the decision of the management?
2. What alternatives can you suggest that may help solve the problem?
C
}
31
}
PART III
MAINTENANCE OF AN EFFECTIVE, LOYAL, AND
INTERESTED GROUP OF WORKERS
I. GENERAL
2. WAGES AND REWARDS
3. CONDITIONS OF WORK, etc.
4. REGULARIZATION OF EMPLOYMENT
5. HOURS (OMITTED)
I. General
a) Labor Turnover
CASE 41
The Hercules Oil Refinery Company of California employs
approximately one thousand men. Troubled by its high labor
turnover, in 1918 it installed systems of pensions, life insurance, and
sickness disability benefits for all employees who had served one year
or more and graduated according to the length of continuous service.
Thus the life insurance payments amounted to one month's salary for
each year of continuous service but were not to exceed twelve months,
the sickness disability benefits carried full pay up to two weeks'
sickness for all employees who had been in the employ of the company
one but not two years, full pay up to four weeks' sickness for those who
had been employed two but not three years, and so on reaching a max-
imum of full pay up to twenty-six weeks' sickness for all employees
who had served ten or more years. All employees were hired on a
day-wage basis and were put on the monthly salary basis "as soon as
possible after hiring" and were allowed "any reasonable amount" of
time off with pay each year.
Despite these measures the turnover for 1918 was 296 per cent,
an increase rather than a reduction of the rate during the preceding
years.
QUESTIONS
1. Can you account for the high turnover?
2. Why did not the system of pensions and insurance that was installed
decrease the turnover greatly? Can you describe any situations in
which you believe such a system would have decreased turnover? Why?
32
4
1
3. What methods do you believe should have been adopted by the company
originally? What should it have done in 1919 after the year's experience
with the plan and why?
CASE 42
The manager of a large construction company finds that the labor
turnover on one job is very high and that it is difficult to hire men.
The company bears a bad reputation in that locality. Upon investi-
gation it develops that 60 per cent of all men who leave are discharged.
QUESTIONS
1. Were you the manager what methods would you adopt to investigate
the situation and attempt remedies? Why?
CASE 43
Turnover figures for the drafting room of the Keller Tool Company
(the largest drafting room in the city) suddenly increased to a monthly
rate of 25 per cent during the early part of June, 1920. Inquiry
among the men revealed considerable resentment over the fact that
they were forced to work eight and one-half hours when other drafting
rooms in town, they alleged, had adopted summer hours of eight.
Investigation showed that an eight-hour day had been adopted by
about half the drafting rooms in the city. After considering the
probable effect on the men of a belated “following suit" under pres-
sure, the management decided on a positive counter-move. They
pointed out to the men the necessity for the longer hours to keep up
production and announced at the same time a general 10 per cent
wage increase. The turnover fell to almost zero.
QUESTIONS
1. Was the problem well handled?
•
2. Would you criticize the management for letting the problem arise?
3. Comment on the remote as well as the immediate effects of the action
taken.
CASE 44
The Barlow Bag Company of Boston uses only piece-rates as
methods of payment and does not have a training department.
The manager of the company discovers that two-thirds of all the
girls hired leave before the end of the first month. On the other
hand there are many employees who have been with the firm for over
five years. The manager wishes to stabilize his working force and
33
establishes a vestibule school to give the new employees two or three
days' training before assigning them to jobs.
QUESTIONS
1. Do you agree with this decision? Why?
2. Has the manager solved the real difficulty? Why or why not? What
new steps, if any, do you propose?
b) Absenteeism
CASE 45
The Edward Johnson Company, a large eastern department store,
has been troubled with frequent absences and almost constant
tardiness. It instituted a system of fines whereby the employee
loses one-half an hour's pay for every tardiness of less than fifteen
minutes, etc. The employees ask that the fine be applied only to
cases of unnecessary tardiness and request that each department
superintendent shall pass on the cases.
QUESTIONS
1. If you were the manager would you accede to the request of the em-
ployees? Why or why not?
2. Could the management have met the situation better originally than
by the imposition of the fine? Should the fine be greater than the
amount of time lost? Why or why not? Should the fines revert to
the employer or go to a common welfare fund for the employees? Why?
CASE 46
The Durant Company was troubled during the war with a high
rate of absenteeism, and to offset this, it offered an attendance bonus
of 10 per cent for perfect attendance for a week and also installed a
system of visiting the absentees by nurses. As a result of the business
depression, attendance improved until 95 per cent of the force were
receiving the bonus weekly. A meeting of the executive heads was
called to consider whether these two items should be eliminated.
QUESTIONS
1. What would be your decision and why?
CASE 47
The Island Shipbuilding Company had an unusually high percent-
age of tardiness, due in no small measure to the distances from which
many of the workmen came and to the poor transportation facilities.
34
In particular, an antiquated local railroad ran an accommodation
train from the nearby towns, which arrived at the shipyards either
a minute or two before the seven o'clock whistle or a minute or two
after, with the greatest indifference. The next earlier train was
twenty minutes earlier. In order to do away with the excessive
tardiness, the company instituted a rule that employees arriving even
a few minutes late would not be admitted to the yards until 7:30.
The plan brought about a marked and permanent (in effect more
than a year) decrease in the amount of tardiness. It is true, however,
that it aroused considerable ill feeling on the part of the men who
occasionally missed the early train and reached the yards at about
7:02.
QUESTIONS
1. Was the rule adopted by the company a desirable one?
2. What alternative plan would you suggest in this particular situation?
3. Do you approve of such a system on the part of a company located in
the center of a city? Why or why not?
2. Wages and Rewards
a) Methods of Payment
CASE 48
CHOICE OF METHOD OF PAYMENT
A firm manufacturing machines has five departments: (1) a
pattern shop where the patterns for the necessary castings are made;
(2) a foundry where gray iron castings of at least three general types
are made: (a) single castings made to order, generally large and
made on the floor by hand, (b) small orders running from ten to
fifteen units, (c) multiple production of standardized units generally
made with the molding machines; (3) a machine shop with the usual
equipment of lathes, drill presses, boring mills, and gear cutters,
manufacturing machine parts for a fairly wide variety of machines
listed in a catalogue and manufactured to order; (4) an assembling
shop where the parts are put together to form the finished machines
(the number of these parts in any one machine varying from ten to
over a hundred); (5) a repair shop where damaged machines or machine
parts are repaired. The firm is considering in general the question
of what methods of wage payment it should use in the various shops
and in particular where piece-rates and time-rates should be applied.
From the information given, which method would you advise for
the various types of work and why?
35
CASE 49
One of the departments of a company manufacturing pasteboard
products is the pasting-room where the paper stock is built up into
pasteboard. The chief machine in this room is the pasting-machine
which by means of rollers pastes together two and sometimes three
plies of paper. The rolls need constant care and adjustment to secure
an even fitting of the plies of paper to each other, and care is also
required in watching for tears or rough edges in the paper, as well as
in regulating the flow of paste. The output per man in the depart-
ment has not increased appreciably within the last few years although
the other departments have shown a big increase. The men are chiefly
old hands and are paid on day-rates and the general manager of the
plant raises the question as to whether they should not be paid on
the piece-rate basis and favors setting such rates. The foreman of the
department, who is also assistant superintendent of the plant, how-
ever, opposes this step and succeeds in continuing the time-rates.
QUESTIONS
1. Why did the general manager in your opinion favor adopting piece-rates
for the pasting-machine?
2. Why do you think the foreman opposed the introduction of piece-rates?
3. With the information at your disposal which method do you favor
and why?
CASE 50
METHODS OF WAGE PAYMENT
The Russet Engine Company, manufacturing locomotives and
other machinery, has several thousand men working in its shops.
Its method of production is as follows: The company offers the
production of a given number of parts to a foreman at a certain figure.
If he accepts, he furnishes labor for the job, guaranteeing them an
hourly wage and in a few cases a piece-wage. These men work in
the plant with company materials, machinery, and tools. The com-
pany keeps an account of labor costs on that job and maintains a
pay-office for the men. The contractor is debited with the wages
paid to the men who receive their pay from the company. When a
job is finished the amount advanced in wages is deducted from the
contract price and the difference is given to the foreman-contractor,
and if he has no further work for any of the men they are then laid
off from his employ.
QUESTIONS
1. Why do you think this company installed such a method of produc-
tion? Do you approve of it? Why or why not?
36
2. How does this system differ from the production under the domestic
system? From home-work in the glove or clothing industries ?
3. Professor Ashley says that one of the significant features of the factory
system is that the capitalistic class thereby assumes the direction of
production. To what extent does his statement apply in this instance ?
4. Is "driving" likely to prevail under such a system? Why? Is this
any concern of the management, provided that it gets production at a
relatively low figure?
5. What is likely to be the effect of such a system upon the following:
(a) waste of materials, (b) breakage of machinery, (c) accidents,
(d) quality of finished product? Why?
6. What possibilities are there under such a system for: (a) scientific
selection and placement of employees, (b) an efficient system of training
for the job, (c) proper transfers and promotions? Why?
7. What is the probable effect of such a system upon turnover? Why?
8. What work could a centralized industrial relations department do in
such a plant?
9. The Edward Phonograph Company has a similar system to that of the
Russet Company but they provide, in addition, a centralized applica- .
tion office whereby the foremen-contractors are put in touch with the
available labor supply. Why do you think this company put in this
office? Do you think it is preferable to the system of applications at
the Russet Company? Why?
10. The management in the Russet plant tries to prevent wages from being
cut too low by the subcontractors and sets certain accepted rates for
the various occupations. Why does it concern itself with this? Should
it? Why? Does this prevent differences in pay for the same work?
How?
CASE 51
WAGES AND INCENTIVES
The Castle Company, manufacturers of paper boxes, produced
mostly to fill specific orders placed after the purchaser had compared
the bids of a number of paper-box concerns. In making these bids,
the Castle Company computed their direct labor cost on the piece-work
rates they had set. These piece-rates were secured by timing the
fastest worker. In practice, however, a large proportion of the
workers were unable to reach the speed of the fastest worker and in
consequence their weekly earnings would fall below the current
weekly wage. Where the deficiency was appreciable, the company
added an allowance to their weekly piece-rate earnings to bring their
wage up to the current accepted amount and enable them to "make
out." In one year much over $10,000 was so paid out in extra
allowances.
37
A new superintendent was appointed to take charge of production.
He revised the piece-rate system and installed a new system of rates.
The average past production of all the operatives at a job was taken
as the basis upon which the rates should be computed. The going
wage for an hour's or a week's work was then divided by the average
production for that period to secure the basic rate price. The workers
now found themselves able to earn the current week's wage and the
firm was not compelled to add allowances to their weekly earnings.
On some operations such as the wrapping-machines a standard
was set. On all boxes wrapped up to this standard the operator was
paid the usual piece-rate price of sixty cents per thousand. For all
units produced over the standard, one and one-half times the usual
piece-rate, or ninety cents per thousand, was paid. The helpers at
these machines were guaranteed a weekly wage of twelve dollars if
the standard was not reached or barely attained. For all units
produced above the standard the helper was paid a bonus in addition
to his basic wage which amounted to 50 per cent of the straight
piece-rate paid the operator or thirty cents per thousand.
QUESTIONS
1. Why did the firm add allowances to the piece-workers' earnings to
bring them up to the current weekly wages?
2. What difference did it make to the firm if the worker made the current
weekly wage through piece-rate earnings plus allowance or by piece-
rate earnings exclusively? Did not the system of the new superintendent
mean that the firm would have to pay out the same amount of money as
before to the workers?
3. How accurate is the computation of average productivity in basing
piece-rates when the type of work varies from order to order and hence
the relative speed of production?
4. Must firms with systems of standards pay the workers less than straight
piece-rates for production in excess of the standard? How can this
firm afford to pay one and one-half times the piece-rate for productions
above the standard? Is it wise in so doing?
5. Many industrial experts hold that it is bad policy to pay a helper a time-
wage on a job upon which the operative is being paid piece-rates. Why?
Would you favor paying both piece-rates? Why or why not? Are
the wrapping-machine helpers at the Castle Company paid on a time-
or piece-wage? Will the systems secure co-operation between the
helper and worker? Why or why not?
6. The helper at the staying-machines in the Castle factory is paid three-
fifths of the operator's wage, with a basic guaranteed wage of twelve
dollars per week. How does this differ from the method at the wrapping-
machine ?
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CASE 52
FIXATION OF STANDARDS
The Custon Company, publishers of periodicals, has established
a standardization department which sets job standards and wage
incentives both for manufacturing and office work. The method
followed is in its general outlines as follows:
1. Fixation of standards.-(a) The average (mean) of the past
production of all operatives at that job is taken. (b) Then by means
of a time-study of the fastest employee at that job, the maximum
efficiency and output which an individual employee can reach under
present conditions is secured. This time-study is based upon the
operation as a whole and not upon its elemental parts. (c) A'standard
is then fixed in relation to (a) and (b). This standard is almost
invariably higher than the average but is less than the maximum.
The exact fixation of the standard is dependent upon a number of
factors: first, the observation and judgment of the man making the
time-study as to how much the workers can properly accomplish
(this judgment is checked up and supplemented by the foreman or
superintendent of the department in question); second, the relative
distance between the average and the maximum. Thus if the average
is 400 units an hour and the maximum 1200, then the standard set
would be higher than if the average were 400 and the maximum only
800; third, an interrelationship with the amount of wage-payment
which will be discussed later.
2. Wage payment.—The standard once set, workers are paid the
previous hourly rate even if they do not come up to it. Strict
record, however, is kept of individual production and an employee
failing to equal or exceed the standard after a reasonable period of
time is dropped. An inducement is offered the worker to exceed
the standard by means of bonuses which are computed somewhat as
follows: (a) A worker turning out the maximum production measured
under (1) is not to receive more than one-third, or at most one-half
more than the basic hourly or weekly rate. Thus if the basic weekly
rate is $14.40 for a week's work of 48 hours at 30 cents an hour,
then the worker at maximum production is not to receive more than
$19.20 (40 cents an hour), or at the most $21.60 a week (45 cents an
hour).
b) The total additional wage to be given to the worker who attains
the maximum is divided by the number of units between the standard
set and the maximum to secure the bonus per unit produced above
39
·
the standard. Thus if the standard set is 550 units an hour and the
maximum is 800, and 10 cents an hour is the total additional amount
to be paid the maximum producer, then the bonus per piece is IC/250
equaling 1/25 of a cent per piece, or 1 cent for every 25 pieces above
the standard.
The foregoing is true in those cases where the bonus so arrived
at is less than the unit piece-rate price when only the standard is
achieved. Thus the bonus for every piece over the standard is 1/25
of a cent while the labor cost per piece if the standard is accomplished
is 30/550 or slightly less than 1/18 of a cent per piece.
c) If, however, the bonus so arrived at produces a piece-rate
price for units above the standard which exceeds the piece-rate price
at the standard then the worker is paid a bonus per piece somewhat
less than the price per unit at the point of standard production. This
may be illustrated as follows: Suppose the standard fixed had been 650
not 550. Then according to the rule laid down in (b) the bonus per
piece would have been found by the equation 10/150 (i.e., 800-650)
equaling 1/15 of a cent per piece or 1 cent for 15 pieces. This how-
ever is in excess of the direct labor lost if the standard is accomplished,
which is 30/650 equaling 1/22 cents per piece, or 1 cent for approxi-
mately every 22 pieces. This bonus is therefore not paid but instead
a bonus which is less than 1 cent per 22 pieces, i.e., say 1 cent for every
30 pieces. As has been intimated, this consideration of bonuses
enters into the calculation of the standard itself. Thus where the
bonus method outlined in (b) is greatly in excess of piece-rate costs at
the standard, and where the method outlined in (c) would yield much
less than a 33 per cent increase in total wage to the attainer of the
maximum, then a revision of the standard itself is often made to bring
maximum earnings to more nearly a 33 per cent differential over the
base rate. This again may be illustrated by the previous example.
A bonus of 1/30 of a cent per piece would mean if the standard were
650 per hour, that the worker at the maximum would receive only
5 cents an hour more than the basic wage. To provide sufficient
inducement, frequently the standard itself would be readjusted
downward from 650 although by no means necessarily in exact propor-
tions to yield a precise 33 per cent differential for the producer of
the maximum.
QUESTIONS
1. Describe briefly and in your own terms the gist of this system.
2. Do you approve of it? If so, why so? If not, why not? Discuss
the matter from the standpoint of (a) the employer, (b) the employee.
40
{
3. From what sources does the Custon Company derive a gain from this
system? Work out in detail and illustrate graphically.
4. If the standard set is higher than the previous average produc-
tion, should the same basic rate of pay be given? Why or why
not?
5. Would the standard set exceed the previous average more in the case
of hand work or machine work? Why?
6. On what basis do you believe that 33 per cent or 50 per cent above the
base wage was taken as the maximum for workers to secure? Do you
agree with it? Why?
7. On slip-sheeting work where the printed sheets from the pressroom are
separated from the intervening thin sheets of blotting paper, a standard
was set in the Custon plant which was double the previous average.
The great majority of girls protested, sincerely declaring that it was too
high, but soon a few attained it and after a time practically everyone
had reached it. Production kept on increasing until two years after-
ward the average production was four times what it had been previously.
Very large bonus earnings were consequently made by the workers.
How do you account for the inability of the workers to gauge the
amount which they could produce?
8. On certain jobs when the standard fixed was found to be so high that
the workers could not reach it the standard was lowered. Should the
standard be increased in those operations such as slip-sheeting where
it was found to be much lower than the capabilities of the workers?
Why or why not?
9. On some of the jobs the workers are given daily cards showing the
amounts which they should have turned out at various times during
the day to be living up to the standard. Amounts above the standard
are also given, with bonus attached to each. The work is inspected
and measured at stated periods during the day and the card punched to
show the actual output. In this way the worker can compare his
actual progress with the scheduled progress. What are the advantages
of this system? What are the disadvantages if any? Could it be
applied to lathe work, to ditch-digging, weaving, printing-press work,
etc.? Why?
10. Could standards be set for the work of a private secretary, a dicta-
phone operator, a file clerk handling correspondence, a loom fixer?
Why or why not?
II. It is frequently the custom of men earning a bonus above the basic
wage. to turn the latter over to their wives and retain the former as their
own spending money not telling their wives that they have received it.
Should the employer concern himself with this? Are there any means
whereby he may assist in a more beneficial utilization of this bonus
system? If so, what are they? Should he use them?
41
CASE 53
The Custon Company found the work of its folding and stitching
department to be costly and relatively ineffective. This process
consisted in gathering the signatures (sections of the periodical
ranging from four to thirty-two pages) in proper sequence, wire-
stitching them, and delivering the book (complete periodical) ready
for trimming. A machine was invented which made the work more
automatic and reduced the necessity for any hand sorting. After
long study by the standardization division, however, it was found that
the efficiency of the department was still far below what could be
expected. There were many stoppages of the machinery, thus
retarding production. A considerable percentage of the books were
so spoiled that they had to be pulped as paper at a loss of eight cents
per book. Moreover, 2 per cent of the books were imperfect and had
to be made over again at a cost of approximately five dollars per
thousand or fifty cents per hundred.
A triplicate set of standards and bonuses covering production,
waste, and imperfections was set up. Contrary to usual custom, the
previous average production was taken as the standard, and output
in excess of that was to be paid for at the rate of 40 per cent of
the piece-work labor cost, when the standard was produced. The
average previous waste and the lowest previous waste of the most
careful operator were both ascertained. The operators were to be
paid a bonus of three cents on every decrease in book wastage lower
than the previous lowest waste. The standard for imperfect work
was set at per cent and workers were paid twenty cents per hundred
for all books less than this standard which were imperfect.
The result of this system was greatly to reduce waste and imperfect
books and thereby at the same time increase production. The great
majority of the workers soon began to exceed the various standards
set and to earn considerable amounts in bonuses. The composition
of the bonuses, however, was found to be complicated and, more
important still, the workers had difficulty in determining how the
bonus was computed and why they received what they did. Special
trouble was experienced as regards waste. The amount of the waste
was weighed in another room out of sight of the worker, and the
standard waste set varied according to the output of the machine
and the variety of signatures used.
As a result of this, the method of paying the bonus was changed.
The bonuses previously paid for the reduction of waste and imperfec-
tions were omitted for these specific items but were transferred to
42
production. Production now became the sole basis upon which
bonuses were paid. A penalty of one cent for every imperfect book
turned out was also imposed. The method of transferring the waste
and imperfection bonuses to production was by ascertaining how
much in bonuses from all three sources the workers had averaged per
hour and then dividing the average composite bonus by the average
production in excess of the standard to secure the composite bonus
per unit of production. This bonus per piece was modified largely
by means of a tapering of the bonus after output reached a certain
point above the standard, so that the men with extremely high output
would not receive too high wages.
The alteration of the bonus system was followed after a period
of time by a still further increase in production and a substantial
reduction in waste.
QUESTIONS
1. How did the system of setting standards for production in this case differ
from the system generally followed as described in Case 52? How do
you account for the difference?
2. What gains did the company make on increased production in this case as
contrasted with its general sources of gain from increased production?
3. In what ways did the company gain through the reduction of waste?
Illustrate graphically its savings.
4. In what ways did the company gain through the reduction of imper-
fections? Illustrate its savings in this direction either graphically or by
means of an arithmetical illustration.
5. As you see the situation what were the general and underlying causes
which impelled the company to transform the bonus system?
6. One of the executives of the company was opposed to the removal of the
bonus upon the reduction of waste and its transferral to production,
saying that though it might increase production, it would also increase
waste which was more important. What reasons were there to support
his views? How do you account for the fact that, although the reduction
of waste was now not directly rewarded, the amount of waste was
reduced as well as production increased?
7. If the bonus on production decreased waste at the same time, was it
necessary to put a bonus on waste reduction in the beginning? Why or
why not?
8. Contrast the earlier bonus for the reduction of imperfections as regards
the probable reduction which each would effect in the amount of im-
perfect work; as regards economic gain or loss to the employer;
to the workman. Would it have been preferable to have used the
penalty for imperfect work instead of the bonus in the beginning? Why
or why not?
43
1
9. "This bonus was modified
•
so that the men with extremely high
output would not receive 'too high wages."" What constitutes "too
high wages"?
CASE 54
The handling of all lumber in the yard of a certain manufacturing
company was done by the workers at a fixed rate per thousand feet.
During the period of rising wage-rates-1919 and 1920-the men were
unable to make a weekly wage equal to the prevailing current rates.
They persistently asked for an increase in their rates but the superin-
tendent refused to raise the rates, guaranteeing instead that he would-
give an extra allowance sufficient to bring the weekly earnings up to the
average received by men doing the same grade of work in other depart-
ments in the plant who had received increases. There was considerable
friction because the paymaster insisted on figuring the weekly pay at
the authorized rates, but the superintendent always kept his word and
saw that the men received the extra pay. The wisdom of his policy was
seen when other departments had to cut their rates with the usual
troublesome consequences. In the department considered, the extra
bonus was discontinued with very much less friction.
QUESTIONS
1. Why did the superintendent adopt the policy he did? Do you believe
he was correct in so doing?
2. What would have happened had all department heads adopted the
same policy?
3. What policy of increases would you have recommended for the plant as
a whole during the years 1919 and 1920? Why?
CASE 55
ORIGINAL FIXATION OF PIECE-RATES
a) The Nummer Manufacturing Company, which had hitherto
been paying its employees on the time basis, established piece-rates
in its foundry by the following method. The rate-setters would ask
a man working on a large casting how long it would take him to finish
the job.
The man would set an estimate and the rate-setter would
fix a piece-rate for the job by multiplying the estimated time by the
prevailing local hourly rate. Thus if a man estimated that it would
take two hours and the prevailing rate was 40 cents an hour the piece-
rate would be 40X2=80 cents.
b) The Plumbpetre Company, in establishing piece-rates for the
first time, studied the total output of the men at the various jobs and
44
taking the hourly output of the best man and the prevailing local
rate as the basis, fixed a piece-rate for the job.
c) The X Y Z Company, in instituting piece-rates, took the hourly
output of its best men and increasing this by 15 per cent applied the
prevailing time-rates thus securing a piece-rate.
d) Another plant took the hourly output of the best man and
multiplied this by the prevailing hourly rate less 10 per cent.
QUESTIONS
1. How adequate are any of these methods in determining how long it
should take a man to do a given job? Compare the relative merits of
(a) with (b), (c), and (d).
2. Do you prefer the method used in (c) in determining how long a job
should take or that used in (b) and (d)? Why?
3. How can one determine how long it should take to do a job? What
considerations should enter into this determination?
4. "Piece-work rates are based upon output irrespective of time taken."
Do you agree or disagree? Why?
5. What are the relative merits of using the prevailing local rate and the
prevailing rate minus as factors in determining how much the piece-
rate should be?
6. How can the men make current earnings if they are paid less than prevail-
ing local rates for the time-factor used?
CASE 56
PIECE-RATES
a) The Buford Manufacturing Company pays its machine hands.
by the piece-rate system. They are paid only for the amount which
they actually produce. Therefore when work is not ready for them
at their machine or when the machine itself or the belting or shafting
is out of order the workmen are not paid. This naturally creates a
great deal of dissatisfaction, but the company defends its action on
the ground that it cannot be expected to pay for work which is not
produced.
b) The Link Belt Company also operates under the piece-work
system, but when the material is not ready for the workmen, etc.,
they are paid the straight day-wage for their occupation.
c) The employees of the Normal Shipyard of New York were able
to earn approximately 50 per cent more on piece-work than when on
day-work. When these men were held up because of material,
machinery, etc., they demanded, and the management granted,
payment for such lost time at one and one-half the hourly rates.
45
୮
QUESTIONS
1. Under (a), is the management correct in penalizing the men for delays
which may be due to the management?
2. Under (b), are not the men also penalized to some extent for delays
which are not their fault? How, and why?
3. Do men have any cause for complaint under (c)? Has the management
any cause of complaint?
4. What is the possible effect of (c) upon the amount of delays? Why?
5. Which of these methods do you prefer and why?
CASE 57
REVISION OF PIECE-RATES
Plant A in an eastern city has operated for a number of years
almost exclusively on piece-work. Prior to 1916 its rates were not
higher than those of other plants and if anything somewhat lower.
During the years from 1916 to 1920 while the day-wages in other
similar plants in the same city increased by at least 100 per cent and
in many cases even more due to the increased cost of living and the
relative shortage of labor, yet this company increased its piece-rates
only 65 per cent. The plant experienced no labor trouble during
the war, indulged in no "welfare" work, and in general the men seemed
very well satisfied with conditions.
QUESTIONS
1. How do you account for this concern's not being compelled to increase
its piece-rate more than it did? What possible generalizations may
this indicate?
2. In a period of falling prices do you think piece-rates in this plant would
decrease less rapidly than day-wages elsewhere or more rapidly? Why?
CASE 58
REVISION OF PIECE-RATES
A firm, X, manufacturing automobile tops, has practically all of
its work done on piece-rates. Its system is as follows: When any
percentage of workers are earning an appreciable amount more
weekly than the employees in other manufacturing plants, the piece-
rate is lowered so that the worker's weekly earnings at the then-
existing rates of output will but equal or slightly excel the prevailing
earnings. It is noticed that the output of the older employees does
not vary from week to week. The turnover for the plant as a whole
is approximately 400 per cent. If difficulty is found in securing new
46
។
men either to replace those that have left or to increase the size
of the working force, the piece-rate for these men is increased to a
point sufficient to attract the new men.
The management has lately become exercised over the amount
of its labor turnover and has established a splendid lunchroom where
meals are sold below cost; it has also equipped playgrounds and rest-
rooms and has engaged competent nurses to help the families of the
workers.
QUESTIONS
1. What are the apparent principles behind the policy of this company?
Do you approve of them? Why?
2. How do you account for the constant output of the old hands? Would
this apply to the new hands?
3. Will the men's earnings rise more than once and consequently will the
rates be cut more than once? Why and why not?
4. What do you think of the company's attempt to solve its turnover
problem? Why? What policy would you suggest?
CASE 59
REVISION OF PIECE-RATES
A concern that has 80 per cent of its work done under piece-rates
makes it a practice never to cut a rate unless the process has been ›
changed. It has decided that the introduction of a different type of
machine does constitute a change in process and, if more efficient, a
corresponding reduction in the piece-rate. If, however, a new
machine of the same general type replaces the old machine it is held
that no change has occurred. If materials are furnished the worker
with less irregularity and fewer stoppages occur, it is also considered
that no change in process has occurred. If, however, through a more
scientific planning of the work by the management, the worker
performs fewer movements in doing a given job, then it is regarded
as a change in process and a lower piece-rate is accordingly fixed.
QUESTION
1. Do you agree with the definition of a change in process which this
plant gives?
b) Scientific Management
CASE 60
SETTING OF STANDARD TIME
A
Under the system of scientific management, the time of each
elemental operation is set. To the average times of the best men
47
a firm added 40 per cent for fatigue to all hand-work times and
Io per cent to all machine-work times. On some especially tiring
jobs as high as 60 per cent was added.
QUESTIONS
1. Another firm doing similar work added for fatigue 10 per cent to machine
work but only 25 per cent for hand-work. Is there any means of
knowing which is the more nearly correct? If so, what is it? If not,
why not?
2. To what extent is fatigue uniform for different workmen? How does
it vary between individuals according to (a) physique, (b) habits, (c) work
previously done? Does this invalidate the use of a uniform allowance
for fatigue and if so to what extent?
3. "There is no possibility under scientific management of a too severe
task being set. . . . . The employers can use scientific management as
a method of speeding the worker up and sapping his strength." Which
of these statements do you agree with entirely? What is the bearing
of the fatigue allowance to this issue?
CASE 61
Mr. F. W. Taylor, in developing his system of the standard task
in the 80's and early 90's in steel mills, took as the standard the com-
bination of the minimum times (out of a number of observations) in
which the best men had performed the various elemental operations.
When the Tabor Manufacturing Company introduced scientific
management into its plant in 1900 under his supervision they took
as their standard not the best times of the best men but the modal
times of the best men.
QUESTIONS
1. Approximately what is the difference between the Taylor method and
the Tabor method?
2. Why in your opinion did Mr. Taylor select the standard which he did?
3. Why do you think the Tabor Company took the modal times rather
than the minimum times? Do you believe this policy was wise?
Why?
4. A prominent manufacturing company in one of its plants uses the
minimum times of the "fairly good" men as its standard. Still another
firm uses the minimum times of the "average" worker. How does
each of these methods differ from the early Taylor and Tabor
methods?
5. Had you been introducing scientific management and the standard task
in a machine shop in Chicago in 1910 which method would you have
used? Why? In 1918? Why? In 1921? Why?
48
•
CASE 62
SCIENTIFIC MANAGEMENT
MANAGEMENT
The F Company in introducing the Taylor system studied the
time which their best men took to perform elemental operations and
combined the average of each of their elemental times into standard
times for a job as a whole. They believed that they had thus
measured what a man could properly do and that men should be
held to this standard. The rates were set on the basis of these times
and were never changed save in so far as the processes themselves
were changed.
QUESTIONS
1. Does the fact that the best men could do the elemental operations in
these times demonstrate that the average employee could similarly
accomplish the operations? Why or why not?
2. Would it be practicable for one firm to hold its employees to the standard
of its best men; for many firms; for all firms? Why or why not?
3. Did the time-study at the time of the inauguration of the system indicate
the correct time in which the best men could do the job? Why? What
would be the influence of previous methods of wage-payment and wage-
policies upon the rate of output at the time of measurement? What
would be the influence of various methods of taking time-studies upon
the rate of output? Work out in detail.
4. When new time-studies were taken because of a change in process and
after the system had been in operation for some time, would the same
man tend to do a similar piece of work in more or less time than at the
original observation? Why? If he would do it in less time, would this
constitute a cutting of the rate? Why or why not?
CASE 63
The Xavier Manufacturing Company upon introducing scientific
management guaranteed its workers the prevailing hourly rates for
that occupation and provided that if they accomplished or exceeded
the standard set in the allotted time, they should receive a 35
per cent bonus on this base rate. A neighboring plant, Y, also intro-
duced scientific management but established guaranteed base rates
upon which bonuses were computed which were 20 per cent lower
than the prevailing local rates.
QUESTIONS
1. Which of these base rates do you think is (a) the more equitable, (b) the
more productive? Why? Might your answer differ for the "short
run" and the "long run"? Why? How?
49
2. Why did Plant Y use the base rates which it did?
3. If the base rate is to be the prevailing rate what burden does this throw
upon the management: (a) in times of rising wages, (b) in times of
falling wages?
4. What are prevailing wages? Can there be several wage-scales for the
same occupation within the same district? Give illustrations. Which
should the company use?
5. The Xavier plant some years after introducing the foregoing method
moved out into the suburbs from the center of the city. The whole
force moved with it. (a) Should it add an allowance sufficient to cover
the extra railroad fare? (b) Should it add an extra allowance to com-
pensate for the extra time spent in traveling?
6. It is sometimes said that scientific management removes the necessity
of unionism for the worker. In the light of the prevailing local rate
being used as the base rate, what is your opinion and why?
CASE 64
During the war, the Xavier Company mentioned in Case 63 added
a second bonus of 50 per cent of the time saved to the 35 per cent
bonus on standard time. This caused only a slight increase in out-
put. The average bonus paid in the shop was about 37 per cent or
only 2 per cent more than the 35 per cent bonus, which practically
everyone had hitherto attained. The management, however, did not
remove this bonus during the business depression of 1921.
QUESTIONS
1. What possible explanations are there for the failure of the bonus to call
forth increased output?
2. How do you account for the relatively steady output throughout the
year?
3. If a standard is set under scientific management should a workman be
greatly stimulated to exceed it? If so, why? If not, why not?
4. Would you have removed the bonus during 1921? Why or why not?
CASE 65
The Z Company, in introducing scientific management into its
machine shop, installed as its system of wage incentive the task-and-
bonus system whereby the worker was guaranteed day-wages if he
did not accomplish his task in the standard time set. If he did he
was paid a 35 per cent bonus on the sum of day-wages for the standard
time and if he completed the job in less time than the standard he
received the same amount of money, or wages for the standard time
plus 35 per cent.
50
QUESTIONS
1. What is the difference between this and the differential piece-rate
system?
2. Which would be more advantageous in the early days of scientific
management in a plant? In the later days? Why?
3. What incentive is there for a worker to exceed his standard when he
receives no more money than if he should barely attain it?
4. Why is a 35 per cent bonus given? Why not a 20 per cent bonus or
a 50 per cent bonus? Under what conditions might these different
bonuses be applied?
CASE 66
The Gantt system of task-work with bonus carried with it a
bonus for foremen in proportion to the number of men who attained
or exceeded the standard. A plant putting the task-work-with-
bonus system into effect gave the bonus to the foremen according
to the relation which the number of bonus hours earned by the work-
men under his supervision bore to the total number of standard hours
for the jobs done in the time worked.
QUESTIONS
1. What is the difference between the two methods outlined?
2. Why did the company use the plan it did?
3. Which plan do you approve of and why?
CASE 67
REVISION OF PIECE-RATES UNDER SCIENTIFIC MANAGEMENT
The Tabor Manufacturing Company furnishes instruction cards
to its employees for each job showing them the sequence of work and
the elemental times for the operations listed. It occasionally happens
that the clerks in the planning department in securing the total
standard time for the job make errors in the addition of these ele-
mental times. If the mistake is one by which the men are held to
a lower time than the proper one, the company will adjust the time
to the correct standard. If, moreover, the men are given more time
than is proper and if the mistake is not discovered until the man has
finished his work, then the company checks up the mistake and pays
the man the bonus based upon the inflated time allowance. The
same inflated time allowance is also applied to all workmen at the
same job in future years, the company believing that if they have
given the rate to one workman, they must give it to all others at the
same job.
t
51
+
It has happened a number of times that workmen have noticed
mistakes in their favor and have requested the management to reduce
the times to the proper amount.
QUESTIONS
1. Why do you think the Tabor Company follows the policy that it does?
Do you approve of their policy? Why?
2. If the management corrects mistakes in its favor should it not correct
mistakes in the man's favor? Why or why not?
3. Does the fact that the management refuses to lower the time, once a man
has finished a job, follow that it should continue to give the same time to
all who follow? Why or why not?
4. What administrative precautions does the adoption of such a policy ne-
cessitate?
c) Lack of Standardization
CASE 68
The Park Bank employing some 500 men had been having many
complaints over wage inequalities. The management decided to
They proceeded to have all the jobs in the bank carefully analyzed,
evaluated and classified and then settled upon a proper wage range
for each class of jobs. Upon comparing the actual wages being paid
with the proper wages as newly determined, they found many men
being underpaid and a considerable number overpaid. Rather than
reduce any wages they decided to let the overpaid men remain at
their present rates; the underpaid men were increased to the new
standards.
QUESTIONS
1. Do you approve of the action taken?
2. What would be the effect on the men who had been underpaid? On
those who had been overpaid?
3. How would you have handled the readjustment?
CASE 69
LACK OF STANDARDIZATION OF SALARIES
The Delta Company had an office force of about four hundred
employees. These employees were in a number of departments such
as sales, accounting, designing, etc. Each department head in the
office, as indeed each foreman in the shop, hired all the employees
for his department, and also made recommendations concerning
increases in salary and promotion. Normally each projected increase
52
had to be approved by the president of the company before it could
become effective, but due to the pressure thrown upon the organiza-
tion by the growth of war orders in 1916 and 1917, this prior approval
had been largely waived. Department heads, in order to secure a
proper staff, were allowed to fix such wages as they thought necessary
and to make such increases as were deemed essential to holding this
staff. As a result, the salaries for identical work were distinctly
higher in some departments than in others and often indeed within
a department there would be great discrepancies between the pay of
employees holding similar positions. Thus a stenographer in one
department was found to be receiving twenty-seven dollars a week
while a stenographer doing even less responsible work in another
department was being paid forty dollars a week. The head of one
section was being paid seventy dollars a week, while the head of a
still more important section was receiving only thirty-six dollars a
week. The wages of the newer employees were in general higher
than those of the older clerks. Considerable discontent existed among
the employees, and in consequence the president, in 1921, appointed
a committee of the executive staff to draw up a program for standardiz-
ing salaries.
QUESTIONS
1. On the basis of the facts given, outline the recommendations that you
would make for dealing with this problem.
2. Would your recommendations have been different in 1919 than in 1921?
If so, how so and why? If not, why not?
3. What light does this situation throw upon the general personnel policy
and organization of the company?
CASE 70
RELATIVE EARNINGS OF DIFFERENT OCCUPATIONS
A survey of ten hosiery mills in Philadelphia was made in 1919.
The survey showed that the relative earnings in the nine chief occupa-
tions varied greatly from mill to mill. The following table ranks
these in the order of their earnings in each mill.
The preceding table has shown the relative ranking of their
occupations. Table II shows the average amount actually received
every two weeks by the workers in the various occupations in each of
the mills correct to the nearest dollar.
¹ A Survey of Industrial Relations Including Recommendations Regarding the
Labor Policy in th Mills of the Full-fashioned Hosiery Manufacturers, Philadelphia.
By the Scott Company.
53
TABLE I
RANKING OF OCCUPATIONS IN EACH MILL ACCORDING TO THE AVERAGE EARNINGS
OF WORKERS IN THAT MILL

All
Rank by
Average
Earnings
Mills
Mill A Mill B
Mill C Mill D
Mill E Mill F
Mill G
Mill H
Mill I
Com-
bined
Footer Legger
Footer Footer
Footer Footer Footer
•
I.
2
• •
· •
3...
4...
5....
6.
4
7.....
8...
9.
•
•
•
Footer Legger
Legger
Legger Footer Legger Footer Legger Legger Footer Legger Legger Legger
Boarder Seamer | Boarder | Seamer Boarder Boarder Boarder Boarder Boarder Boarder
Seamer Boarder Mender | Boarder Mender Pairer Pairer Seamer Topper | Seamer
Topper Mender Topper Mender Looper Topper Seamer Mender Seamer Mender
Mender Topper Seamer Topper Topper Looper Looper Topper Looper Topper
Pairer Looper Looper Looper
Looper Seamer Winder Topper Looper Winder | Looper
Winder Pairer Winder Pairer Pairer Seamer Winder Winder | Pairer Pairer
Looper Winder Pairer Winder Winder Mender Mender | Pairer
Mender Winder
NOTE.-Mill J omitted because figures were furnished for only four of the above occupations.
TABLE II


Occupation Mill Mill Mill Mill Mill Mill
Mill Mill Mill Mill
All
A
B
C
D
E
F
G
H
I
J
Mills
Footer.
Legger.
•
•
$115 $59
$78 $109
$84
$69
$74
$96 $120
$84
$82
IOI
68
64 IIO
70
60
78
Boarder.
Seamer.
Mender
Topper.
Looper.
Pairer.
Winder.
73
: 94
7I
75
бо
45
47
45
47
47
• 0 •
35
•
•
•
• •
wwwww..com
47
27
46
29
26
29
32
30 38
39
24
26
543
56
56
46
48
45
37
31
38
23
31
37
32
30
38
30
29
26
32
38
30
28
27
36 32
28
26
32
34
29
30
26
22
27
28
30
37
20
26
19
27
30
25
26
25
25
27
26
29
28
26
QUESTIONS
1. Describe briefly the differences in relative ranking from mill to mill for
each of these occupations and show the most striking variations. Indi-
cate the variations in average amounts earned bi-weekly in each of the
occupations.
2. Why should these differences concern the manufacturer? If you were
the employer H, for example, would you be concerned? Why or why
not? Which is the more important, the relative variation in rank from
mill to mill or the variation in each occupation in the amounts actually
received?
3. What may be some of the possible causes of these differences? Outline
a plan of investigation whereby the mills could find out what were the
actual causes.
}
54
CASE 71
DIFFERENTIAL RATES FOR NEW MEN IN THE PLANT
The Tabor Manufacturing Company, which sets standard times
in which jobs should be completed, allows 50 per cent additional time
for new men during the first week in their employ, 30 per cent during
the second week and 10 per cent for the third week. This also applies
if they are moved to a new machine in the plant. Another company
(B) which also sets standard time and does similar work pays its men
day-wages for the first day or two while the company's system is
explained and after that they are given the same times and terms as
other men.
If a man does not come up to the standard within a short
time, he is either discharged or leaves voluntarily.
QUESTIONS
I. Which of these methods do you approve of in general? Why?
2. Is the Tabor payment good policy if a man moves to another machine?
Why?
3. The Tabor Company tends to set a higher standard of accomplishment
than the other plant mentioned. May this account for its more liberal
treatment of new employees? Why? How?
4. What will be the effect of the policy of Plant B upon the number of
novices who will present themselves for work? Upon the methods of
training used? Upon the men's willingness to be transferred from
machine to machine? Why?
d) Miscellaneous
CASE 72
In the thermometer department of a certain electric-stove plant
eight girls are employed. One of these girls, Miss M., is highly
skilled, being in fact the only person in the plant who knows how to
grade the tubing, blow the bulbs accurately, introduce the mercury,
and calibrate the thermometer. This girl has understood her strategic
position and has threatened to leave whenever affairs were not run
to her liking. She has complained that in comparison with the less
skilled girls in the department, she was not being paid enough in
consideration of her special proficiency. The management, on the
other hand, believed that production was unduly low in this depart-
ment and felt the need for inducing the girls to work harder. The
girls were paid a weekly wage.
The following plan has now been adopted. Miss M. has been
given complete control of the production of thermometers. She
55
1
receives a stipulated amount per thousand thermometers produced,
out of which amount she must pay the other workers; she can hire
and discharge the girls under her and she determines the wage-rates.
She has placed all the girls on piece-work and production has increased
more than 50 per cent. All the girls are earning more than formerly
and Miss M. is earning almost twice as much as she did.
QUESTIONS
1. Do you think the method adopted is a good one?
2. What alternatives do you think would have been desirable?
CASE 73
In the drill-press department of a shop building linotype machines
there are three radial-drill-press hands who work on the heavy castings
for the base of the machine. The three do precisely the same work;
the operations are uniform from casting to casting; all the work is
paid for at piece-rates. Because of the weight of the castings, each
of these drill-press hands is allowed a helper who assists in moving and
setting up the work. Some of the holes that have been drilled in each
casting must be reamed and some must be tapped. Obviously it is
to the advantage of the drill-press hand if he can have his helper do
the reaming and tapping, permitting him—the operative--to proceed
at once to drilling the next piece. The management, however, has
not designated the reaming and tapping as helper's duties, partly
because this would make a very difficult job for the helper if added
to his other duties, and partly because the union objects that the
operations are machinist's work and are not to be given to a helper.
(While the company does not officially recognize the union, it is not
anxious to furnish any cause for complaint since more than half
the machinists employed carry cards.)
During the summer of 1920 persistent complaint was made by
two of the three drill-press-hands because their helpers did almost no
work beyond moving the castings, whereas the helper of the third was
doing the reaming and tapping, thus enabling this operative to make
much higher earnings. By indirect means the management dis-
covered that this third machinist had, with an eye to increased earn-
ings, instituted a piece-work system for the helper. Of the seventy
cents which the machinist received for each piece, ten cents was
promised to the helper. The management felt that the arrange-
ment was helping production and accordingly permitted it to continue,
although unofficially. It was even informally suggested to the other
1
56
•
•
two machinists that perhaps the trouble, was that they did not treat
their helpers as well as did the first.
QUESTIONS
1. What do you think of the management's action?
2. Would you have changed the method of paying helpers?
3. Would you have enforced the union demand that the helpers should
handle no tools?
4. Would you have had the drill-press hands do their own reaming and
tapping, letting the drill press stand idle in the meantime?
CASE 74
The Ellwood Corporation paid its employees every Saturday
afternoon at the close of the day. The pay line was long and fre-
quently men would be compelled to wait in line for fifteen minutes.
As a distinct premium was thus placed upon getting to the pay window
among the firstcomers, men would quit work, clean up, and prepare
to be off some minutes before the whistle. In order to meet the
difficulty the corporation issued orders that the plant would officially
close ten minutes early on Saturday to allow time for paying. There
· was little noticeable effect; men still prepared before the whistle and
then dashed. The management then ordered that men would be
paid in fixed order according to the serial order of their clock numbers.
This plan was effective in eliminating most of the scramble and rush,
but aroused a large amount of resentment on the part of those who
were forced always to be near the end of the pay line.
QUESTIONS
1. Are these detailed matters worthy of the attention of the labor manager?
2. What do you think of the methods used?
3. What are your suggestions for improvement?
CASE 75
BONUSES TO SALESMEN
The Libco Company, manufacturing conveyors and elevators,
had been paying its salesmen straight salaries, depending upon the
hope of promotions and increases to get the best efforts from the
selling force. In 1916 it introduced a bonus system in two of its
branch offices. The system adopted provided for the payment of
the former straight salary and a proportionate bonus if the amount
sold exceeded the average amount sold previously by the company's
57
salesmen plus an additional bonus proportional according to the
amount of profit derived by the company from the goods sold by the
salesmen. After one year's trial it was found that there had been
only a slight increase in sales in the two districts and the plan was
discontinued.
The general sales manager declared that the defects of the plan
were: (1) The office expense in computing the bonuses was heavy
and was not justified by the increase in sales. (2) The salesmen could
not properly be given full credit for selling the goods, since in many
instances a sale required such especially technical knowledge that
engineers from the main plant would have to be sent out to consult
with the customer. (3) Districts varied so greatly that high and low
sales might be due to the nature of the district rather than to the
nature of the man.
The salesmen were given a slight increase in salary and since then
the sales force of the company has been on the straight-salary system.
QUESTIONS
1. Was the company wise in trying out a bonus system for its salesmen?
Why?
2. What do you think of the merits of the bonus system used? Explain.
Suggest other systems which might have been used and their relative
advantages and disadvantages.
3. Was the company wise in discontinuing the bonus when it did? Why?
Should it have tried the plan out longer? In more sales districts?
Why?
4. To what extent were the objections advanced by the sales manager to
the plan valid? To what extent would they have applied to any bonus
system?
5. Would the case for a salesman's bonus have been any stronger had the
product been tea, men's clothes, small castings, cream separators,
gasoline engines, automatic gear-cutters?
6. What do you think of the straight-salary system of payment? Under
what conditions would it furnish a high degree of incentive and under
what conditions a low degree of incentive?
CASE 76¹
The workers in the men's clothing industry in Chicago were
discontented because of various conditions in the industry. To reduce
this discontent, some of the companies increased wages 10 per cent.
Company X posted a notice that on July 1 each worker who had
I
Taken from Science and Common Sense in Working with Men by Walter Dill
Scott and M. H. S. Hayes. Ronald Press, 1921. Pp. 128-30.
58
remained loyal to the firm until June 13 would receive "a specia
extra-pay envelope." This promise failed to change the attitude of
the workers. A few weeks after the posting of this notice the drive
was on for the sale of Liberty bonds and the president of Company X
purchased $34,000 worth of bonds as a gift to his employees. Each
worker was given a coupon good for his share of the $34,000 worth of
bonds. The workmen manifested no appreciation of this gift. On
July 1 each worker received a special extra-pay envelope containing
a sum of money equal to that which he had received on the second
week of May-a typical week. This generosity resulted in expression
of discontent among the rank and file of the workers. The president
of the company was much disappointed by the failure of his program
and called into conference on the subject the local labor leader.
The following is the substance of the conversation between the
president of Company X and the labor leader:
President X: I can't understand the lack of appreciation of my men.
I gave them $34,000 worth of Liberty bonds and a special extra-pay envelope
of a full week's wages. The union agreement has now put all the firms on
an equal wage basis. Although I did not increase wages 10 per cent for
the period preceding the union agreement, I have given my men more than
any other company by the extra-pay envelope and also the Liberty bonds.
I can't see what more they want.
Labor Leader: Yes, Mr. X, you have done all you say and your people
are not contented as the people are at the other houses. They wanted
the 10 per cent and felt that they had deserved it.
President X: No, I did not give them the 10 per cent but I did give
the extra-pay envelope and the Liberty bonds which amounted to much
more than the 10 per cent.
Labor Leader: Yes, I have figured it up and you gave them in extra
pay and bonds somewhat over $10,000 more than they would have received
by the increase they ask. But that is not what they wanted. They do
not want the gift of an extra-pay envelope and of the bonds, but they do
want the 10 per cent, even if it is less than the extra pay and the bonds. I
believe they would be willing to refund the $34,000 worth of bonds if you
would give them the $24,000 in what they regard as earned wages.
President X: Very well. I will gladly make the exchange, for I shall
thereby gain $10,000.
Labor Leader: I think the discontent will be greatly reduced by the
exchange. I will take it up with the people at once.
The proposition was presented to the workers and was accepted
enthusiastically, even though it entailed a recognized monetary loss
to them of $10,000.
59
3. Conditions of Work, Shop Rules, Safety, Health, Welfare, etc.
CASE 77
During the war the Manley Electric Company was unable to
get enough men to work as punch-press operators and accordingly
decided to employ some women. The old punch-press department
was divided into two sections in order that the men and girls might
be more or less separated, and a forewoman was placed over the new
section. The foreman, somewhat opposed from the beginning to the
employment of women, complained that the new plan was increasingly
unsatisfactory. Discipline was less rigid, production was interfered
with by frequent visiting back and forth between the two sections of
the department, turnover was high, and there was a noticeable under-
current of dissatisfaction in the department. The management con-
sidered the several alternative courses open and decided, with con-
siderable hesitancy, to try the plan defended by the labor manager,
namely, a return to a unit department, employing men and women
indiscriminately, having them work side by side throughout the
department, and doing away with all suggestion of a desire to keep
them apart. The foreman would have authority over the entire
department and would be assisted by a forewoman. Under this
new plan it was found that turnover dropped, production increased,
and a better spirit prevailed.
QUESTIONS
1. Do you think the change was advisable?
2. What objections do you see to the plan?
3. Do you think it would be desirable as a general rule to have men and
women work together in a factory?
CASE 77A
PLANT RULES IN THE EMPLOYMENT OF WOMEN
The D Steel Company has an office force of approximately four
hundred. It had been the rule for over twenty years that no women
should be employed. The death in 1915 of the chairman of the board
of directors, one of the founders of the business, who had caused the
adoption of this rule, and the growing labor shortage resulted in the
company's changing its policy and employing many women in 1916,
1917, and 1918 to fill the vacancies. By 1919 practically 40 per cent
of the office force were women. These women as well as the men were
hired by the heads of the various departments. They were almost
1
60
wholly unmarried and predominantly of the years sixteen to twenty-
one with very few over twenty-five.
The discipline of the office rapidly deteriorated. Girls were
frequently absent and asked their heads for many favors as regards
such matters as time off, etc. The average output of stenographers,
typists, dictaphone operators, and clerks fell off noticeably. This
applied to men as well as to women although not to the same degree.
Old clerical employees began to fall off in their work also.
The business depression of 1921 caused the firm to reduce their
office force by nearly a half. Seventy-five per cent of those who were
laid off were women who now came to form less than 10 per cent of
the office force. The management is considering the readoption of the
policy of refusing to employ any more women.
QUESTIONS
1. If you were the general manager of the company would you employ any
more women? Why or why not?
2. Are there any indications as to whether the internal administration of the
company could be improved? If so, what are they? How could the
administration be improved?
CASE 78
The X Machine Shop of Philadelphia employed amongst its 450
employees several colored workmen in the capacity of movemen and
helpers. The workman at one of the milling machines left the com-
pany and the superintendent placed one of the colored helpers at
the machine. The next day all of the white workingmen, although
not belonging to a union, walked out in protest. The management,
therefore, took the colored workman from the machine and told him
that he must return to his old position of helper.
QUESTIONS
1. Was the management (a) justified, (b) judicious in giving the colored
workman the job at the milling machine?
2. Were the workmen justified in protesting? Why or why not?
3. Was the management correct in yielding to the protest of the workmen ?
Why or why not?
4. In what ways might the action of the management have been different
had the plant been located in (a) Atlanta, Georgia; (b) Boston, Massa-
chusetts ?
5. Would there probably have been as much protest against the promotion
of the negroes had the plant been an abattoir? Why?
бл
6.- Might actions of the management have differed had there been (a) a great
surplus of labor, (b) a great shortage of labor? How?
CASE 79
THE RELATIVE STATUS OF OFFICE EMPLOYEES AND
SHOP WORKMEN
The Blank Manufacturing Company has a shop force of approxi-
mately seven hundred, and an office force of three hundred. The
former are naturally paid on the hourly and the latter on the salary
basis. There is a cafeteria for the office help which is not open to the
shop workers. When office employees lose a few days because of
illness, their salary continues until they return. The shop men, on
the other hand, lose their pay for every hour's work which they miss.
The office workers moreover are allowed annually two weeks' vacation
with pay which does not apply to the shop. When the business
depression of 1921 compelled a reduction in the force, the clerks and
other office workers who were laid off were given two weeks extra
pay. The shop employees however who were laid off received only
the back pay already due them.
QUESTIONS
1. How do you account for the different treatment accorded the two groups
of workers?
2. How would a shop worker be paid for overtime? an office worker?
Why? To what extent does this compensate for the different treatment
described above?
3. Do you approve or disapprove of the different treatment of the two
classes as respects (a) cafeteria, (b) illness, (c) vacation, (d) lay-offs?
Why?
4. Assuming that there should be a greater equality of treatment, should this
equality consist in having the office force work under the conditions
now given to the shop workers, or in having the shop workers granted the
conditions which the office force now possess? Why?
CASE 80
The management of a machine shop in Pittsburgh found that
production in the shop practically stopped ten minutes before the
noon hour and again ten minutes before closing time in the afternoon.
Bulletins were posted asking the men to wait until after the whistle
to wash, pointing out that they had a short work-day (eight hours)
and a whole hour for lunch and that at present they wasted about
5 per cent of working-time through stopping to "clean up" before
62
quitting time. The practice continued, however, and the company
issued an absolute order that any man who was found stopping work
before the whistle blew would be immediately discharged. The order
accomplished its immediate purpose. Machines continued running
until the whistle blew and no men had to be discharged. The feeling
was general on the part of foremen, however, that total daily produc-
tion fell off considerably more than the 5 per cent that the order had
aimed to eliminate. The workmen were all paid an hourly rate;
the work was largely repair and special tasks so that accurate records
of output were impossible.
QUESTIONS
1. Did the management act wisely?
2. What would you do to meet this problem?
3. Comment on the more fundamental problem of the company which
makes possible the existence of this particular problem.
CASE 81
In the automatic-screw department of the company discussed in
Case 81 relations between management and men were somewhat
different from those existing in other departments. When the order
was posted threatening discharge for any man quitting work before
the whistle blew, the men in this department laughed and proceeded
to forget the order. The foreman suddenly found that his duties
always seemed to require that he be somewhere else in the plant
than in his own department during the last part of the morning and
afternoon. Human relations in this department are further illustrated
by the following incident. At about 11:45 one morning the foreman
walked about his department and "tipped off" each man that
"Baldwin [the general superintendent] is right out here in Depart-
ment H." And that morning automatic-screw machines were still
running at 11:59.
QUESTIONS
1. Should a foreman let himself be one of the men in this way?
2. Is he playing traitor to the management that trusts him? Or, since he
really gets more out of the workers (in this case at least), is he "double-
crossing" the men?
CASE 82
SAFETY
At one of the coke plants of the United States Steel Corporation
it was found that there had been a marked increase in the time required
63
{
1
to unload coal cars. No working conditions had been changed and
the work was being done by the same men under the same foreman.
An expert who was sent to study the work and discover the cause of
the lost time, found that the men (all foreigners) while in and under
the cars that were being unloaded were constantly looking out of the
open end of the building toward a gravity track down which the loaded
cars came controlled only by a brakeman. Inquiry showed that the
cars had formerly been brought in by an engine; later the plan was
adopted of letting the cars coast in. On several occasions the cars
had gotten beyond the control of the brakeman and nearly caught
the unloading gang.
The engine was reinstated for running the cars into the building
and work soon returned to the old standards.
QUESTIONS
1. Was this a personnel problem?
2. Should the problem ever have arisen? How would you arrange to take
care of such troubles in the future?
Welfare and Service
CASE 83
INSURANCE AGAINST ACCIDENT, ILLNESS, DEATH; PENSIONS
FOR OLD AGE
The Philadelphia Rapid Transit Company has a co-operative
welfare association to which all employees who have been employed
for six months or over are eligible and in which over 99 per cent of
those eligible are members. Each member pays $1.00 a month,
deducted from his wages at his request, to which the company adds
a contribution to the general fund of $10,000 a month, a sum sub-
stantially equal to the contributions of the workmen. All members
disabled because of sickness or injury are paid a sick benefit of $1.50
a day with these provisions: (1) that no allowance shall be made for
the first seven days of disability, (2) that the total liability of the
association for benefits in any one case is not to exceed $150.
Members of the association of either sex who (1) shall have been
in the service of the Philadelphia Rapid Transit Company for at least
twenty-five years, (2) shall have reached the age of sixty-five years,
and (3) whose physical or mental condition is such that they are
no longer able to discharge the duties required of them, shall be
eligible for a pension of $40 per month.
1
64
The Company provides in addition a $1,000 life insurance policy
to all members, which is also a protection against total and permanent
disability arising either from injury or from disease, provided that it
originated after the granting of the policy.
The association is managed by a joint board, one-half of whom
are elected by the employees and one-half appointed by the company.
QUESTIONS
1. What are the merits to the company of such a plan which would justify
the expenditure of such a sum of money?
2. Should a workman have to be in the employ of the company six
months to be eligible for membership in the association? Why or
why not?
3. Why should workmen suffering from accidents be paid this benefit?
Are they not provided for under the workmen's compensation laws?
4. Should a waiting period of seven days be provided during which the
disabled person is eligible for payment? Why or why not? The
Curtis Publishing Company provides that workers may be paid for all
the days of their disability beginning with the first, provided that they
have been disabled at least a week in all. What is the difference between
this plan and that of the Philadelphia Rapid Transit Company. Which
do you prefer and why?
5. The Curtis Publishing Company provides that the benefits granted
shall be 50 per cent of the daily pay. Do you believe this is preferable
to $1.50 flat benefit of the P.R.T.? Why?
6. Should the benefits be limited to one hundred days? Why or why not?
Should it be for less than two hundred days?
7. Should a worker who has been ill from two different causes or has been
injured twice, be eligible for benefits, although his two periods of dis-
ability total more than one hundred days in a year, in two years?
Would he be eligible if he suffered from the same disease twice and
the total amount of the days of disability exceeded one hundred?
8. Should a member suffering from venereal disease receive benefits?
9. The Curtis Publishing Company gives life insurance graded according
to seniority. Employees who have been in the employ of the company
over three months and less than a year are given $500 of insurance.
The amount increases by $100 with every year of continuous service
until those who have been employed fifteen years or more are given
the maximum protection of $2,000. Do you favor this plan or the
flat provision of $1,000 as made by the P.R.T.? Why? The P.R.T.
grants choices of runs by seniority and retains men in order of their
seniority. To what extent may this offset the provision of a uniform
sum of insurance?
1
65
10. Why should the prerequisites for pensions be so numerous? Why
not provide that anyone who was sixty-five who was in the employ of the
company, or who had worked twenty-five years for the company, or
who was unable to work longer should be eligible for a pension? Why
not use any of these? Why all? Investigate the results of police
and firemen's pension funds.
$
11. What effect will such a policy of insurance have upon the medical and
health policy of the company and why?
12. Should the certification of any physician be accepted as proof of illness
or should that of the company physician or nurse be required? Why?
13. The insurance plan of a machine shop provided that all the trustees
of the fund should be appointed by the president of the company. Do
you prefer this plan of administration to that of the P.R.T.? Why?
Should management have any representatives on such a body? Why?
14. The P.R.T. advises the trustees of the welfare association not to invest
a large percentage of the funds in P.R.T. securities. What is the
reason for this position? Do you agree with it? Why?
15. What is likely to be the effect of such a plan upon (a) unionization,
(b) strikes? Why? Of the Curtis plan as described in Question 9 ?
.4 Regularization of Employment
CASE 84
In the survey of ten Philadelphia hosiery mills which has been
referred to, an investigation was made of the pay-rolls for three
months to determine the relative variations in each man's earnings
from pay-period to pay-period. The following table shows the
average deviation of the bi-weekly earnings of the various men in
each group from the arithmetic average of his earnings during the
three months as a whole.
TABLE III-PART 1
UNCERTAINTY OF EARNINGS FOR VARIOUS OCCUPATIONAL GROUPS

Occupation
Footer.
Legger.
Boarder.
Seamer.
Mender.
Topper.
Looper.
Pairer.
Winder..
•
•
4.17
•
• •
• •
•
•
•
5.25
3.61
6.34 2.87 4.63
Mill A Mill B | Mill C | Mill D | Mill E | Mill F | Mill G
$9.21 $12.44$ 7.29 $10.27 $ 6.98$ 7.19 $11.61
7.20 9.46 6.66 8.21 7.44 7.62 10.35
6.51
5.67 6.59
6.62 3.84 5.87
5.43
4.88
3.73 3.30
3.02
4.13
3.09 2.37
•
4.22
6.86 3.09 3.72
4.16
2.84
4.26
•
3.02
6.70 2.17 4.24
4. IO
2.41
3.07
3.52 4.74 4.74 3.72 2.38
3.31
2.63
3.30 2.28 3.48
3.55 2.53
2.33 2.34
66
TABLE III-PART 2

OCCUPATION
MILL H
MILL I
MILL J
No. Emp.
ALL MILLS COMBINED
Uncertainty
of Earnings
$ 6.86
$21.94
$10.01
§ 140
$7.46
5.99
7.97
13.98
293
8.10
4.24
6.01
4.59
5.28
8.62
6.40
157
4.08
•
•
•
5.26
4.64
118
3.71
2 63
7.28
260
3.89
• •
4.62
5.76
171
3.67
2.44
2.83
2.60
67
3.09
•
1.73
3.83
105
2.82
►
Footer..
Legger..
Boarder.
Seamer.
Mender.
Topper.
Looper.
Pairer.
Winder..
•
• •
• •
The preceding table has given a general picture of the degree of
uncertainty and irregularity of each man's earnings from week to
week. The following table shows the standing of each mill as com-
pared to the average uncertainty for the mills as a whole.
TABLE IV
PERCENTAGE OF EMPLOYEES IN EACH OCCUPATIONAL GROUP HAVING A GREATER
UNCERTAINTY OF EARNINGS THAN THE AVERAGE FOR
ALL MILLS COMBINED

Mill
A
B
C D
E F G H
I J
All Mills
Combined
•
Footer.
Legger.
Boarder.
•
Seamer.
Mender.
131
75% 85% 44%87% 39% 46% 66% 40% 100% 83%
75 15 50 35 13 I 69 22
57%
36 183
39
12
80
•
·
150 17 30
22
•
75 40
32
•
•
•
57 100 22
150 25 30
14 180
67
89 18 20
33 30 14 66
87
66
33
36
Topper.
Looper.
Pairer.
Winder.
31
80
•
40
100
50
9 33 47
85 50 9
158 33 33
20 21
38 91 23 29 36 17 143 ΙΟ
18 28
57
60 143 33
100
34
100
38
30 50
40
40
28
QUESTIONS
1. What is the significance of these statistics?
2. Is there anything to cause the employees of the various mills concern
about the uncertainty of earnings? If so, what is it? If not, why not?
3. Do these statistics throw any light upon the problems that workmen
and their families are facing?
4. Does the fact that the average uncertainty of earnings in the case of
winders is $2.82 per pay-period while that of footers is $7.46 indicate
that the pay of the latter is nearly three times as irregular as that of the
former? Why or why not?
67
5. Point out the differences in irregularity (a) between occupations (consult
in this connection Table II), (b) between mills.
6. What possible reasons for the irregularities suggest themselves? How
would you propose going about determining what the real causes were?
Assuming the possible causes you have outlined are the actual causes, in
what ways might they be remedied ?
CASE 85
The Dennison Tag Company found that it was hiring large
numbers of men in October and November to make up Christmas
cards and labels who would be discharged when the holidays were
over. Not only was there a high turnover cost but a large part of
the plant was largely idle the rest of the year.
QUESTIONS
1. What methods would you recommend to reduce these costs ?
CASE 86
A company had three divisions-one doing work that was almost
exclusively hand work; another doing work that was partly machine
and partly hand work; and the third division doing work almost
exclusively with automatic machinery, where one workman tended
from fifteen to twenty machines and the labor cost was a very small
fraction of the production cost. This company had just been through
periods of maximum production and then of minimum production
caused by business depression. The board of directors met together
and decided that it was important for them to determine upon some
policy for the purchase of facilities in the future. They decided that
they would buy only enough facilities to meet the normal minimum
output, trusting to overtime when business conditions were normal
and overtime and night work when maximum production was needed.
QUESTIONS
1. What do you think of this decision?
2. Should the same policy prevail in all three divisions?
3. Do you think this problem is at all a personnel problem? If so, why?
If not, why not?
CASE 87
A company is engaged in the manufacture of fire-crackers. This
product is, therefore, wanted in large amounts at the 4th of July in
the North and Christmas in the South, but hardly called for at
68
રૈ
all at other times. The labor needed to produce fire-crackers must be
highly skilled, but so few concerns are engaged in fire-cracker pro-
duction that skilled fire-cracker workers are not available on the
market and must be trained by the company. After studying the
situation carefully, the company decided that it would shut down all
except a small skeleton crew of foremen, group leaders, and one or
two operators in each department after the 4th of July and Christmas
demand was made; then open up a month or more before the demand
in production came, on an exclusively training basis, and have one
month to train employees for the seasonal production.
QUESTIONS
1. What do you think of this way out?
2. Can you suggest anything better?
3. Do you think this is a personnel problem? If so, why? If not,
why not?
5. Hours (Omitted)
2
69
PART IV
JOINT RELATIONS WITH WORKERS
CASE 88
The piece-work checkers in a large shipyard whose employees
are 90 per cent unionized form a union and ask to be recognized by
the company. The president of the company refuses, declaring that
it would expose the company to fraud to have union men checking
the amount of work that other union men did. The president there-
fore gives orders that all present checkers should be discharged. The
shipyard unions protest and threaten a strike and the president
reinstates the checkers and permits their organization into a union.
CASE 89
WAGES-DEALING WITH STRIKES
A number of hosiery mills in an eastern city announced a cut of
approximately 15 per cent in wages in January, 1921. The employees
of these mills organized in the United Textile Workers refused to
accept the cut and went out on strike. There were fourteen other
hosiery mills in the city which had agreements with the union and
which did not cut wages. These plants continued running and the
employees contributed 25 per cent of their wages in benefits to those
out on strike. Moreover, these plants, since they were running,
secured practically all the fresh orders so that although industry as
a whole was somewhat dull they began to run overtime and soon to
put on night-shifts. They hired for these night-shifts strikers from
the other mills.
The strike wore on though the winter and spring with the families
of the strikers well protected because of strike benefits and night-
shift earnings. The summer came and with it a still further increase
in business (for the fourteen mills) to supply the fall market. Early
in August the manufacturers of the mills on strike declared open
shop for their plants and said if the men came back they must come
back as individuals and not as members of a recognized union. The
men did not come back and the management was unsuccessful in
getting competent men to take their place. By October first the rush
1
70
5
4
for fall production would have passed and the companies, hesitating
what to do, asked the advice of a manager who had been successful
in dealing with labor and he advised them to open their mills under
individual contract at a wage several cents above the union scale
which they had been trying to lower. The manufacturers demurred
for a time but finally agreed to follow his advice.
QUESTIONS
1. What steps, if any, should the firms have taken before trying to force the
wage-cut which they did not take and why?
2.
Why was the continuation of the strike costly to the manufacturers?
3. Why did the adviser recommend a wage higher than the union scale?
Under what conditions might it have been, possible to reopen at the
union scale itself?
4. Are there any indications that the owners of the mills on strike should
have faced the situation earlier? If so what are they and why?
5. Had you been a hosiery manufacturer would you have followed the advice
given? If so, why? If not, why not? If the latter, what other course
would you have taken and why?
CASE 90
A large clothing house that had built up a profitable business in
an eastern city and had kept the unions from getting a foothold in
its factory, found in 1918 and 1919 that the unions were getting
stronger in both the men's and women's clothing industry. Although
this particular plant was still unorganized, the unions were successful
in organizing in other centers and had compelled the manufacturers
there to recognize and deal with them. Several clothing firms in the
same city, moreover, found that their employees were joining the
union in large numbers. The firm realized that unless something was
done, their employees would be organized in a few months or at most
a year. They therefore went to a firm of personnel consultants, told
them that they wanted to prevent the union from getting a foothold
and that they wanted the personnel consultants to instal a personnel
and welfare system in the plant, which among other things would
provide for: (a) more careful selection and training of workers, (b)
review by employment manager of discharges, (c) wage-scale gradu-
ated according to efficiency, (d) establishment of safety and sanitary
standards, (e) service features such as lunchrooms, etc.
The personnel consultants considered the matter for a few days
and then advised the clothing house first to recognize collective
bargaining with its employees and with the union officially should it
71
come to represent its workmen. After that they would be glad to
introduce a scientific personnel system into its plant. The clothing
house did not follow this advice and turned to others for help.
QUESTIONS
1. Why did the firm expect such a personnel system to head off unionism?
Are the two inconsistent? Are they generally associated in practice?
Why?
2. Were the personnel consultants right in their attitude? Why?
3. Had the firm asked their general manager to put in such a personnel
system, would he have been correct in making a similar reply? Why?
4. What is the test of professional spirit and standards as distinguished
from ordinary business standards? Should the two be brought into
harmony? If so, why and how?
CASE 91
Southworth & Bruce, a large department store in a western city.
patronized chiefly by workingmen, are asked to join an employers'
association formed for the purpose of abolishing the closed shop and
doing away with collective agreement with the unions which are very
strong. The owner agrees and becomes a leading figure in the associa-
tion and is active in the attacks made upon the unions. The unions in
retaliation place Southworth & Bruce on the "unfair" list and institute
through their press and in their meetings an active campaign against
the store. The gross sales decrease 25 per cent during the two follow-
ing months and the personnel adviser to the company recommends
that the store resign from the employer's association. The owner,
after consideration, decides to stay in the association, but retires from
the executive committee.
QUESTIONS
1. Should the owner have taken such an active part in the employees
association ?
2. Was the final decision of the owner correct? Why or why not?
1
72
PART V
THE ADMINISTRATION OF PERSONNEL WORK
CASE 92
The following incident occurred in one of the best-known and
most successful industrial establishments in the country. An old
employee, John Bauer, had progressed after some years of service to
the position of guard at the main office entrance. One day he
dropped a suggestion in the newly adopted "suggestion box." He
proposed that no employee should be permitted to leave the company
without first having an interview. The next day a notice on the plant
bulletin board, signed by the president of the company, announced
that after the first of the following month no employee could draw
his final pay without first having been interviewed by John Bauer,
whose office was to be located in Room 403. There was no mistake.
The president had seen the suggestion, liked it, and taken the action
announced.
QUESTIONS
1. What possible advantages are there in the action taken?
2 What would be the effect on other workers?
On the efficiency of the organization?
CASE 93
On minor executives?
In a factory with several production divisions, it was decided that
the personnel work should not be centralized exclusively in the employ-
ment and personnel division but that each producing division should
have a worker responsible for the handling of the detail personnel
problems that arose within the division. As a start in this direction,
it was decided to have a specialist in each division prepare the person-
nel statistics so that the division superintendent should be in a position
to know himself about the earning power, ability, length of service,
working conditions, etc., of each of his men. It was also decided
that a woman specialist should be put in each division in order that
she could handle directly the personnel problems of women. In
addition to keeping the records, she would be responsible for calling
the division superintendent's attention to any case where her records
73
showed that the personnel situation required action or where there
was an opportunity for improvement in some matter of personnel.
It was decided that there should be no men personnel specialists in
the divisions and that the women specialists should be responsible
directly to the division superintendents. The division superintendent
was to remain the head of the division, but the planning and mechani-
cal functions should be largely cared for by others so he could give
his primary attention to the personnel problems.
Members of the employment department objected on the ground
that there should be a personnel expert in charge of the men as well
as the women. They believed that there should be a centralized
personnel division and that the women experts should be on the
pay-roll and directly responsible to the personnel division, as on no
other ground could a centralized supervision of personnel be main-
tained. The general manager of the company decided against the
personnel department.
QUESTIONS
1. What do you think of the decision of the manager?
2. If you were the head of the personnel division, what action would you
take?

Gaylord Bros.
Makers
Syracuse N. Y.
PAT. JAN. 21, 1908

wils
658 D746
UNIVERSITY OF MINNESOTA
Douglas, Paul Howard, 1892-
Cases and problems in personnel administ
3 1951 002 132 181 W
WILSON
ANNEX
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A4 Page 6543210
A4 Page 6543210
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MEMORIAL DRIVE, ROCHESTER, NEW YORK 14623
RIT ALPHANUMERIC RESOLUTION TEST OBJECT, RT-1-71
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ROCHESTER INSTITUTE OF TECHNOLOGY, ONE LOMB
PRODUCED BY GRAPHIC ARTS RESEARCH CENTER