It is possible to give many illustrations of this sort, but not desirable, for our object is to indicate the laws that should be applied, rather than to solve specific problems. The student of cost-analysis engineering will derive his greatest stimulus from applying the laws to specific cases that come under his own observations.
Prompt Reward. Most men believe in Heaven, and many believe in Hell; but few are greatly affected in their action by the hope of the one or the fear of the other. Any reward or punishment that is remote in the time of its application, has a relatively faint influence in determining the average man's conduct. To be most effective, the reward or punishment must follow swiftly upon the act. Hence a managerial policy that may be otherwise good is likely to fail if there is not a prompt reward for excellence. All profit-sharing systems have failed, principally because of failure to recognize the necessity of prompt reward, as well as because of failure to recognize the necessity of individual incentive. The lower the scale of intelligence, the more prompt should be the reward. A common laborer should receive at least a statement of what he has earned every day. If, in the morning, he receives a card stating that he earned $2.10 the previous day, he will go at his task with a vim, hoping to do better. But if he does not know what he has earned until the end of a week, his imagination is not apt to be vivid enough to spur him to do his best.
One contractor, known to the authors, has a large blackboard on which the hourly record of his brickmasons is chalked up. He has found that this constant record of where they stand in the day's race is a splendid stimulus.
Sufficient Reward. When a man produces more than has been his custom, he feels entitled to a very large percentage of his increased output. His sense of justice is keen on this matter, and rightly so. It is true that he is not entitled to all the increase, for his employer may have provided him with machines or tools of a better kind, for which payment must ultimately be made. Moreover, more rapid work with any machine means more rapid wearing-out of its parts, and a consequent expense to the employer. Finally, the employer who has used his brains to devise ways of increasing the output of the employees is entitled to a very substantial reward. No one begrudges Thomas Edison his wealth. He has earned it by virtue of his inventions. In like manner, every man should be richly rewarded for every labor-saving machine or method which he creates or which he applies. However, employers are prone to try to take too large a part of the profit effected by an introduction of a system of unit-payment for work done.
Mr. Fred W. Taylor says that a workman should receive 30 to 100 per cent increase in wages upon the introduction of a piece-rate or bonus system of payment. Mr. Halsey says that the workman should receive one-third of increased value of his product resulting from an application of the bonus or premium system of payment. But the fact is that the employer should share liberally with his men; and, in the long run, the competition of other employers who are bidding for the services of workmen will force wages up to a point where the workman secures all but a very moderate percentage of the value of his daily product.
Educational Supervision. As previously stated, the old type of foreman mingles the functions of a spy with the functions of a mule-driver. The higher we go in the scale of human intelligence, however, the more noticeable is the fact that the supervisors are teachers of the men they supervise. These supervisors, foremen, managers—call them what you may—have learned that it pays better to spend time in training their men than to spend time in tongue-thrashing. Only of late years has it been discovered that systematic training of the least intelligent of workmen pays equally as well as the training of the most intelligent. The manager who recognizes the necessity of educational supervision, undertakes, first, a careful time study of each class of work. Then he analyzes the results, and deduces methods of securing greater economy. Having evolved a method of procedure, he reduces it to writing, and furnishes his foremen with detailed written or printed instructions to be followed, or, where the workmen are intelligent enough, the instructions are given to them directly; otherwise it is the function of the foreman to instruct the workmen.
Divorce of Planning from Performance. We have just spoken of the education of the workmen by the manager; but, before such education is possible, the manager must educate himself. In brief, he must study the problem and plan its most economic solution. According to the old-style method of management, each foreman was left largely to his own resources in planning methods, and, added to this duty, he had several other duties to perform, such as "pounding the men on the back" when lazy, seeing that materials were promptly supplied, employing and discharging men, looking after the condition of machines, etc. This multiplicity of duties can be properly performed, only by a foreman possessed of a multiplicity of talents. Since few foremen can comply with such a specification for brains, it follows that good foremen of the old style are rare indeed. The modern system of management consists in taking away from the foreman the function of planning the work, and in providing a department that does all the planning. This planning department should be under the supervision of the Cost-Analysis Engineer, for it is he and his assistants who, by unit-timing of work and by cost keeping, are best able to ascertain what methods should be applied to get the most economic results. Having planned a method, the Cost-Analysis Engineer delegates its pursuance to one or more foremen.
Subdivision of Duties. The previous rule of action comes under another, still more general in character—namely, the law of the subdivision of duties. Men are gifted with faculties and muscles that are extremely variable. One man will excel at running a rock drill, another at keeping time, another at surveying, and so on. It is clear, therefore, that the fewer the duties that any one man has to perform, the easier it is to find men who can perform the task well. But give a man many duties to perform, and he is almost certain to do poorly in at least one respect, if not in several. One foreman may have a great knack at "keeping an eye on" machinery, and in having few break-downs and delays. Then it is the part of wisdom to burden him with no other duties, unless the magnitude of the work does not warrant dividing the duties among two or more men. Let him be the machinery and tool foreman, reporting directly to the Cost-Analysis Engineer, and subordinate to no other foreman.
Another foreman may have a special knack at teaching workmen how to use tools and machines. Let him have no other duty but to see that the men have the proper tools, get them promptly, and use them properly. Let him be the gang foreman.
According to the magnitude of the work, there may be different kinds of foremen, all coming in contact with the same men, perhaps, but each performing different functions.