"The Towne-Halsey plan consists in recording the quickest time in which a job has been done, and fixing this as a standard. If the workman succeeds in doing the job in a shorter time, he is still paid his same wages per hour for the time he works on the job, and, in addition, is given a premium for having worked faster, consisting of from one-quarter to one-half the difference between the wages earned and the wages originally paid when the job was done in standard time," Dr. Taylor's discussion of this plan will be found in "Shop Management," paragraphs 79 to 91.
Psychologically, the defect of this system undoubtedly is that it does not rest upon accurate scientific time study, therefore neither management nor men can predict accurately what is going to happen. Not being able to predict, they are unable to devote their entire attention to the work in hand, and the result
cannot be as satisfactory as under an assigned task, based upon time study. The discussion of this is so thorough in Dr. Taylor's work, and in Mr. Halsey's work, that it is unnecessary to introduce more here.
Profit-sharing. — Before turning to the methods of compensation which are based upon the task, it might be well to introduce here mention of "Coöperation," or "Profit-sharing," which, in its extreme form, usually means the sharing of the profits from the business as a whole, among the men who do the work. This is further discussed by Schloss, and also by Dr. Taylor in paragraphs 32 to 35, in "A Piece Rate System"; also in "Shop Management," quoting from the "Piece Rate System," paragraphs 73 to 77.
Objections to Profit-sharing. — The objections, Dr. Taylor says, to coöperation are, first in the fact that no form of coöperation has been devised in which each individual is allowed free scope for his personal ambition; second, in the remoteness of the reward; third, in the unequitable division of the profits. If each individual is not allowed free scope, one sees at once that the entire advantage of individuality, and of personal recognition, is omitted. If the reward is remote, we recognize that its power diminishes very rapidly; and if there cannot be equitable division of the profits, not only will the men ultimately not be satisfied, but they will, after a short time, not even be satisfied while they are working, because their minds will constantly be distracted by the fact that the division will probably not be equitable,
and also by the fact that they will be trying to plan ways in which they can get their proper share. Thus, not only in the ultimate outcome, but also during the entire process, the work will slow up necessarily, because the men can have no assurance either that the work itself, or the output, have been scientifically determined.
Scientific Management Embodies Valuable Elements of Profit-sharing. — Scientific Management embodies the valuable elements of profit-sharing, namely, the idea of coöperation, and the idea that the workers should share in the profit.
That the latter of these two is properly emphasized by Scientific Management is not always understood by the workers. When a worker is enabled to make three or four times as much output in a day as he has been accustomed to, he may think that he is not getting his full share of the "spoils" of increased efficiency, unless he gets a proportionately increased rate of pay. It should, therefore, be early made clear to him that the saving has been caused by the actions of the management, quite as much as by the increased efforts for productivity of the men. Furthermore, a part of the savings must go to pay for the extra cost of maintaining the standard conditions that make such output possible. The necessary planners and teachers usually are sufficient as object-lessons to convince the workers of the necessity of not giving all the extra savings to the workers.
It is realized that approximately one third of the extra profits from the savings must go to the employer,
about one third to the employés, and the remainder for maintaining the system and carrying out further investigations.