In this plant, by the use of these methods, and in about seven months, the general increase in efficiency of the men was such that the force was reduced 67 per cent without
reduction in volume of output, but with a great reduction in net total unit cost, even after paying the bonus alluded to and the cost of the expert services which alone produced this result.
The Use of Bonuses.
It is proper to say a word here on the subject of bonus as a means of increasing efficiency. The principal merit of this motive lies in the fact that immediate personal gain is the strongest incentive to immediate personal effort. It operates just as strongly on the employe as on the employer. Hope of promotion is too vague and the actual chances too limited to exert much pressure, but an extra sum in the pay envelope—or better still, in a separate one—for the disposal of the “old man himself,” will do wonders. To be most effectual a bonus must not begin at the point of standard efficiency, but at the point when average efficiency ceases and extra effort begins; and it should increase on a curve faster and faster as the point of standard efficiency is neared, because the accompanying effort will be correspondingly greater.
Efficiency Methods and Department Heads.
So much for the individual operator. And now for the executives. From foreman up to and including the highest official the same methods can and should be applied. Under ordinary circumstances, the workman in need of material, tools or instruction keeps his skirts clear by a more or less indefinite and unintelligible request to the foreman. He thinks it the foreman’s duty to look after him, but that if he does not do so it’s no business of his. Put that man on standard time and bonus and if there is anything he thinks the foreman should do or get for him he speaks loudly and directly. This the foreman does not resent—as would ordinarily be the case—for his efficiency is determined by the combined efficiency of his men and
upon this his bonus depends. Anything, therefore, that interferes with the progress of the men touches him closely, and he will move heaven and earth to eliminate it. All kinds of defects which were previously hidden from the superintendent are now brought to his attention, and he welcomes them for exactly the same reason that actuated the foreman. Thus the change that comes over a shop when efficiency is accurately measured and adequately rewarded is often astounding.
But this is not all. The possession of exact data as to standard and actual times makes possible a certain great improvement in, and addition to, the executive staff and a material increase in the efficiency of the foreman and department heads. By this is meant the installation of a planning department, by which the apportionment of the time of men and machines is controlled. The advantage, indeed, the positive necessity, of the services of engineers and draughtsmen in apportioning the different parts of the product is well understood. The requirements of each part, the strains to which it will be subjected, the kind, quality and quantity of material required to resist these strains, the shapes of the pieces, their relations to each other and many other things are all given most careful attention. The value of fully constructing the design on paper, as a means of discovering possible errors or difficulties, and of correcting or overcoming them before large expense for material and workmanship has been incurred, are too well realized to need more than a simple statement for their acceptance. No sane executive would expect his department heads to take a copy of his customer’s order and individually work out the details with which they are particularly concerned and expect the parts to fit. Yet this is just exactly what is being done as regards the apportionment of productive time; and a tumult of broken promises of delivery, excessive cost of production, enormous
wastes of time in changing jobs, etc., is the immediate and unavoidable result.