Cyclopedia of Commerce, Accountancy, Business Administration, v. 02 (of 10)American School of Correspondence
General
Cyclopedia of Commerce, Accountancy, Business Administration, v. 02 (of 10)
American School of Correspondence
Accounting; Business; Commerce
(3) Assuming standard shop and work conditions, the worker himself
can do much to coöperate with the management in making the other
conditions as well as himself effective.
(4) Costs should be standardized for the shop on a basis of normal
conditions and be adjusted in the counting room on the basis of the
monthly efficiency factor.
(a) As an incident to high shop organization and efficient operation,
the standard time required for every job should be scientifically
ascertained.
(b) To eliminate accidental and unavoidable variations in material,
etc., the worker is allowed to sum the standard time of all his jobs,
gaining on some, losing on others, averaging closely even.
(c) For coöperating with the management in eliminating wastes, the
worker is paid a 20 per cent bonus for the efficiency of 100 per cent,
which means, that the time taken for all his jobs must be equal to
the standard times allowed for all his jobs. If he takes 10 hours on
a 1─hour job and 1 hour on a 10─hour job, his average remains 100 per
cent.
(d) The same work is assumed to be done always in the same standard
manner. Variations from standard are a general charge or credit to
shop efficiency, not a specific variation in cost. A train passenger
is not charged more because his train has been delayed by a snowstorm,
or less because a fair wind and a clear track made the particular
train run less costly than usual.
Under the efficiency system the worker is entitled to standard day
rates, even if he is doing nothing. If, however, by reason of special
individual effort or skill, he does his work faster, he is entitled,
not to a part (one─third or one─half, as in the Halsey system), but he
is entitled to be paid in full for all the time he saves. As he has not
less coöperated with the management, he is, in addition, entitled to 20
per cent bonus for all the time he works.
Therefore, if a worker whose pay is $0.25 per hour delivers 300 hours
of jobs in a month of 250 working hours, he receives:
1. 250 hours at $0.25 $62.50
2. 50 hours saved, at $0.25 12.50
3. 20 per cent on 250 hours' pay 12.50
──────
Total $87.50
If, however, the worker does not so coöperate with the management as to
make the shop operate at high efficiency, himself included, he does not
receive as much extra pay, but a lessening amount until at 67 per cent
and below he is paid day rate and no more.
The diagram shows plainly the efficiency wage line beginning at 6
hours, showing 20 per cent increase at 4 hours, standard time, and
paying 4 hours time even if the work took no time at all──a condition
that arises practically quite often, as when a worker runs two jobs at
the same time, or when he does work on his own time.
Public-domain text, read in full here on John Shaqi.
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