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
While the diagram can be applied to a 4─hour job, the worker is not
paid by the separate job, but is paid straight day wages and a bonus
for his full─pay period efficiency. For each per cent of efficiency
there is a corresponding increase in pay.
For 100 per cent efficiency the increase is 20 per cent, and for each
1 per cent increase in efficiency above an efficiency of 100 per
cent, the pay also increases 1 per cent; therefore, for 120 per cent
efficiency the pay is increased 40 per cent. Below 100 per cent the pay
table runs as follows:
Efficiency Additional Pay
Per Cent Per Cent
67 0.00
74 1.
80 3.27
85 6.17
90 9.91
95 14.53
100 20.
The system has other merits:
(1) It standardizes not only the work of each worker, but also of every
foreman, every department, and of the shop as a whole.
(2) It therefore standardizes the shop cost of every job, whether it is
done by a cheap apprentice in two hours, or a high priced mechanic in
10 hours. The average shop or department efficiency factor equalizes
accidental variations.
(3) It separates absolutely all questions of wage rate from questions
of output, shop conditions, or individual excellence.
(4) It fines the management heavily if shop conditions are not
maintained so as to realize standard times.
(5) It puts no limit on the ambition or earning power of any man.
(6) Standard times are being constantly corrected. If the standard man
cannot average 100 per cent on his schedules, it is evident that some
of them are too short and ought to be lengthened. If on the other hand,
a new machine tool is introduced, new schedules are drawn up for it,
but the worker will not, on that account, make less than he did on the
old schedule.
It is too much to expect that any system of paying wages will
prevent an outbreak of selfish interests whether of employer or wage
earner. There will, however, be a distinct gain if the nature of the
disagreement can be made entirely distinct and plain. Clear thinking
must precede clear acting, and this description of different wage
systems may contribute towards clearer conceptions and more just
practice.
Public-domain text, read in full here on John Shaqi.
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