STANDARDIZATION AND RATE-FIXING 1. Chief elements in ellicieney.—The principal mat ters in connection with efficiency that have been treated so far are : (1) the centralization of manufacture at shops best fitted by reason of location or otherwise for doing . the work ; ( 2) standardization of parts, tools and operations; (3) supervision of materials, tools and methods, and the planning and designing of devices and tools to help labor and machines in re ducing delays. There still remains a fourth topic for consideration—that which relates to the reduction of labor cost by the application of a system of wage pay ments and a system of adequate instruction.
2. Standard time not always shortest time.—In de termining the standard time of any process involving the combined work of machines and men, the many difficulties that arise are largely due to the "human element." Some of these difficulties have been men tioned; among them is the difference in men's capacity to work. Therefore, before a standard time can be adopted for a particular operation, it must first be de termined what the capacity of the average man is. If the standard time is based upon what the best man can do, and the average laborer is expected to reach that standard, the failure of any wage system based upon it is practically certain.
3. Standards for wage systems.—Standards are of little value unless they can be used as measures in comparisons. A standard in a system of wages must be used in effecting two comparisons ; first, the work ing efficiency of each laborer at different times; sec ond, the working power of different laborers. By a consideration of these two comparisons, the manager is enabled to determine what the individual laborer is capable of doing from day to day, and what he ought to do as compared with the other laborers who do the same grade of work. This is a long and difficult task, but once working standards have been determined for a man, it then follows that the management must pro vide records by which costs and profits can be checked, and a proper incentive can be furnished which shall serve to keep the laborer diligently at work. How then may laborers be held to standard performances? The machine requires as its return only the repairs and renewals necessary to keep it going. The laborer, on the other hand, asks as his return all that he pro duces. The nearer he thinks he is approaching this reward, the greater is the incentive to work. It is,
therefore, not always a high wage that determines the labor efficiency of a factory but the system by which the wage is determined and paid.
4. The moral responsibility in rate-fixing.—In every mechanism, in every system, in every relation ship between two persons, or between social and eco nomic groups, there is a point upon which the differ ent forces or interests converge with a maximum ef fect. The entire operating success of the machine, business, industrial organization or social group, de pends upon the man or institution that stands at the focal point, so balancing the forces and interests that a perfect equilibrium is obtained and the structure at this point is kept from yielding to the special strain. Such men, in the work of distribution, are the grain and cotton graders and other inspectors of staple prod ucts. Upon the judgment of these men depends the determination of the class or grade in which the neces sities of life are placed, and in so far as they determine this they fix the price which the producer will get, and which the consumer will pay for these products. In factory and in office the rate-fixer holds a position siniilar to that of the grain inspector and grader. Grading and rate-fixing depend upon the same funda mental principles. One deals with commodities, the other with men, but both must discover the dominant characteristics that give commodities or men varying commercial values. One value pertains to the mar ket, the other to the employer. And each, in its way, is of equal importance to the laborer. As a con sumer, the wage-earner is interested in the price that he pays for his food and clothing—poor grading may cause the laborer-purchaser a loss, because he may pay for a quality which is lacking. As a producer, the wage-earner is anxious about the price he gets for his labor. Bad or slovenly rate-fixing may compel him to take less for his work than he should get, be cause his job has been graded below the class to which it belongs. There is no other position in the business world where the moral responsibilities are greater than those of an inspector whose judgment determines the grade of commodity, goods and labor for any social group. Such men are standard-makers, and upon their standards much of the happiness of mankind de pends.