5. Trade-union opposition, to rate-fixing.—Said the old-time doctor who sold his own drugs, "It is silly, perfectly useless, to depend upon apothecary's weights for drugs, because it takes fifty times as much chloroform as it does cyanide of potassium to kill a goat." Analyzed, this statement simply means that a druggist's scales need to be used even by a man who knows the difference between chloroform and cyanide of potassium. Labor-union leaders often condemn premium systems by similar reasoning. "It is harm ful, absolutely iniquitous to depend upon the Taylor system of wage payment for a square deal, because it takes fifty times as much 'minimum wage' as it does 'straight piecework' to kill a workman." The point of view represented by such a statement is held by two distinct classes: (1) those who do not understand the principles of time- and motion-studies which underlie all scientific wage systems, but who are honestly endeavoring to get the most out of a very complex relationship between employer and employe, and (2) those who do not understand these principles, and who, because they do not understand them, fear that the principles will interfere with certain selfish interests. These men prefer to befog the issue rather than analyze the problem and establish the true rela tionship.
6. The employe as rate-fixer.—The premium or bonus idea in industry is not new. The difference be tween the old and the new application of the idea has to do, fu•st, with the method of determining the bonus, and secondly, with the person relied upon to estab lish the bonus standard. The germ of tbe bonus sys tem lies in the mind of every shop and office employe who believes that he should be paid a daily wage just for being "on the job," and that if the employer wants extra "results" he must give an extra inducement. The reply of the Liverpool Harbour Iioard's car penter who applied for a job at the Alersey Dock office, shows how and by whom the bonus standards were established under the traditional systems of man agement. When asked what wages he expected, he replied, "Three shillings if I take the hammer here" (up near the head) ; "four shillings if I take it here" (half way down the handle) ; "five shillings if I take it here" (at the point where he could work most effi ciently with it) .
7. The employer as rate-fixer.—The labor problem is sometimes given a narrow interpretation from the administrator's point of view, as follows : "How can I, as manager, occupy all the time of my employes productively, continuously and profitably?" Driving, false allurements and cut-piece rates have all served their day and, like all false methods, their after and indirect effects are worse than the immediate results.
The distrust which laborers now have of every method proposed by the management is one of these indirect effects; and now that organized labor has forced em ployers to resort to some method other than that based on fear and guesswork, the good methods backed up by the high-principled motives which are now preva lent, must suffer thru the opposition of the unions, because of bad predecessors. The wage difficulties which now beset the administrators are a natural out growth of the old system of management, which put nearly all the productive responsibility upon the la borer. The laborer, not being able to pass the work farther down the line to someone below him, took ad vantage of his position to "scamp" and "soldier." The management then began to devise means of forc ing a higher labor efficiency and, as a result, a number of wage systems appeared. The first of these was the straight piece-rate system. By its means, the manager sought to stop "soldiering" by paying only for what each man produced. This had its desired ef fect. It brought about overproduction from the management's point of view, and overwork from the standpoint of the men. To correct these evils, the employer at first cut the piece-rates, and the employe thru his union set a minimum wage. In this contest the unions won, but rather thru force than thru the championship of a correct principle of wage de termination. Next, the employer tried to overcome the trade-union prestige by accepting the prevailing,' daily wage of the locality, and adding to it a bonus or premium, provided a certain standard task was per formed. This brings us to the first formal plan, now known as the Halsey-Towne premium system. Altho this left the situation very little better than before, yet it did show the weakness of any system which did not try to determine the nature of each task from direct observation before a rate of payment was attached to it. The fundamental weakness of this system was its reliance upon the past records of performance, and upon the workingmen's own estimate of what should constitute a reasonable time of performance.
To remedy this fault, the third step in the develop ment of wage systems was introduced. Mr. Taylor, in his differential piece-rate system, placed the empha sis upon the importance of making a close analysis of each job before a standard of performance should be published. This study being made by the manage ment and under the direction of experts, little import ance was attributed to the old records of the employe or to the employe's estimate of his own worth.