The Washington times., 1922-10-20
Money and Trade
Profit-sharing Plans.
Why They Have Failed.
Industrial Unrest.
No General Cure.
BY GEORGE w. HINMAN.


CHICAGO. Oct. 2O.-Does profit
sharing with employees help bust.
ness? Does 1t prevent industrial
unrest? Does It reduce the amount
OF discomfort in the workshops of
the country?
These questions are alive every
day. every hour. They were an.
swered year ago for the United
states In a book on profit sharing
by American employers" They are
answered now for Great Britain in
book on sharing profits with EN-.
ployes." The British work has lust
come to hand and 1t covers the sub.
ject practically ITO date.
Up to 1900 there were 1914 business
concerns Of size In Great Britain that
tried the plan Of sharing profits with
employees. or these. only thirty.six
still share profits. The rest have
abandoned the plan.
Since 1900 there have been l86 new
efforts to make profit sharing a sue
cess In Great Britain. or these,
forty have been given up.
That Is, OF $50 ofit-sharing
schemes tried In Great Britain TO
date, 198 have been given up as fail
ures and lS2 are still in operation.
Causes Of Failure.
The reasons for giving up the
profit-sharing plan are of many
sorts. In nearly half the cases Of
failure. general discomfort" or
general dissa abstraction" IL reported
as the cause. What does that
mean? Why should a project which
promises the workingman q part Of
the factory profits, in addition to
hts wages, fail to please him at
all? Why should he. in most cases.
be less dissatisfied with the wages
alone than with wages plus a share
in the profits?. The author, by mis-
answers. sheds lot of light on
this dark subject. The reasons
given by him are:
]. The smallness of the working.
mans share. The undivided profits
look big. One hundred thousand
dollars in profits to the employer
seem enormous In an ordinary line
Of business. but distributed at the
end OF a year among thousands
Of employees, it means only 500
to the man or less than thirty-five
cents a day.
2-The payment Of the workers 8
share too long after the work is
done. In England only one work
ingman in ten is supposed TO do
his best in the factory. The rest
are supposed to work up TO only
about half OF their capacity. The
profit-sharing was expected to in
spire these men to work harder in
order that the profits and their
share In the profit might be N.
creased. Experience shows that
most men get little inspiration from
the prospect Of a little extra money
six months or year from date.
Uncertainty Of Profits.
3-The uncertainty of getting
any profits or share in the profits.
Even those workers who are inter
ested in getting their share of the
profits in good business years feel
that they are robbed when, in bad
business years, there are no profits
to share in. To them profit t-shar-
ing means that there always should
be profits. that profits should be as
regular as wages. II profits fail
to be made and paid. the worker s
second state OF mind is worse than
his first. He Is not interested in
what may happen when business
picks up. The profits to be shared
two or three years hence are TO
him as II they never would be.
These three points would be
mighty useless reading IL they were
pure theory. But they are not.
They are the conclusions from reams
of evidence in industrial records, Of
ficial reports and special surveys.
What do they mean? For one thing.
that profit sharing is no general cure
for strikes, lockouts and other in
dustrial tumuits. For another, that
handworkers. like all the rest Of
mankind. whether in the professions
or on office staffs. whether clerks
or employees. would rather spend
than save, would rather get their
pay early than late. would prefer
using at the present all that they
earn instead Of letting any part Of II
accumulate for a rainy day.
There are other reasons why
profit-sharing fails OF it's aims, at
least as often as II succeeds. But
the foregoing reasons are enough,
for they are human and common
and inevitable. The British ex.
perience is not unlike the American.
To a limited extent profit sharing
is a good thing, but It is no general
cure for Industrial unrest. That is
corfaip