Evening star., 1926-08-27
MORE PAY REWARD
FOR BETTER WORK
Industry Adopting deficiency
Bonus" Plan in Operation
With Armour Co.
BY j. c. ROYLE.

Special Dispatch to The Star.
NEW YORK, August 27.-The work
man who does good work today gets
more than a pat on the back. He gets
bulge in the pocketbook. Individual
worker efficiency has become so strong
factor in industrial profits that mod
crn employers. instead of trying to
hold a workers returns down, are
anxious to put them up, provided the
worker can and does deliver the
goods.
Steel executives throughout the Mid
die West are frank in expressing their
belief that the profits they have piled
up in the last six months have been
due. in good measure. to increased
worker efficiency. Other lines Of en-
deavor have made similar discoveries.
They are adopting the same system
by which William r. Gibbs made oper-
alton of the Leviathan under Ameri-
can shipping regulations possible.
They do not wait for adjustment of
new wage scales at the end of a con-
tract period. They make promotion.
or at least increased earnings. effec-
tive at once.
Armour Pays Bonuses.
Today 1000 employees of Armour &
Co. are receiving extra pay or bonuses
lOI eHlcieHL WpIk. over d IldlI IIii-
lion dollars was distributed by the
Armour company for "better-than-
average work" and, it is expected.
double that sum will be paid out in
1926. The employees in the packing
industry are not organized. These
payments We're not made on their de-
mands. Neither We're they made out
of the kindness of heart of the pack
ers. They represented payment for
value received, which could be given
compensation in no other way. The
company in question is not alone in
taking such steps. It is cited merely
because OF the large number of un-
skilled workers employed.
In most industries executives have
SO lately come up from the ranks that
they know every detail of the unskilled
mans work and what constitutes Il
fair return in labor for fair day s
pay. For anything above that return.
the most aggressive and successful
managers are willing and anxious to
pay.
Explains the Plan.
+. Edison White of Armour & Co
explains it as follows: "Our plan COM
bines the two basic methods of wage
payment ordinarily adopted by indus
try-hourly work, which heretofore
affected 95 per cent of all employees in
the company's plants. and piece work,
which heretofore has affected the re-
naming per cent.
Hourly work compensates for skill
and assures a minimum wage regard
less of plant operations. but does not
take into account better than aver
age productivity. Piece work rewards
both skill and productivity, but only
when wage rates are determined sci
entifically and satisfactorily and plant
operations are more or less constant
Some time ago the industrial and
engineering department determined
just how much satisfactory work
could be turned out in an hour or a
day by an employe of average skill
and productivity. This average out
put was adopted as a standard. The
new plan combines most of the ad-
vantages of both the hourly payment
method and the piece-work method
Plan Being Extended.
ut allows the same basic hourly
rate according to skill and provides
an extra earning or bonus for work
done in excess of the standard. Gen
orally speaking. the bonus rate is
four-flfths Of the hourly rate. the re-
maining one fifth being set aside for
bonus payments to indirect labor
supervision.
This incentive payment plan is
gradually being extended to include
more employees and is demonstrating
its practical worth by increasing
wages and decreasing costs. 1t re
wards the ter-than-average worker
without penalizing those who are be-
low average and provides an incentive
for both direct and indirect labor. 1t
is expected that the plan will be so
extended that at the end of the cur
rent year extra wages will be doubled
the amount paid last year"