Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-03-08
Bethlehem Steel Chairman
Defends Practice of Re-
warding Employees.
SAYS CARNEGIE SUCCESS
WAS BUILT ON SYSTEM
Claims Practice Serves as Incent.
i've to More Efficient
Labor.
BY JOHN F. SINCLAIR.
AZ DiEnafrh 20 The Gf.-

ooor OF opportunity must be kept open
II We are to continue our commercial
leadership, we must continue to reward
men OF productive genius, so that they
will put their best efforts to work for
us" said Charles NJ. Schwab. Chairman
OF the board of the Bethlehem Steel
Corporation. Il hope never to see the
day when poor boy is prevented from
making million dollars II he Is worth
1t. When that day comes, we shall have
shackled ambition and become q Ma
ton Of job holders"
In these words Mr.. Schwab concisely
outlined to me his reasons for estab-
fishing the bonus system in the Beth
lehem Corporation. But the subject
especially the angle covering the appli-
cation OF the system to general indus
trial conditions today. Therefore, I
asked Mr.. Schwab this question:
Opportunity for Reward.
Don't you think it promotes discon-
tent at this time to have so much said
about million-dollar Salaries?"
i think that every man should know
that the door of opportunity is open to
him." he replied quickly. There would
be reason for discomfort il the rise of
corporations meant the solidification Of
wealth and held down the opportunities
for men of real ability TO achieve
wealth. Over many years I have made
no secret of Bethlehem's bonus system,
believing that the million-doll income
made by Mr.. Grace, the son of coun-
try storekeeper, ought to be an inspira-
ton to every poor boy"
But not every man is able to earn
million dollars" suggested
THAT is obviously true" Mr.. Schwab
went on, and continued at length: 1.-THE
important point is that every man shall
have an opportunity for reward in ac-
cordance with his ability, large or small.
We apply some form of incentive pay
ment throughout the Bethlehem Corpo-
ration-as far as is practicable.
Thousands of our employees are on
piecework, tonnage rates or other in-
centive bases which give them an OPP
portunity to earn better wage IL they
are worth more than the average. If
you are going to build American indus
try in the right way you win have to
give reward for effort all along the line.
An instance that happened in one Of
our plants many years ago taught me
that. and I have never forgotten that
incident.
81 saw Bill, one of the men, shovel
ing fire clay, and it didn't seem to me
that he was putting the best possible
eHOAI AlIO ~ Dill, bdiO, now many
tons of clay are you shoveiing every
day?' About IL tons, Mr.. Schwab,' he
replied. I asked him what he could do
if gave him bonus for every shovelful
above that amount He said he
couldn't possibly do any more, as he
was. worn out at the end of the day
now, told him that we would give
him the bonus and see what happened.
Effect Of Incentive.
"For several weeks after that I didn't
see Bill, and finally realized that he
must be lodging me. Finally one day
I ran across him and asked him what
was the matter. He said, I guess you
know, Mr.. Schwab' No, don't know
I answered, What IS the trouble?'
He hesitated a minute and then
said: We'll, told you couldn't shovel
more than IL tons day and now I am
as ! did before. You see,' he added,
every time put up a shovelful now I
says to myself, There's a shovelful for
Bill."'"
Mr.. Schwab's face was wreathed with
smiles of happy Renaissance as he told
this story of the effective incentive pay
ment which had lightened the burden
and increased the pay envelope Of one
of his boy5 In the mills.
"One of the objections to piece rate"
I ventured, "is that men fear that once
they have speeded up they may be re-
rated and the advantage taken away
from them"
ANY system must be carried out in
good faith If it is going to be of any
use" Mr.. Schwab said. THAT is why
L pointed out to our stockholders the
Importance of stability in our system
whether Tor large amounts or small. In
operating a business, the last SIC, OO0,-
600 OF profit is the hardest to earn and
II the percentage Of earnings thereby
adds several hundred thousands of
dollars to the incomes Of those who have
made the extra millions for the corpora
ton, they well deserve it,
Mr.. Schwab turned to the photograph
OF Andrew Carnegie on the wall Of his
ONCE, the great iron master of the early
days OF the American industry. "I cam
not claim credit for originating the
bonus or incentive payment idea in
American industry" Mr.. Schwab said.
proud as I should be If could do SO.
am not one of those who believe
America has come to standstill. do
not believe that Hartman, Vanderbilt
and Hill were the last of the industrial
genuiseS. I do not think that America
has reached the point where it is ready
to say that all the creative work has
been done and that the show win be
run for the rest of time with men on a
straight salary basis, regardless of what
they. can. earn or not earn for their
corporations. There are new brains COM
ing along, the equal of those we have
seen in the past, and better. If we
are going to bring out the abilities of
the generation to the utmost, we must
provide incentive. There may be some
men who have made their own for
tunes who wish to close the door to
,thers. There also may be men of small
means and small experience who be-
lieve that cheap managers and cheap
labor are the proper policy, in spite Of
all the evidence to the contrary.
81 am certain, however, that the mass
Of the American people believe that a
man with great earning power is en-
Titled to reward in line with his
abilities. I have always believed in the
lristocracy Of ability and the democracy
Of opportunity"
(Copyright, 1881. by North American News.
paper Alliance)