Evening star., 1944-05-21
Guaranteed Annual Pay Plan
Reveals Three-Way Benefits
Steady Work and Income Under HORNED Program
Aids Workers, Company and Community
Now Backed by CIO
By Charles G.. Ross.

Remarkable success mas aJCenoed the
HORNED guaranteed annual wage plan,
under which the employe receives 50
equal pay checks q year regardless OF
the time worked in any specific week,
and bonuses are paid for production in
excess of established quotas.
The equal-pay checks part OF the
plan requires that in busy seasons the
employe shall work more than the
standard 40 hours week without over
time pay; thus in effect he repays the
employer for the money ''lent" him In
slack seasons, when he works fewer than
40 hours. The bonus system, an integral
part Of the plan, falls within the cate
CORY of incentives which union labor
generally has resisted as speed up"
devices.
What, then, is the attitude Of union
labor toward the HORNED plan?
The best answer to this question con-
sists in the fact that the brief Of the
United Steel Workers, Philip Murray's
union, submitted to the War Labor
Board in support of the unions re-
quest for a guaranteed annual wage in
the steel industry, carries an enthusias-
tic Endorsement Of the HORNED plan and
is accompanied with detailed descrip-
ton Of the plan as Exhibit No. 15."
Approval Came Slowly.
The plan Of Geo. A. Horned & Co. OF
Austin, Mimi, which through collective
bargaining with the CIO union has
guaranteed an annual wage to its en-
ployes," is declared by the brief to have
been tremendous success" and to rest
on "a sound economic basis" The brief
adopts the conclusion Of a University
Of Minnesota study that the job stabili-
zation policies Of the company have not
only helped the company and its en-
ployes, but have redounded to the great
benefit Of the whole economy in Austin.
Acceptance Of the plan by the workers
did not come overnight. When it was
first installed In q small way In 1881,
after four years Of study by the COM
pany, a considerable number of workers
objected on the ground that it was just
another kind Of speedup system.
In the whole Of 1888, only 28 employees
were added to the small group-166-
already working under the plan. The
CIO union In that year went so far
as to request that all these be returned
to the old hourly payment basis. Grad
ually this attitude changed. In the next
year 863 were placed on the annual
wage basis and today the plan embraces
virtually all the 1000 workers. That the
employees generally favor it is attested
by the fact that It's adoption in any
department was made contingent on the
approval Of majority OF the workers
affected.
Establish Union Shop.
simultaneously with the perfecting OF
the new wage plan extensive union or
ganization took place among the Horned
employees resulting finally In the estab-
hshment Of the union shop'-the de-
vice by which each worker is required to
join the union within short period
after being employed. The University
Of Minnesota study suggests that the
original trouble over the plan was due
to the lack Of employe organization.
Though officials Of the company thought
they were giving the smokehouse gang
the first employees to be brought under
the system-full opportunity to discuss
the change it was later found that some
Of the workers were dissatisfied but were
reluctant to state their views. After the
organization of the union, it became
possible for the management to iron out
numerous problems through conferring
with employe representatives.
Jay G. Hormel, head Of the company,
said in radio address at Austin, No
vember 20, 1899, that, while it was a
gross error to suppose that the success
full development of the company's en-
ployment policies was due either to the
existence of militant union or to
management that wanted to play Santa
Clause, he did believe that neither the
straight-time plan (the company's name
for the annual wage plan), nor the
bonus plan, nor the joint earnings plan
could ever have been made to work
satisfactorily If it had not been for
the union"
There Is still, according to Prof Emer-
son p. Schmidt Of the University of
Minnesota, who has been a close and
sympathetic observer of the plan from
its start, a small group of the employees,
perhaps 10 to IL per cent, who regard