Evening star., 1944-05-21

hanced standard of living, but say that
It is inherently a speedup device. The
workers in given department., they
argue, are placed under an incentive to
their quota Of production units
In as short time as possible: when
they apply themselves in response to
this incentive and reduce the time con-
in their contract the Inanage-
ment is in position TO insist on a
higher quota or a smaller number Of
employees to produce the old quota.
Doubts Company's Power.
1t Is true, Of course, that incentives
have been provided which make 1t ad-
vantageous to the employe to give his
best to his job. The sooner he finishes
his work, the sooner he leaves the plant.
Or the more work he performs in his
regular working time, the larger Is his
bonus. Under these circumstances the
University Of Minnesota report points
out, the management might consider re-
ducing the rate of pay per unit Of OUT
put, or 1t might hire smaller number
Of men to turn out the same volume,
but whether 1t could in fact enforce
such increased standards of required
work would depend on the bargaining
power OF the employees. In the present
instance, with the employees organized
in strong union, the power Of the
management to introduce such modi-
fications In standards is questionable"
Tha ~ @ha
seems to be that the collective bargain.
ing powers Of the union furnish the EN-.
ployes with ample protection against
excessive speedup demands by the man
agement. In any case, the great bulk
Of the employees are satisfied, and the
CIO nationally is holding up the plan
As model. These reactions are not sur
prising in view Of the fact that the
weekly earnings Of the employees have
not only been stabilized, with resultant
benefits to them and to the whole COM
munity, but have increased. The aver
age weekly pay In 1885 was 1880. BY
1910 it had gone up to $3.50 and there
has been substantial gain since then.
Beginning with 1899, the average
weekly pay has reflected the workings
not only Of the annual wage and bonus
systems, but Of joint earnings plan
whereby the employees share In any gains
from increased business or more efa-
cient operation. In 1889, the joint earn
ings plan resulted in each employees get
ting q year-end bonus equal to a little
more than one and half weekly pay
checks. This was equivalent to 3 per
cent increase in pay. Last year, the
bonus was equal to seven weekly checks
Get Benefits AutematicalIy.
This is not just another proht-shar-
ing plan; 1t goes deeper" says Prof.
Schmidt. Every additional dollar Of
sales means few pennies extra for
the employees and q fraction OF q penny
for the stockholders. Every time hot
water running to waste is turned oil
or electric lights burning uselessly are
prevented, the employees and the man.
agement share in the saving. Employees
have a direct and immediate interest ip
efficient operation.
If prices improve, or volume picks
up, the employees do not have to wait
until some one in the organization gets
around to thinking of raising the weekly
pay checks. Rather, the employees get
the benefit automatically"
How does the guarantee wage plan get
under the tent of the Fair Labor
Standards Act d938), which fixes ths
work week at 40 hours and requires
time-and-a-half pay for overtime? Sec.
ton (b) CD Of the act, written into
it to take care OF just such programs az
this, exempts an employer from thu
4O-hour and overtime provisions with
respect to employees who, as the result
OF bona f1de collective bargaining
agreement, are on an annual wage
basis and are not worked more than
1000 hours year. Under this provision
the work week may run to 56 hours at
straight time. But for the insertion of
Section Z (b) (2), the plan would have
been wrecked.
When MIR. HORNED installed the guar
anteed annual wage, he calculated that
plant efficiency would be increased 10
per cent. This expectation, say STU
dents OF the plan, has been more than
realized. Also, the company has
profited through lower taxes on its paw
roll. Like the unemployment compen-
sation laws of most of the States, that
OF Minnesota has experience (or
mer1D rating" provisions which reduce
the payroll taxes of EMPLOYERS who
regularize their employment. Without
the annual wage plan the company. en-
gagged as it Is in an industry with a
peculiarly high labor turnover, would
have to pay the highest rate provided
by the Minnesota law. AS it is. the
company enjoys the lowest rate. The
difference is 81 per cent of the payroll
This amounts to one-quarter cent on
each dollar of sales, or 16 per cent on
invested capital.
Not the least of the factors in the
success of the wage plan is the energy
and enthusiasm of the company's presi-
dent. Unemployment in Austin. he felt
was his personal problem, for there is
scarcely family in its population of
10000 that is not affected directly or
indirectly by the company's policies.
Whenever he saw an unemployed man.
he said to himself, there goes nv I'm.
employed man." He decided that sonne-
thing ought to be done about it. In
1927 the company began setting aside
s2,5oo a month for job stabilization
program and in 1881 the plan was
launched.
Ihe extent OF Hormel's enthusiasm
for the plan may be gauged by the
fact thot ho