Evening star., 1944-04-02
Incentive Pay Plan Adoption
Held Key to War Production
System in Operation in $50 War Plants Brings
IS Per Cent Increase Without Addition
to Labor Force
By James Y. MERTON.

and labor alike were agreed that pay
incentives might be all right for textile
mills where individual output was easier
to measure, but the idea would never
work in any place so complex as an air.
plane factory where work is done by
teams and not so much by individuals.
In measuring the accomplishments of
Grumman under the incentive of extra
pay, is should be borne in mind, always
has been considered one of the most
efficient aircraft plants in the country.
Although the case of Grumman Is
more spectacular since aircraft are at
the top of the list of urgent war pro-
grams, 1t Is just one of many instances
where production has been raised re-
markably by the incentive of more pay.
The general idea of paying a worker
for his output Is far from new. 1t Is
used throughout Russian industry, and
has been animportant factor in supply
ing the Red Army the necessary weap-
ons to push the Nazis from Soviet soil.
1t is decades old in this country-dating
back before the stretch out" plan first
made Charles Bedeaux a wealthy man.
Largely because some management
took advantage of the idea to oppress
their workers by getting more work out
OF them without proportionate in
crease in pay, incentive plans fell into
disfavor with labor, and were thrown
out of the shops when manufacturing
industries were unionized in the 1930s.
Poor Relations Blamed.
incentives have staged something Of
a comeback under the impetus for more
and more war production. Most labor
unions still bitterly oppose them, re-
| membering the old days of the Stretch
out" The fact that incentives are not
more widely employed in war plants to-
day when so badly needed is not the
| fault of labor altogether Generally, 1t
can be blamed on poor labor relations in
| the plants.
For the answers to some of the ques-
tions regarding the possibilities for more
efficient production with incentive pay
brought to mind by the Grumman ex-
perience and others, we might turn to
| John w. Nickerson, director of WPB's
management consultant division Mr..
Nickerson's skeletonized division, with its
handful of industrial engineers, provides
about the Governments only encourage
nent or impetus in the sponsoring Of
| pay incentive schemes in war plants.
IF individual war plants could replace
present conditions with the best of labor
relations, the best engineering methods
of production and the best relations be-
tween wages and productivity" says Mr..
Nickerson, sit is conservative to estimate
that the Nations overall productivity
could be increased IS per cent"
Deplores Lack of Plan.
He goes on further to say that, during
the past year alone, 10000 more planes
and correspondingly more ships and
guns could have been made, and the war
brought to an earlier conclusion, If it
had been possible to apply advanced
principles of industrial engineering and
less emotional approaches to labor re-
lations problems"
Mr.. Nickerson has words of advice for
both management and labor In facing
their responsibility for basing labor re-
lations upon scientific engineering prin-
ciples incentive plans rather than
upon opinions and prejudices.
| To employers, he points out that
management which claims that there
are no grievances within their organiza-
tions are like those which indicate that
they make no mistakes We all know
that mistakes, errors of all kinds and
grievances, expressed or unexpressed,
Well-founded or fallacious, seem to exist
IN every human relationship. The fact
that they arise is not dangerous. 1t is
far better that they should come to the
surface. 1t is the manner in which they
are faced, explained or corrected that
often makes the difference between good
and bad labor relations"
To labor leaders, the WPB official
has this to say on the subject of union
security: Just as management Is most
secure when placing the interests of its
employees and the public ahead of the
pursuit of the last dollar of profit so a
union Is most secure when placing its
contributions to the welfare of the plant,
the employees and the community ahead
of the pursuit of the last reluctant
member"
Almost All Gain.
list of 40 factories in WPB files
where pay-incentive plans were intro
duced recently show that production
gains ranging from nothing to 103 per
cent were realized. The average in.
crease in production above past per-
formance in the 40 plants was AIS per
cent. Mr.. Nickerson explains that the
success of an incentive wage plan in
plant depends largely upon the quality
OF Its labor relations. Where labor dis
trusts management for good cause tho
idea doesn't work out well-no plan
would
Production gains above past perform
ance in few of the important plants on
the WPB list follow: Electronic tubes,
65 per cent; aircraft parts, 70 per cent;
life belts, rubber boats, AZ per cent:
metal products, 103 per cent; metal
salvage, 100 per cent; aircraft tank
motors, no gain, the only instance where
the result was so poor. Fifteen of the
plants registered gains from zero to 20
per cent, II from q to 40 per cent, IL
from Al to 60, 6 from 81 to 80, S from 81
to 100 per cent and l more than 100
per cent.
WPB studies show that the best re-