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Payment by Results

Payment by Results

PAYMENT BY RESULTS PAYMENT BY RESULTS INTRODUCTION. ORGANIZATION RATE-FIXING BY J. E. POWELL AUTHOR OF THE OUTPUT PROBLEM WITH DIAGRAMS LONGMANS, GREEN AND CO. LONDON NEW YORK TORONTO 1934 LONGMANS, GREEN AND CO. LTD. 39 PATERNOSTER ROW, LONDON, E. C. 4 6 OLD COURT HOUSE STREET, CALCUTTA 53 NICOL ROAD, BOMBAY 36A MOUNT ROAD, MADRAS LONGMANS, GREEN AND CO. 114 FIFTH AVENUE, NEW YORK 221 EAST 20TH STREET, CHICAGO 88 TREMONT STREET, BOSTON LONGMANS, GREEN AND CO. 480 UNIVERSITY AVENUE, TORONTO First published 1924. Cheaoer Reissue April 1934. Made in Great Britain PREFACE IN the pursuit of efficiency in production, much attention has been, and is still being concentrated upon the methods or systems by means of which payment of wages is made in accordance with the results as shown by the amount of output obtained. While there can be no doubt as to the efficacy of linking up wages and output in this manner, the most careful consideration is necessary in so doing to ensure that not only will the application of the principle be right, but also, what is, perhaps, of more importance, that the introduction of the system chosen shall not be attempted until the conditions obtaining in the workshops are such as to render its successful operation possible. While the history of payment by results as regards influencing output in an upward direction is undoubtedly good, yet the effects of its application, as evidenced by the attitude adopted by the Trade Societies, are deplorably bad and, in the interests of industry itself, it is a problem of the first importance, to effect an immediate and permanent improvement. For this improvement to be possible, however, it is necessary, first, to discover thecauses of the trouble and, in making this investigation, it will frequently be found that the apparent causes are not the real ones. That the will exists to discover and to remove any conditions which are detrimental to smooth working is in no doubt. Many firms are willing to make real concessions to ensure that payment by results shall be accompanied by fair and equitable conditions and it would appear, almost, from the various suggestions put forward, in some cases by employers themselves, that most of the past troubles have been caused by a lack of good faith as evidenced, for example, by the cutting of job rates. The author has been forced to the conclusion, however, that, in spite of superficial beliefs, the question, deep down, is one of economics rather than of good faith, and that, when output is low, the right remedy is not, necessarily, payment by results, which, by inference, places the responsibility for low output upon the workers, but rather, is the acquirement, by management, of efficient production knowledge and the exercise of suitable production control. He believes that much of the trouble which has been experienced is due to the wrong use the abuse of payment by results, and has not been caused by its legitimate use. It is suggested that a different
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