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ROYAL MEEKER, Commissioner

(WHOLE 0 0 7





PHIA, PA., APRIL 2 AND 3, 1917










Opening remarks by the chairman, John M. Williams, secretary, Fayette R.
Plumb (Inc.); president, Philadelphia Association for the Discussion of
Employment Problems..........................................................................................
7, 8
Welcome to the university, by Dr. Edgar F. Smith, University of Pennsylvania.
8, 9
The progress of employment managers’ associations, by Meyer Bloomfield,
director, Vocation Bureau, Boston, Mass............................................................ 10-12
The cost of labor turnover, by Magnus W. Alexander, of the General Electric
Co., West Lynn, Mass............................................................................................ 13-27
How to reduce labor turnover, by Boyd Fisher, vice president, Detroit Execu­
tives’ Club.............................................................................................................. 29-47

The tabulating of labor turnover, by E. H. Fish, employment manager, Norton
Co., Worcester, Mass.; chairman, committee on labor turnover of Employ­
ment Managers’ Association of Boston................................................................. 50-55
R. C. Clothier, assistant to vice president, A. M. Collins Manufactur­
ing Co., Philadelphia, Pa....................................................................... 56, 57
Mr. Markert, of the Emerson Co., New York...........................................
E. H. Fish.................................................................................................... 57-59
Mr. Tolsted, of the Independence Inspection Bureau............................
Mr. Fleisher, of the Metropolitan Life Insurance Co.............................. 58, 59
Determining cost of turnover of labor, by Boyd Fisher, vice president, Detroit
Executives’ Club................. ................................................................................. 60-66
Ordway Tead, of Valentine, Tead & Gregg, Boston, Mass............... 67-69, 72
E. H. Fish, employment manager, Norton Co., Worcester, Mass.; chair­
man, committee on labor turnover of Employment Managers’ Associ­
ation of Boston.................................................... *................................... 69, 70
Ralph G. Wells, secretary, Employment Managers’ Association, Boston. 70, 71
H. L. Gardner, employment manager, Cheney Bros., South Man­
chester, Conn...........................................................................................
Dudley R. Kennedy, director, labor department, B. F. Goodrich Co.,
Akron, Ohio.............................................................................................
Boyd Fisher, vice president, Detroit Executives’ Club......................... 72, 73
Miss Mary Barnett Gilson, superintendent, employment and service
department, the Clothcraft Shops, Cleveland, Ohio............................

What the employment department should be in industry, by Henry S. Den­
nison, president, Dennison Manufacturing Co., Framingham, Mass............... 77-81
The reduction of labor turnover in the Plimpton Press, by Mrs. Jane C. Williams,
employment manager, Plimpton Press, Norwood, Mass.................................... 82-91
Fellowship: basis of true relation of employer and employee, by Clarence H.
Howard, president, Commonwealth Steel Co., St. Louis, Mo........................... 92-95




The organization and scope of the employment department, by N. D. Hubbell, Page.
employment manager, General Railway Signal Co., Rochester, N. Y ........... 97-111
Informal talk by Roger W. Babson, president, Babson’s Statistical Organization. I l l, 112
Vocational selection at the Carnegie Institute of Technology, by Walter Dill
Scott, Ph. D., Carnegie Institute of Technology........................ .. ................. 114-119
The selection problem of Cheney Bros., by H. L. Gardner, employment mana­
ger, Cheney Bros., South Manchester, Conn....................................................120-125
Statement by Alvin E. Dodd, secretary, National Society for Promotion of
Industrial Education.......................................................................................... 125-128*
Statement by John A. Fitch, of the Survey, New York City...........................128-130
L. S. Tyler, of New Haven, Conn.......................................................... 130,131
Meyer Bloomfield, director, Vocation Bureau, Boston, Mass............. 130,131
Report of Organization Committee....................................................................... 131,132
A. Lincoln Filene, of William Filene’s Sons Co., Boston, Mass......... 132,133
Analyses of reasons for leaving and their use, by Joseph T. Gilman, employment
supervisor, William Filene’s Sons Co., Boston, Mass..................................... 134-138

Work of the employment and service department of the Clothcraft Shops, by
Mary Barnett Gilson, superintendent, employment and service department,
the Clothcraft Shops, Cleveland, Ohio............................................................. 139-152
Service work of the Eastern Manufacturing Co., by Jean Hoskins, service
secretary, Eastern Manufacturing Co., Bangor, Me......................................... 153-157
Conclusions from a survey of over 500 employees’ benefit associations, by
W. L. Chandler, of the Dodge Sales & Manufacturing Co., Mishawaka, Ind. 158-167
Mutual aid associations of Strawbridge & Clothier, by John Jackson, superin­
tendent, Strawbridge & Clothier; vice president, Philadelphia Association
for the Discussion of Employment Problems..................... ............................. 168-172

An actual account of what we have done to reduce our labor turnover, by John
M. Williams, secretary, Fayette R. Plumb (Inc.); president, Philadelphia
Association for the Discussion of Employment Problems............................... 173-190
John M. Williams..................................................................................... 191,192
Mr. Gould, of the B. F. Goodrich Co., Akron, Ohio............................ 191,192
W. F. Winan, of the National Carbon Co., Cleveland, Ohio..................
Mr. Johnston, of Atlanta, Ga.....................................................................
Individuality in industry, by Robert B. Wolf, manager, Spanish River Pulp
and Paper Mills (Ltd.), Sault Ste. Marie, Canada.......................................... 193-206
L. S. Tyler, of New Haven, Conn............................................................
Robert B. Wolf......................................................................................... 207-210
Clarence H. Howard, president, Commonwealth Steel Co., St. Louis,
Mo................................................................................................... 207,209,210
Ralph G. Wells, secretary, Employment Managers’ Association of
Boston...........................................: ............................................... 207,208,210
Mr. Place, of the National Civil Service Reform League.......................
Mr. Markert, of the Emerson Co., New York....................................... 208, 209
A. Lincoln Filene, of William Filene’s Sons Co., Boston, Mass......... 209, 210
Mr. Kramer, of Dayton, Ohio.....................................................................

This bulletin contains the Proceedings of the Conference of Employment Managers
which met in Philadelphia April 2 and 3, 1917. This Philadelphia conference is
the third of the kind held in this country. The first Conference of Employment
Managers was held in Minneapolis January 19 and 20, 1916. The second meeting
of this kind was held at Boston May 10, 1916. The proceedings of the first and second
conferences are given in Bulletins 196 and 202 issued by this bureau.
Employers in growing numbers are obliged to recognize that a changed policy
must be adopted toward their employees. The worker has acquired a scarcity value
as a consequence of the war, which makes it all the more imperative that the old
wasteful methods of handling the labor force shall be discarded. By far the greatest
waste in all industry is the waste of labor due to bad systems or no systems of han­
dling employees. The results are irregular work, too little work, too much work, no
work, unsuitable work, no training for work, training for no work, and bad condi­
tions of work.
Even before the supply of immigrant labor was cut off by the outbreak of the Euro­
pean war the more enlightened employers had found out that the training and fitting
new men into an establishment even for the simplest jobs cost something in time
and output. Of course the jobs requiring most skill are most expensive to fill. The
employment manager was created for the purpose of cutting down the cost to the
employer of rapidly shifting labor forces. This new species of expert has come to
stay. His importance increases as the labor demand increases relative to the labor
The labor force of the country is employed at much less than the maximum of its
potential efficiency. By that I mean that the output of labor per man could be greatly
increased—perhaps as much as 60 per cent—by a rational system of management,
which would give due regard to the worker’s health and safety. Such a system
of management must necessarily depend upon the cooperation of the employees with
the employers.
Leaving out of account all considerations other than the maximum output of prod­
uct, a proper system of labor management would provide for workers ample time and
facilities for rest and healthful recreation. Wages must be sufficient to provide the
workers with needed food, clothing, shelter, and fuel to maintain health and strength
at the maximum. Economy of consumption, that is, the art. of spending the dollar
wisely, is even more important than economy of production, or the art of earning the
dollar. Employers, working as citizens, can do much to develop and improve in their
workers the art of getting 100 cents, worth of utility for every dollar paid in wages.
All this has nothing whatever to do with speeding up machinery, cutting down
piece rates, working longer hours, and the like stock methods of trying to increase
output per man per day and per dollar of wages. It has rather to do with shortening
the working-day, providing rest periods at convenient intervals, advancing piece and
time rates, cutting out all overtime, re-creating in the employee an interest in the
job he is doing, and helping him to get the^most out of his earnings and his leisure.
The addresses and discussions contained in this report show that the employers
and employment managers in attendance at this meeting realize the importance of
the employment problem and manifest real industrial statesmanship in attacking it.
The evils of the modern industrial system in its effects upon the workers have been
comprehended by but few employers and by them only recently. The first associa­




tion of these new industrial statesmen, the employment managers, was formed only
about five years ago. To-day there are associations in 10 cities, Boston, Chicago,
Cleveland, Detroit, Newark, New York, Philadelphia, Pittsburgh, Rochester, and
San Francisco. Membership is by no means confined to firms in the cities named.
The Boston association, for example, comprehends the most important ind.ustrial
centers in New England. About 1,000 industrial companies are enrolled as members
in the 10 associations named. At the Philadelphia meeting about 500 representatives
of the 10 associations and others interested in employment problems were present.
This indicates a most encouraging degree of interest. At this meeting a National
Employment Managers’ Committee was appointed, consisting of the following del­
egates: Chairman, Joseph H. Willits, secretary Philadelphia Association for the
Discussion of Employment Problems; vice chairman, John C. Bower, secretary
Pittsburgh Employment Managers’ Association; secretary-treasurer, Ralph G. Wells,
secretary Employment Managers’ Association of Boston; Mark M. Jones, president
of the Newark Society; C. L. Miller, secretary Employment Managers’ Group, De­
troit Executives’ Club; W. H. Winan, Employment Managers’ Group, Manufac­
turers and Wholesale Merchants’ Board, Cleveland; Dr. E. B. Gowin, New York
Society; C. R. Beard, Chicago Employment Advisers’ Club; Lewis B. Ermeling,
Rochester Employment Managers' Group; F. Dohrmann, president of the San Fran­
cisco Society.
This committee met on the 17th day of May, 1917, at Rochester, and decided that
its purpose should be to bring about a closer cooperation between organizations
devoted to the study of employment problems, to arrange for national conferences,
and to assist in the interchange of reports of meetings, investigations, and informa­
tion of interest to local associations. It was decided not to form a national associa­
tion as yet, although if the movement continues to grow such a step will probably
be taken shortly.
That these local organizations will prove permanent can hardly be questioned in
view of the interest which is continually increasing among responsible employing
concerns in problems of personnel. What the effect of these associations will be on
labor is difficult to predict. By enlightening selfishness they will undoubtedly serve
to improve the physical and mental conditions of employment. At present, unions
are not discussed in the meetings. There is no pooling of interests in case of strikes,
however, as in some other employers’ associations. Whether these new associa­
tions formed with a new purpose and made up of men with a new point of view will
be the means of bringing together organized labor and organized employers remains
to be seen. The accomplishment of this result calls for the highest type of indus­
trial statesmanship.
Commissioner of Labor Statistics.


WHOLE NO. 227.

W A S H IN G T O N .

OCTOBER, 1917.



[The session was called to order at 9.30 o'clock a. m. in Houston
Hall, University of Pennsylvania, by the chairman.]
The C h a i r m a n . It is my honor and privilege to greet you to-day
on behalf of the organizations which have united to hold this national
conference in Philadelphia.
While we appreciate the honor you have conferred upon us, we
likewise realize the responsibility placed upon our shoulders. Em­
ployment management is*in its infancy, and yet is such a lusty infant
that no previous record of growth would be of any value. This is due
largely to the pioneers in the study of employment problems. I have
never met in any other business gathering such public-spirited
men. They are not only glad but anxious to pass along to others the
results they have achieved. That is what has been responsible for
the growth of employment management. I am very glad indeed to
pay my tribute publicly to those disinterested men.
I do not propose to take up your time with platitudes, because I
feel that this is, first and last, a business conference, and to accom­
plish in two days the work we have laid out means concentration and
“ getting down to brass tacks.”
The solution of employment problems is of the greatest importance
to the individual, but in times of stress such as those through which
we are now passing it is of even greater importance to the Nation.
I bid you welcome, with the earnest hope that you will find the
meetings full of interest and that you will all take home with you
more than you bring.
Philadelphia has many institutions of which it is justly proud, but
one stands out from the rest like a beacon in the night—the Univer­
sity of Pennsylvania. She is Philadelphia's pride and open boast,




standing behind every movement either civic or national for the
benefit of humanity.
We are honored to-day by being her guests, and I take great pleasure
in introducing to you Dr. Edgar F. Smith, provost of the University
of Pennsylvania, who will bid you welcome.

I am indeed very happy to have this opportunity to say a few
words to you. You of course know—that goes without discussion—
that you are welcome here in this university, because this ancient
foundation was here before we had a State, before we had the United
States; and the purpose of its founding was that it might be of service
to those who lived here in this colony and in adjacent colonies, and,
as your president has just remarked, the university through all these
years, from its beginning down to the present, has been quite ready
to serve in any way possible. Your secretary, Dr. Willits, explained
to me some weeks ago what you were as an organization; he pointed
out your connection with our work, and indeed the longer I live the
more firmly am I convinced that there is nothing that is done in a
university like this that is not of consequence in the great affairs of
life. I remarked to your president a few moments ago that every
member of the graduating class this year connected with one of the
technical courses has already been looked upon by a manager or by
managers. They come here from the Westinghouse, the General
Electric Co., from all sorts of plants over the country, to see what
these boys are like, to inquire as to what they have been doing here,
and then to determine for themselves whether there is a place in their
establishment in which they will fit. All are engaged. That, to my
mind, is evidence that we are doing something here which you men
who are out in the busy world can utilize, and the university is there­
fore quite ready to be of service to you.
My own position is, briefly, this: Whatever may be of good to this
community, to the State, or to the Nation, our university wants to
assist in. And, as I learned from your secretary, and again this
morning from your president, you, in a certain sense, have come
together to make it easier for these lads whom we are preparing to
enter into their life work, because hundreds and thousands of them
will go into business of one kind or another; and, of course, if that
is your purpose we are in hearty accord with you. In any way you
can use us, we stand ready. When the call comes, we will endeavor
to answer.
It is interesting for me to come here on this platform from time to
time and say a word of welcome to the various organizations that



come out to us. It has really been an eye opener to me. It has
shown me in how many thousands of different ways we are of conse­
quence. We are teaching old things, but we are teaching new things,
and the new are just as interesting to us as the old. The new are
with us; we are a part of them. We can look upon the old only as
giving us that experience which we need to have in every business or
calling in life.
But I, like your president, do not want to delay the real business
of this important meeting, and so with these few words, and the
assurance that the University of Pennsylvania as a whole welcomes
you most heartily, I shall bid you good morning.
The C h a i r m a n . During the early stages of employment manage­
ment very little was known in a general way as to what certain men
were trying to do and what they had found. As a matter of fact?
employers were generally quite skeptical. They looked upon it as
more or less of a fad. However, the pioneers of the movement knew
that they had placed their hands on an economic problem that
affected every one, whether worker or employer. The trouble was,
however, how to get the message across. One man realized that
there had to be some concerted effort and figured that the best
way of spreading the truth was by the formation of local associa­
tions. I can remember when we were first called together to discuss
the advisability of forming an employment managers’ conference in
Philadelphia. It is safe to say that 75 per cent of the men in the
early meetings were skeptical. This man came, outlined what had
been done, what could be done, and what was our duty to the com­
munity, to our employees, as well as to our stockholders. It is a
pleasure to introduce to you Mr. Meyer Bloomfield.


The Employment Managers’ Association movement— and it is a
very real, a very live and important movement—the existence of the
employment managers’ movement is due to the fact that long before
some of us, at least, thought of what that problem and its answer
meant, there were successful examples of good employment manage­
ment. We were so fortunate in Boston as to find at the very outset
heads of large industrial establishments instantly responding to an
invitation to send their employment executives to a preliminary
.meeting for the formation of such an association. Some of them,
I am happy to say, we shall hear from in the course of this conference.
Employers in Boston and in the vicinity of Boston responded
sympathetically, although at that time they had to take some of us
on faith. They were willing to have the experiment tried. What wras
the experiment ? In a word, it was simply this—and I believe it is
the underlying thought in any employers’ association, whether it be
called an employment managers’ association or a society for the study
or discussion of employment problems, or an executives’ club, or an
employment advisers’ club (I am rather glad to see a large variety
of names given to the same type of association; that in itself repre­
sents progress)—the underlying thought is that the handling of human
beings in the economic relation of employer and employee is a pro­
fessional job, it is a job worthy to be given to one of the best paid,
one of the best trained, one of the most responsible, one of the most
respected executives in an organization. In other words, one of the
main thoughts, if not the main thought, underlying the employment
management associations is the fact that it takes brains and soul to
deal with help, with colleagues, with coworkers.
Now, if that be granted as a premise, you will see how many
important implications flow from that thought. First of all, it lifts
the process of selecting and hiring help from that of a subordinate,
incidental, relatively nonproducing aspect of organization to one
which might be described as that of pumping lifeblood into an estab­
lishment. There is very interesting testimony in the records of the
Philadelphia association, the Boston, the Newark, the Detroit, the
Chicago, the New York, the San Francisco, and other groups. I,
myself, when listening at meetings in these places, have heard state­
ments made and conclusions pronounced to the effect that the very
output of an organization has been affected by the quality of the
employment service. There is an unbroken chain in the whole
scheme of management, there is cause and effect, a string of
sequences which that discovery or that pronouncement confirmed.




Anothsr implication is that the quality of the men, their thoughts,
their aims, their ideals, their ambitions, their outlook, their attitude,
their loyalty, their good will, all are tied up with this question of
employment management. The moment you apply the lens to any
of these factors in industrial relationship you see the connection and
the order of these qualities and how logically they come under
a conception, a well-thought-out policy, as regards the hiring, the
assignment, the supervising, the training, the transfer, the promotion,
or the letting go of help.
Now, each of these items could be so analyzed as to present a
program of duties and work under subdivided headings, and because
of that there needs to be a charting, a blueprinting, and a crystallizing
of these functions somewhere so that some well-trained, broadvisioned, responsible executive may interpret and execute and dem­
onstrate the details of the work that can not any longer safely be
distributed among a variety of executives.
Now, the most dramatic illustration of this point I have encoun­
tered since the movement began was a recent meeting of a large
corporation, which for the first time in its history brought together
foremen (600 of them) as well as managers from all their plants
throughout the country. A dinner was arranged, paper and pencils
given out, and one whole long session was devoted to questions,
answers, and discussions, all for the purpose of enlisting the 600 fore­
men and 40 managers under one personnel policy. The thought w~as
to enlist the smallest executives as well as the largest, to have real
coordination among all the executives.
That was the personnel scheme carried out on a generous, bigvisioned, and, I am happy to say, a most successful scale.
What started merely as a tentative experiment, looked upon by
some with misgivings, has quickly won over every important execu­
tive, from the president down, to the idea that personnel management
means, first, clean functionalizing in one place where all this stream
of influence may be understood and charted and interpreted, and
then bringing into tlikt scheme anyone who has anything to say over
anyone else in an organization.
That is another record of progress in the employment managers'
And now, from that experience, and from other significant happen­
ings, as described by members of this active association in Philadel­
phia, and by active workers and thinkers in the field elsewhere, there
is going to be a series of specialized organizations in connection with
the employment managers' movement, so that the appropriate train­
ing, the appropriate programme, the appropriate relationships, all
down the line of management may take place to the point where
every employee is respected and built up sufficiently to be regarded



as a voice, as an individual, as a personality, as a factor in good
That is the problem before the personnel manager—how to make
every individual within the establishment count, contribute, and
incorporate himself and his thought in the policies and in the ideals
of the organization.
Now, that is a social task as well as good business, I am happy to
say, and it means that industry, the captains, the leaders, the con­
trollers of economic tools, are planting a larger partnership, are
planting for cooperation, are learning that only as you enlist the will
as well as the body of everyone on the pay rolls, do you begin to
have real organization.
This is happening. There are plenty of good illustrations, and but
for embarrassing some of our friends here this morning I should single
them out and point to them as our teachers of what is what in good
personnel administration.
At this moment of crisis those who direct and have something to
do with the channels of help are occupying not only a strategic posi­
tion, but one calling for the utmost insight, imagination, and con­
structive vision. Years before we had thought that such an emer­
gency might arise as may be announced at any moment to-day, you
gentlemen in the employment association were mobilizing in a social
way, seeking ways of stabilizing and upbuilding and welding the
units which make an organization. I think a certain amount of war
preparedness is represented by the employment management asso­
ciations of the country, and it is our hope that those who have given
thought and time, as you gentlemen have given, may be among the
foremost with constructive suggestions, on how best to unite a country
in the protection of its ideals, and the fulfillment of its destiny.
The C h a i r m a n . In the early stages of employment management
one of the handicaps seemed to me to be the idealistic presentation
of the subject. That was a good thing from the community stand­
point, that was a good thing from the humanitarian end, and while
undoubtedly that makes a very strong appeal, I believe with the man,
however, who said that if you could reach a man's heart through his
stomach you could likewise reach it through his pocketbook, and it
is a pretty short cut. One man saw that men wanted to know why
they should do this, why there should be employment departments.
The answer was that that is the right way to do it, it is the economical
way; doing it any other way would cost you money. Following
along that line he made a study covering practically the entire coun­
try, and he produced facts as to the actual cost of hiring and firing
that were startling to the average man. This man is with us to-day,
and I take pleasure in introducing Mr. Magnus Alexander, member
of the executive staff of the General Electric Co., which employs
70,000 employees.


“ Mr. Employer,” I said some four years ago to a man who told
me that he was then giving employment to approximately 6,700
people, or to about 800 more than he had employed at the same time
in the previous year, “ I would like to know how many people you
had to engage to bring about the increase in your force.” He
looked somewhat blankly at me, admitted that he did not know,
but thought that he had surely engaged many more persons than
actually was necessary. Upon being pressed for at least an approxi­
mate guess, he ventured to say that he might have engaged fully
2,000 persons in order to increase his working force by about 800.
He was nonplused when later on he ascertained the actual figures.
“ Mr. Employer,” I asked another man who was at the head of
one of the most efficiently managed factories in the United States,
who had for years maintained an almost steady force of between
900 and 1,000 employees and who, as a matter of fact, employed at
the time of my inquiry some 50 persons less than a year before,
How many persons did you engage to practically maintain your
working force?” “ Oh, I don’t know,” he said, “ but it seems a
darn shame that, whereas I reduced rather than increased my
force, I had to keep an employment man and an assistant busy inter­
viewing, hiring, and firing people.” When he looked into the actual,
status of affairs he also was mortified to learn the real conditions.
“ Mr. Employer,” I asked several managers of other factories,
“ how many did you pass in and out of your employment during the
last year in which you effected a substantial increase in your working
force?” Each of them knew that he had engaged large numbers,
too large each one thought, but when I asked for approximately
correct figures, and particularly when I asked them to express in
dollars and cents the economic waste involved in the transactions,
each could only vaguely state that there must have been a very large
sum of money thrown away.
And so I went to many other employers in various sections of the
country, making the same inquiry, but getting the same indefinite
answer. These industrial managers had not focused their minds on the
problem. They instinctively felt that there had been an unnecessary
economic waste but evidently did not realize its real extent and nature.
This experience led me in 1913 to begin a study of the problem of
“ hiring and firing.” My inquiry sought to find and analyze the




factors that enter into the problem in order that I might offer prac­
tical suggestions forremedial action. To this end I secured pertinent
data from managers of large, medium-sized, and small establishments.
I confined myself to inquiries in the metal industry, with which I
was more familiar, and because I had personal acquaintance with
managers in this branch of industry from whom I could secure con­
fidential data on a comparable basis. I requested employment
statistics for the year 1912 because it was the last industrially normal
year; during 1913 a business depression set in which became accen­
tuated during the early part of 1914 but later gave way to a period
of great prosperity, from which we have been suffering, industrially
speaking, for over two years and from which there may be a rude
awakening when this war shall have reached its end. While it may
seem like going back a long distance to speak at this time of the
conditions in the year 1912, I am sure that the story of 1922 will
duplicate the story of 1912 unless we read the lesson of the latter
During a study trip to Europe in the summer of 1913, an oppor­
tunity offered itself to secure first-hand information on the same
subject in English, French, German, and Austrian factories. One
would certainly expect to find in these older countries of more or less
settled industrial conditions greater stability of employment than in
the newer United States of America, where industrial conditions are
constantly in a flux of legislative, social, and economic readjustment.
Contrary to expectation, however, I found in prominent European
factories a condition indicating as great an economic waste in hiring
and firing employees as seemed to prevail in American industrial
establishments of comparable size and character.
In presenting to you some pertinent aspects of the problem I will
not trouble you with all the details of the investigation, except to
indicate with sufficient clearness the method employed in the study
of the problem, as a guide to those who may want to make similar
investigations in their own plants, and as a basis for checking the
accuracy of my conclusions. I shall not disclose the sources of the
information herewith presented, because all information was given in
confidence to be. reported only in the aggregate. I also wish to say at
the outset that I have introduced mathematical short cuts into the
calculations on the ground that, after all, we are concerned with the
tendencies and general character of the employment situation, and not
with exact numerical values in any particular situation at a particular
time. The exact situation would not be duplicated in any other set of
factories and would not even occur in the same factories at any other
period. This obviates the necessity of tracing the daily change in
the labor force and simplifies the mathematics of the investigation.



From the factories under investigation I have selected for pre­
sentation a group of 12 which seemed to me to be representative by
reason of their size and character. These factories were located in six
different States in the eastern and middle western sections of the
country; some employed only men, others employed men as well
as women. Some were engaged in manufacture of heavy apparatus,
such as big steam engines and electrical apparatus; some produced
medium-sized apparatus, such as machine tools and automobiles;
while the chief products of others were small, such as measuring instru­
ments and incandescent lamps. The largest of these factories had
more than 10,000 employees on its pay roll, while the smallest
employed regularly less than 300 persons. The composite picture
represented by these 12 factories reflects, therefore, average indus­
trial conditions. Moreover, there was nothing unusual in respect to
efficiency of management, availability of labor, rate of wages, or
controlling legislative considerations.
It would have been an easy task to select only factories in which
employment conditions were essentially bad and, by grouping these,
to present a very somber picture. In following this policy, however,
I would no doubt have failed of my purpose in interesting employers
in the economic side of the employment problem, for they would have
been diverted from, rather than attracted to, a study of the situation
that by the very nature of its extremeness depicted an unusual con­
dition. It is by such presentation of true but unusual conditions, and
by generalization based thereon, that well-intentioned academicians
in the field of industrial economics, social workers, as well as pro­
fessional muckrakers, usually fail to accomplish sought-for improve­
ments. They arouse temporary attention by their sensational state­
ments, but do not clinch the interest of responsible persons.
The information gathered in the 12 factories and herein given in
the aggregate shows the number of employees on the pay roll at
the beginning and at the end of the year 1912, the number engaged
and discharged during the year, week by week, and the number of
reengaged persons who had worked in the same factory on one or
several occasions. The latter item was secured on the assumption
that it would usually be less expensive to hire a previous employee
than to bring in and train an entirely new one This segregation
showed that 72.8 per cent of all people engaged during the year 1912
were entirely new to the factories for which they were hired, and that
27.2 per cent had worked in these places once or several times before.
In a general way this ratio of four new employees to one rehired will
be found to hold good, at least in metal-working industries.
In the group of 12 factories under investigation there were 37,274
persons employed at the beginning, 43,971 at the end of 1912, or
40,622 on the average. The net increase was 6,697 persons, since



during the year 42,571 persons had been hired, and 35,874 had
dropped out of the employment.
In other words, about six and one-third times as many people had
to be engaged during the year as constituted the permanent increase
of the force at the end of that period.
Several reasons might be given in explanation of this condition.
Peculiar local labor conditions, the completion of a temporary
piece of work such as the building of a structure, or unusual condi­
tions of employment on account of a high fluctuating production,
might have influenced the labor situation.
The important fact, however, stands out that 42,571 people had to
be engaged during the year in order to increase the working force by
only 6,697.
Theoretically only as many people ought to have been hired as were
needed permanently to increase the force. Practically, certain allow­
ances must be made in order to view the problem in its correct light.
These allowances must cover: (a) The replacement of employees who
die; (&) the replacement of employees on prolonged sick leave for
whom others must be substituted temporarily or permanently; (c) the
replacement of employees who, although selected with good judgment,
are found to be unsuited to the work, or who leave of their own accord
for one of many reasons; (d) the engagement of extra employees
required for short periods, on account of temporary work or high
peaks of a fluctuating production; and (e) the fact that no employ­
ment department can be run on a 100 per cent efficiency basis.
It may be assumed that annually, among all employees, 1 per cent
die; 4 per cent are sick for sufficiently long periods to necessitate
their replacement temporarily or permanently; 8 per cent withdraw
from service for unforeseen or unavoidable reasons, or are discharged
for justifiable causes; 8 per cent are temporarily needed on account
of normal fluctuation of production; and 80 per cent constitute a
readily attainable efficiency of an employment department.
These figures can be supported by the following considerations:
The average age of employees in the factories under consideration
was found to be 31J years for male and 23 years for female em­
ployees. For these ages mortality tables place the death rate of
male employees at 8.5 and of female employees 7.95 in each thousand.
On the other hand, the experience of several mutual-benefit associa­
tions in factories, some extending over a period of ten years, re­
vealed that about 7 in every thousand members had died annually.
These statistics, therefore, justify the assumption that death re­
moves annually not more than 1 per cent of factory employees.
Ascertainment of the annual rate of absent persons who are in­
capacitated for work for definite periods by sickness is not so easy
a task. Reliable, comprehensive data are not readily available in



this country, and the extensive experience of Germany must be
taken with due allowance when applied to American conditions.
Recognizing, however, the prevailing custom in many factories not
to replace, even temporarily, employees whose incapacity does not
extend beyond two weeks, provided the fact of their sickness is
known to the management, and relying in part on available sta­
tistics and in part on the judgment of industrial managers, an assump­
tion that four in every hundred workpeople are incapacitated for
more than two consecutive weeks in a year, and must be temporarily
or permanently replaced, would liberally reflect actual conditions.
As to the number of people who are annually separated from the
service for reasons other than that of death or prolonged sickness,
no reliable figures seem to be available. According to the United
States Civil Service Commission, however, 8 per cent of all Govern­
ment employees are separated from the service annually for various
reasons, including death and sickness. With due allowance for the
difference in employment conditions in Government and in private
service, the former being more favorable to stability in service than
the latter, it may be fairly assumed that 8 per cent of private em­
ployees are separated annually from the service by voluntary or
involuntary resignation, except on account of death or sickness, or
as much as in the Government service for all causes.
Another difficulty arises when estimating the effect which a nor­
mally fluctuating production should have on the required number
of employees. Opinions in this respect differ widely, and there is a
very marked difference between the fluctuations of employment
from this source in various industries and even in various establish'ments in the same industry. The conviction is making itself felt
among employers that in most businesses the prevalent erratic curve
of production can be turned into a more even wave line. Interest­
ing evidences are at hand to show the wholesome effect of welldirected effort in this field. It must not be overlooked in this con­
nection that fluctuations in productive requirements will have
different effect on the various classes of employees. Highly skilled
mechanics and clerks will usually feel the effect last, and then to a
smaller degree than the great body of operatives who have no special
skill or knowledge. The opinion of many men who were consulted
seems to center around the assumption that an annual temporary
engagement of about 8 per cent of the total working force will be
necessary to allow for normal fluctuations of production.
Finally, in regard to the efficiency of an employment department,
it should not be difficult to attain an efficiency of at least 80 per cent
in this highly specialized branch of service, with but a very limited
103021°—17—Bull. 227------ 2



Applying these factors to the problem in hand, it follows that
while theoretically only 6,697 persons should have been employed
during the year to allow for the increase of the working force by that
number in the factories under consideration, the additional engage­
ment of 13,843 persons, or a total engagement of 20,540 persons,
could be justified.
Yet the statistics show that 42,571 persons were engaged during
the year, whereas the engagement of only 20,540 could be defended
on even liberal grounds. Therefore 22,031 persons were hired above
the apparently necessary requirements.
It is obvious that a considerable sum of money must have been
wasted in the 12 factories by unnecessarily hiring so large a force of
men and women as has been shown. In order to make this picture
more lucid, let us give monetary values to the figures here presented.
What does it cost to “ hire and fire” an employee?
No reliable investigation of this cost item seems to have been
made, and the opinions of industrial managers differ widely. One of
many managers consulted placed the figure at $30, all others sug­
gested from $50 to $200 as the cost per employee. The great dif­
ference in the estimates is explainable on the ground that these
managers represented a great variety of industries; the fact that
they had not heretofore given this matter careful thought accounts
also for the variety of their opinions.
One machine-tool builder estimated a cost of $150 per employee;
the president of a large automobile manufacturing concern placed
the figure at $100, while another manufacturer who employs much
female labor maintained that the cost of hiring and firing an employee
would run as high as $200 in some departments.
Unquestionably, the skill, experience, and intelligence of a new
employee have much bearing upon the amount of money necessary
for his training. Another important consideration is whether the
new employee is working on expensive or low-priced machinery or
with high or low-priced tools, or on expensive or cheap materials;
and to a certain extent wThether or not he has heretofore been em­
ployed in the same shop and particularly on the same class of work.
With this thought in mind I subdivided the employees under
investigation into five groups and studied the requirements of each
group as to the quantity and quality of required instruction for new
employees and the effect of the work of new employees upon the
economical conduct of the business. The division was:
Group A.—Highly skilled mechanics who must have practiced
their trade for a number of years in order to attain the required
degree of all-round experience and proficiency.
Group B.—Mechanics of lesser skill and experience who could have
acquired an average degree of proficiency within a year or two.



Group C.—The large number of operatives usually known as
pieceworkers who, without any previous skill or experience in the
particular work, can attain fair efficiency within a few months, some­
what depending on the character of the work.
Group D.—Unskilled productive and expense laborers who can
readily be replaced in the course of a few days.
Group E.—The clerical force in the shops and offices.
The distribution of the employees in these five groups was found
to be as follows, assuming that 73 per cent in each group were newly
hired and 27 per cent were rehired employees:
Number of employees.

Increase. employees.


D...................... : ........................

Number of engagements.

37,274 j

2 ,369 i
561 1
6,697 j

4, 583
30,991 |



As to the number in each group of apparently unnecessarily hired
employees, allowances would have to be made for the fact that while
the same mortality and sickness rate and the same employment
efficiency could be considered to hold in all groups, the rates of
withdrawal by resignation and discharge and the effect of a normally
fluctuating production would vary for each group. On the one hand,
skilled employees are usually more steady and will give less cause
for discharge than ordinary pieceworkers or expense laborers; on the
other hand, all-round mechanics will be retained under normally
fluctuating production, while pieceworkers and expense laborers will
more or less immediately feel the effect of such fluctuations.
Using short-cut methods, it was found that the apparently unnec­
essarily engaged 22,031 persons could be divided as follows:

Number of engagements.

Rehired !
employees. employees.






The next task was to find for each group the principal items of
cost of employment and they were considered to b e:
(a) Clerical work in connection with the hiring process.
(b) Instruction of new employees by foremen and assistants.
(c) Increased wear and tear of machinery and tools by new em­
(d) Reduced rate of production during early period of employment.
(e) Increased amount of spoiled work by new employees.
(/) Greater accident ratio among new employees.
This does not consider reduced profits due to a reduced production,
nor investment cost of increased equipment on account of the de­
creased productivity of machines on which new employees are being
broken in.
The hiring expense applies to all groups of labor to about the
same extent. It consists of interviewing applicants, taking their
records, making out their engagement cards and other necessary
papers, and placing their names on the pay-roll books; sometimes
also advertising and traveling expenses will have to be incurred.
Reduced to the cost per individual, an expense of 50 cents for each
employee should be a fair estimate.
The instruction expense, on the other hand, will vary largely
according to the experience and skill of the new employee and the
nature of his work. It will be lowest for Group D and highest for
Group C employees, for the latter must be instructed most and
watched longest. The expense for Group B employees will be nearly
as large as that for Group C employees, not because they need as
prolonged supervision, but because higher-priced foremen will have
to give the instruction. Considering the quantity and quality of
required instruction, this expense may be assumed to be for each
new employee: In Group A, $7.50; in Group B, $15; in Group C,
$20; in Group D, $2; and in Group E, $7.50.
The value of increased wear and tear of machinery and tools by
new employees is difficult to estimate. It will be little, if anything,
for Groups D and E employees, for whom it may be presumed to
be $1 per employee, while it may reach thousands of dollars for
damage to expensive machinery used by Groups A, B, and C em­
ployees. Any estimate must necessarily be a guess; averaging it for
employees working with and without machinery, it may be assumed
as $20 for each employee in Groups A, B, and C.
The loss due to reduced production is entirely dependent upon the
value of the article produced and the experience and skill of the
employee required for its production. It will be lowest for Group D
employees. It can be estimated with approximate correctness for
other employees by considering their average wages and the average



loss of productivity during their initial period of employment.
It is herein assumed that Group A employees would receive an aver­
age wage of $25 per week and would lose in productivity 25 per cent
during the first, 15 per cent during the second, and 5 per cent during
the third week of employment. Similarly, Group B employees with
average wages of $19 per week would lose, respectively, 35 per cent,
25 per cent, and 10 per cent per week; Group C employees with
$14 average weekly wages would lose, respectively, 60 per cent,
35 per cent, 20 per cent, 10 per cent, and 5 per cent per week; Group
D employees with $10 average weekly wages would lose 25 per cent
and 10 per cent per week, and Group E employees with $14 average
weekly wages would lose, respectively, 50 per cent, 30 per cent, 20
per cent, and 10 per cent per week.
Figuring overhead charges as 75 per cent of wages for Groups A, B,
and C men and 40 per cent for Groups D and E men, the loss may
amount to $21.50 for each Group A, $23.30 for each Group B, $31.80
for each Group C, $5 for each Group D, and $21.50 for each Group E
The expense due to spoiled work will similarly vary with the value
of the raw material worked upon and the labor expended in such
work. Spoiled cast-iron parts may mean little waste; spoiled gold
leaf may cause a considerable money loss. Averaging the situation,
practically nothing may be lost by Groups D and E employees,
while the loss may be assumed to be $10 for each Group A, $15 for
each Group B, and $10 for each Group C employee.
Finally, it is well known that new employees are more liable to
injury by accident than persons familiar with the work and methods
of a factory. This extra expense for medical service and compensa­
tion payment may be estimated as averaging $3 per employee.
These cost items must be reduced materially when they are applied
to rehired employees. The cost of training old employees will, of
course, be smallest when these employees are put back on the same,
or on similar work to that on which they were engaged before they
left employment in the same factory. Many rehired employees,
however, are put on entirely new work, and their training will there­
fore involve an expenditure which will more or less approximate
that needed for the training of entirely new employees. On a con­
servative assumption, the cost of hiring and training rehired em­
ployees may be placed at $10 for each Group A, $20 for each Group B,
$35 for each Group C, $5 for each Group D, and $10 for each Group E
employee. The respective totals of the various cost items above
outlined are shown in the following tabulation.




Wearand Reduced
Hiring. Instruc­
tear. produc­
. 50

$7. 50
20. 00



21. 50




11. 50



It will be seen that the average cost of hiring and firing has been
assumed to be only $53.92 for each new employee and $16 for each
rehired employee, or only $44.44 for each hired employee on the basis
of three new employees to each rehired person.
When these values for each group are multiplied by the number
of supposedly unnecessarily engaged new and rehired employees in
each group, the result shows that the apparently unnecessary engage­
ment of 22,031 employees within one year in the 12 factories under
investigation, employing an average of 40,622 men and women,
involved an economic waste of $993,767.50. This sum will amount
to considerably more than a million dollars if the decrease of profits
due to a reduced production and the increase of expense on account
of an enlarged equipment investment are taken into consideration.
It may be well to reflect that the total annual pay roll of the 12
factories was nearly $29,000,000 and that the economic waste of
approximately $1,000,000 on account of faulty hiring and firing
represented nearly 3J per cent of the pay roll.
If the experience of the 12 factories were assumed to be typical of
all manufacturing industries of the country, the national economic
loss from hiring and firing employees would amount to approximately
$172,000,000 annually, based on number of employees; $187,000,000,
based on capitalization; and $248,000,000, based on total sales.
The important question immediately arises, How can this economic
waste be avoided in future ?
There are many ways of improving the situation, but there is one
fundamentally necessary way without which no lasting improvement
can be obtained. First of all, high-grade men must be placed in
charge of employment departments as employment executives, and
they must be given adequate authority within their own sphere and
in conjunction with the other executives of the establishment.
Special capacity is needed for the task of selecting and placing men
and women. It requires persons of impressive personality and high
moral character, of intimate knowledge of industrial requirements,
and preferably with practical industrial experience, firm in action
yet suave in manner, but above all else with a thorough knowledge



of human nature. The remuneration for such service must of
course be adequate to attract high-grade persons. The employment
executive should be considered second in importance to no other
assistant of the works manager and at least equal in importance to
the superintendent in charge of production. His character and
capacity should eminently qualify him for the important managerial
task of bringing into the factory the right kind of human raw material,
and of seeing to it that the recruits are rightly used and properly
stimulated to become effective and efficient parts of the human
machinery, whether they perform skilled or semiskilled work or tasks
of ordinary character. Moreover, it should be one of the functions
of the employment executive, in conjunction with the superintendent
and his foremen, to make the new employees reasonably contented
while in the service and to assure them that they will not be dis­
charged except for good and sufficient reasons.
With a competent man as employment executive, a rule could and
should be enforced under which no foreman or superintendent would
have authority to discharge an employee from the service of the cor­
poration, although he would have the right to suspend any employee
from work in his particular department, pending further investiga­
tion. Inasmuch as the employment executive would hire all em­
ployees, he should also be the only man who could fire employees.
He would of course be an unwise man if he should take any step in the
exercise of this authority that would undermine a foreman’s or super­
intendent’s disciplinary influence or would otherwise prove detrimental
to efficient service. On the contrary, because of his sole authority to
fire employees, he should exert a strong influence over the various
executives in the organization so that they would always treat their
employees with patience and justice, and particularly so when consider­
ing termination of their employment. On the other hand, employees
recommended for discharge should have an opportunity to state their
cases to the employment executive as an impartial judge, either to
receive justice at his hands if injustice had been done them by their
immediate superiors, or to be clearly shown by him wherein they were
themselves responsible for termination of their employment. And ifc
stands to reason that employees discharged under such circumstances
would leave the service with less ill feeling toward the employer than
would otherwise exist because of their unchecked belief that they
had been unjustly treated.
There is an additional important advantage in centering authority
for discharging employees in the hands of the employment executive,
for he is in a position to make impartial investigations of the reasons
leading to discharges which may reveal that the fault was as much
with the management as with the employee. The latter may have the
required knowledge and disposition for the work and yet the condi­



tions in his department may be operating against him; he should be
saved to the organization by being put into another department,
when this is practicable, where he could and likely would develop
into an efficient and faithful employee. Or a man of usefulness in
certain directions may prove of comparatively little use because he is
placed by the management in the wrong position; he is a round peg
and the management has tried to fit him into a square hole. Of
course he does not fit. But that does not mean that it is best to dis­
pense with his services altogether, for there may be round holes in
other parts of the factory into any of which he would fit nicely and
which are now either disadvantageously filled with square pegs or left
altogether unfilled, while round pegs for them are being sought.
Without centralized authority in respect to hiring and firing, the
foreman of one department may not, in the nature of things, know of
the men who could or would be made available by the foreman of
another department, and who could fill his requirements and should
be utilized for that purpose. If all engagements and discharges were
directed through the employment executive, the latter would be in a
position to make such transfers, as above referred to, when advisable.
Transfer of an unsatisfactory employee from one department to
another of the same establishment should of course be made only
when it does not tend to undermine the disciplinary authority of the
foreman or superintendent of the first department. By such justi­
fied transfers, however, a great deal of the otherwise occurring eco­
nomic waste of hiring and firing would be avoided and a great amount
of good will on the part of employees and the community at large
would be gained.
Finally, the important fact must not be overlooked that a foreman
who knows that his right to discharge an employee in his depart­
ment is limited to temporary suspension of such employee and that
his action in the matter will be subject to the scrutiny of the employ­
ment executive, will use all due care before exercising his right of
suspension. Personal feelings with unjustified bases and racial or
other prejudices which now influence some foremen in dispensing
with the services of employees will then disappear as factors in
determining the value of employees. A better cooperation between
foremen and employees under them will result, in which partnership
between a worker of higher disciplinary rank and a worker of lower
rank will take the place of the master and man relationship. .
Yet the employment executive's task should not be considered
complete when he has brought good men and women into the em­
ployment. Important as it is to select the right persons for the right
places, so that a square peg is placed in a square hole and a round
peg in a round hole, it is even more important to take proper care of
these men and women as soon as they enter upon their work. The



best and most competent person can be so discouraged by wrong
initial treatment that his usefulness will be impaired, and either
he will leave his employment or his discharge from it will become
advisable, while even an ordinary person can often be made a very
contented and useful economic unit by right guidance and instruction.
This at once suggests that a satisfactory employment situation
requires that adequate methods be devised and practiced under
which new employees will be properly taken care of, both as men and
women and as workmen and workwomen.
To accomplish good results in the one direction may sometimes
mean the establishment of so-called welfare schemes, ought always
to mean the maintenance of safe, sanitaiy, and wholesome work
conditions, but above all else must mean an active personal interest
of the “ boss” in the men and women under his charge.
Years ago, before the development of the modern extensive factory
system, the master worked personally and directly with his few em­
ployees, and could secure quick and willing responsiveness from
them. “ John, we’ve got to finish this work by to-morrow and you
axid I must work like hell to accomplish it,” the master would then
say to his mechanic, emphasizing by a slap on the mechanic’s back
that he meant what he said. John would work like hell and finish
his job within the allotted time. Now it is often a telephone message
from the superintendent, and another from him to his foreman, and
so down the line until some minor assistant to the foreman transmits
it to the worker. Can we under such circumstances expect the hun­
dreds and thousands of modern Johns in our factories to show the
same responsiveness ? And yet we must find effective substitutes
for the old-time touch and inspiration so that even in our mammoth
establishments an unseen manager can slap a hundred or a thousand
Johns on the back and stir them to work like hell.
To secure satisfaction in the other direction necessitates that new
employees be properly instructed in their new tasks. Every factory
has its own methods of doing work, and unless foremen and their
assistants or specially delegated instructors initiate the new men
into these methods, valuable time will be lost to employer and
employee and the first opening wedge of discontent will be driven into
the newly formed relationship of the two, which may soon lead to the
employee’s lack of interest in his work and his employer, and in time
to his resignation or discharge.
The stimulating influence of the employment executive is needed
in both directions and he will exert it to the degree to which he proves
himself to be the big-sized man required for the job.
Another important step in the direction of reducing the labor
turnover in a factory is the establishment of a system of educational
opportunities for employees and for their sons and daughters, as
well as for boys and girls in general.



L A B O ti T U R N O V E R


IN D U S T R Y .

It is becoming recognized again, as it was decades ago, that the
employer has a peculiar duty to perform toward his employees and
himself as well as toward the industry, by offering to train and by
properly training the youth of the land who wish, or by circumstances
may be obliged, to choose a vocational career for a livelihood. To a
certain extent most employers take an interest in the problem of
training young people for efficient industrial service, either through
apprenticeship systems or in connection with public or private trade
schools. Most of these employers, however, have yet to learn that it
is essentially worth their while to set aside a part of their own busy
time and thought and to devote appropriate effort and financial
support for this important work.
Large factories can of course institute comprehensive self-contained
training systems. Where the factory is not large enough, or the
character of the work does not offer sufficient opportunity for the
establishment of such training systems, employers in the same
industry and the same locality can advantageously merge their
efforts into a common training system; or they can closely cooperate
with private or public school authorities toward the same end. It
stands to reason that young people trained by industry in industry
will, if they are properly trained, develop a spirit of loyalty toward
their employer and toward industrial employers in general, which
will lengthen their own period of employment and will exert a steady­
ing influence upon other employees.
Aside from well-organized apprenticeship courses for young people,
or cooperative training courses with public or private schools, there
is great need also fbr the establishment of short-time specialist courses
through which adult men and women without any particular educa­
tion or skill may be trained to perform efficiently one or more indus­
trial operations. While to a certain extent every foreman in the
course of his daily work endeavors to train new employees, I believe
there should be special instructors attached to various departments
who would systematically endeavor to develop unskilled men and
women into semiskilled and, as far as practicable, develop semi­
skilled persons into employees skilled in at least one major operation
of industrial work. By so lifting employees to a higher plane of
industrial usefulness, employers would not only advance their own
interests and reduce the labor turnover in their factories, but they
would also materially advance the interests of their employees, while
at the same time they would exert some of the best efforts for the
social advancement ot their communities.
Finally, the labor turnover in a factory and the expense connected
with it can be reduced to the extent to which the zigzag curve of
productive requirements can be smoothed into a more even wave line.
The task is fraught with many difficulties that arise from the fact



tliat after all the buying public is the real master of the situation.
The employer can, however, influence the buying public, by educa­
tional propaganda or by the offer of advantageous trade prices, to
help him in his endeavor to standardize his production so as to main­
tain a fairly equal factory output throughout the year, which in turn
would allow him to give steady employment to his people. Several
significant examples of successful effort in this direction may well
serve as encouragement for further endeavor.
Along the lines of remedy herein suggested may be found the
solution of a problem which is beginning to loom large before our
eyes and will grow in importance as international competition
grows more keen after the close of the war now raging. Early steps
should therefore be taken to check the enormous economic waste
incidental to the present haphazard methods of hiring and firing,
in order that American industries may be prepared to cope with the
impending international trade situation.
It is also important to reflect, in view of certain legislative and
administrative tendencies now affecting American industries, that
constant fluctuation in the working force of an establishment must
materially increase the difficulty of maintaining among the employees
a spirit of general contentment and of loyalty to the management.
As quicksand can not be kneaded in the hands into a solid lump,
so also will it be found difficult to take hold of an ever-changing mass
of employees and transform it into a homogeneous, intelligent, and
contented body. Moreover, this condition will tend to nullify, to
a large degree, the beneficial tendencies of many well-intentioned
efforts of employers, such as sickness and accident insurance and oldage pension systems, and other phases of industrial betterment work.
And last, but not least, the problem herewith presented offers an
opportunity for constructive work in which employers and employees
can readily be brought together for mutual benefit, for no rightthinking man, whatever his position or affiliation, can justly object
to any well-directed plan which seeks to give employees continuous
work throughout the year and to enable employers to maintain steady
Close analysis of the men and women whom we take into our
employ, effective systems under which we train them in our work,
fair treatment while they are in our service, and adequate methods
to insure their dismissal only for justified cause or their voluntary
withdrawal with no ill feeling toward their employer— these are
essential factors in a proper solution of the problem of “ hiring and
firing.” They must be our earnest concern lest we waste money in
our businesses and sacrifice friendly relationship with our employees,
without gaining advantage either to them or to ourselves.



The C h a i r m a n . In our association, at our regular meetings in
Philadelphia, we have had the benefit of the experience of some of
the best men in the country. This has resulted, to some extent,
in giving us a feeling of incompetence to speak on these questions.
One member of our executive board said one day it was appalling to
sit and listen to what the other fellow had done when we had made n o
start, and it seemed hard indeed to get a concrete expression of how
you would start. It is the detail that is necessary to be explained
in order to help men get a start. Our nex;t speaker has put out t o
my mind what is the best textbook on the employment department
I have ever seen. It will not be capable of universal application
just as it is written, but there is no doubt that you can take this
pamphlet and from it build up, whether or not you already have
such a department, a department on exactly the right lines, starting
in its elementary stages, and adding to it as you find it desirable.
I take pleasure in introducing Mr. Boyd Fisher, vice president of the
Executives’ Club of Detroit, Mich.


No one knows how much it costs to break in new men. The most
conservative estimate of any authority is $40 per man, but this, as
well as every other estimate, is, after all, only an estimate. No one
has yet used an exact cost system for recording the waste of unneces­
sary hiring and firing. I have myself prepared such a system and I
submitted it to the employment managers’ division of the Executives,
Club last September. As yet no one has put it into effect, although
several plants have promised to do so as soon as conditions warrant.
Aside from the rather careful estimates made by W. A. Grieves and
Magnus Alexander, we have only occasional flashes of evidence as to
the great cost of labor turnover.
One of the most startling evidences which has come to my attention
may be gleaned from the report of a meeting of the productionmethods group of the Executives’ Club on September 20, 1916.
Mr. J. T. B. Rheinfeldt, head of the manufacturing standards depart­
ment of the Packard Motor Car Co., had explained the methods by
which his department had rated the expected capacity of every
machine and production center in that great plant. He gave out the
information that the ideal capacity is 25 per cent higher than the
expected capacity— that is, his company has 25 per cent more equip­
ment than would be necessary to turn out the work, if it were not
necessary to allow for delays, breakdowns, and low-speed production.
I now quote from the minutes:
Mr. Beatty asked if the standard time allowed to the men were included in the 25
per cent allowance or not.
Mr. Rheinfeldt said that whenever a method was changed, a new time study was
made. The allowance of 25 per cent was a blanket to cover shortages, absence, keep­
ing the machine going, repair, etc.
Mr. Fisher asked how much of the 25 per cent was due to the turnover of labor—
that is, if there were no absence to be contended with, how much this 25 per cent could
be reduced.
Mr. Rheinfeldt said that if the labor turnover were zero, the factor could be elim­
inated entirely, as the allowance on the time study would care for the repairs, breakage
of tools and machines, etc.

Think of this for a moment. The physical equipment of the Pack­
ard Motor Car Co. is worth,.in round figures, $9,000,000. If the turn­
over of labor were reduced to zero, this huge investment could, in
Mr. Rheinfeldt’s opinion, be reduced by $1,800,000. The interest at
6 per cent on this amount of money is $108,000 per annum.




Nor is this all. •Is it not fair to assume that labor cost would also
be reduced 25 per cent if there were no turnover? If so, out of
12,000 employees, the wages of 2,400 men and supervisors, anything
from a million and a half to two and a half million dollars a year,
could be wiped out.
Now a word about the reliability of the above figures. They are
not worth very much. In the first place, Mr. Rheinfeldt may have
been in error in estimating his ideal capacity. He may have over­
stated the case, too, when he gave it as his opinion that a complete
elimination of turnover would eliminate the 25 per cent extra capacity
added to the standard time allowance. Furthermore, I have pur­
posely avoided giving exact figures on equipment investment and
on the wages of one-fifth of 12,000 employees. I don't want the
figures on cost of turnover in the Packard plant to seem to be exact.
But I do want to enforce this point. The Packard employment
department is one of the oldest and best conducted in Detroit. It
has already effected vast savings in cost of turnover and yet the
head of the standards department, the man who with his assistants
sets all standard working times in the plant, estimates that new and
inexperienced workmen reduce the speed of production so much that
a 25 per cent allowance of equipment, buildings, direct labor and
supervision must be made.
Try that tune on your piano. Figure what it would mean to your
company annually to add 25 per cent to your cost to break in new
Do you know that it doesn't ? We have no true figures for cost of
turnover as yet. Until we get them we must rest our case upon such
indirect evidences as Mr. Rheinfeldt's startling estimate.
We can also gather other evidences of the cost of breaking in new
men by a study of plants which have kept a steady force, and by
comparing production records per man at the beginning and at the
end of the periods during which the reduction of labor turnover took
place. This, however, is not a very reliable guide, because a good
part of the increased production might have come from the intro­
duction of more scientific methods. It is significant, however, that
every plant in Detroit that has reduced its turnover of labor in the
last year has increased its output per man. In some cases it has
doubled it.
It is not necessary, in fact, to prove that losing men costs money.
There is a very general agreement upon that point, and there is also
a pretty general agreement upon the possibility of ascribing to suc­
cess in creating a stable force some of the increase in production
which appears concurrently. Employment managers, I take it, de­
sire not so much to be persuaded that it is worth while to discover
methods of reducing the needless exchange of employees as to have



proof that they can keep men on the job by definite methods which
have succeeded in other plants.
have some very interesting figures on the reduction of turnover
in Detroit plants during the last year or thereabouts. Labor condi­
tions during this time have been very disheartening, and, in all firms
where employment departments have been established for a long
time, the exchange of employees, in spite of intelligent work, has
increased during the last year. This is a very interesting fact when
taken in conjunction with another distinct and contrasting fact,
namely, that in all plants that have installed employment depart­
ments within the last year or more the turnover of labor has gener­
ally declined during this bad year.
Take the Saxon Motor Car Co. for instance. Its employment de­
partment has been in full running order only a little over a year, and
in the first year of its operation it has hired 140 fewer men for each
hundred on the pay roll. This figure is obtained by subtracting the
turnover figures at the end of the year from the turnover figures at
the beginning.
Take, again, the Hayes Manufacturing Co., where the employment
department was established in April, 1915. In the first year of oper­
ation turnover was cut practically in two. And then in the next
four months from April to August the turnover was more than cut
in two again and has been declining slightly ever since. This reduc­
tion was accompanied by a 30 per cent increase in output per man.
Then there is the Timken-Detroit Axle Co., where the labor depart­
ment has been in operation for 16 months and where foremen are
given a bonus for what is known as “ force maintenance efficiency.”
During these 16 months this efficiency has increased 20 per cent. I
refrain from giving the figures upon which this percentage is based
because the Timken does not desire to reveal the exact turnover
One of the most remarkable records I know of, with regard to
reduction of turnover as the result of the installation of a complete
labor department, is that of the Solvay Co., of Detroit. The record
is so good that I am going to take the risk of quoting the exact turn­
over figures. The Semet-Solvay (Coke) Co. and the Solvay Process
Co. occupy adjoining factories on the same plot of land, but maintain
entirely separate management. Up to the 1st of June, 1916, the
Semet-Solvay Co. had an employment department and the Solvay
Process Co., on the other hand, permitted each foreman to hire his
own men.
When it came to the attention of the management of the Solvay
Process Co. that they were having labor difficulties which did not
appear in the Semet-Solvay, the employment manager in the SemetSolvay was given entire charge of hiring and firing in both plants.



The average turnover for the two plants during the month of May
was 10 per cent. In the month of June, after the employment de­
partment had taken over the work of the Solvay Co. also, the turn­
over of the two plants dropped to 8.3 per cent. In July, it was 8 per
cent; in August, 4.1 per cent; in September, 3.3 per cent; in October,
3 per cent; in November, 2.6 per cent; in December, 2.4 per cent.
This is the most remarkable record of employment department effi­
ciency that I know of anywhere, and when you take into considera­
tion the fact that the average turnover of labor in Detroit was jump­
ing up by leaps and bounds at the same time that the Solvay com­
panies were greatly reducing their turnover, it appears even more
I have just analyzed the turnover figures for the last year in
57 Detroit plants, and find that they average a little over 252 per
cent per plant. This is, of course, very high because labor condi­
tions have been unprecedentedly bad. The figures, however, are
not as high as they would be if they did not include the compara­
tively low averages of plants having employment departments,
as well as of plants which allow foremen to do their own hiring and
firing. An analysis of plants having labor departments against
those having no labor department shows that, roughly averaged,
the plants having no employment department hired 3 men to every
2 hired by those which did have employment departments.
I do not attempt to give more exact figures because I am some­
what skeptical of the correctness of many of the reports which
came to me, particularly from plants that have no regular employ­
ment department. I suspect that if we had entirely reliable figures
from all plants, the record of those having no employment depart­
ments would show up even worse in comparison than they do.
It would be enlightening, if you have time, to take each indi­
vidual case of labor turnover reduction and trace out the methods
by which this was accomplished. In a fairly short presentation,
however, it is preferable to outline a complete scheme for labor
turnover reduction based upon the combined experiences of a num­
ber of plants having employment departments. I desire, there­
fore, to offer what appears to .be a combination of all the approved
remedies for what is sometimes known as the ‘ ‘mobility of labor.”
Obviously not all parts of the complete scheme can be applied to
every plant. And good authorities may feel that some of the methods
outlined have no business to be in the scheme at all for any plant.
Permit me at the start a doubtful generalization. A certain
manager of a Detroit plant which had a complete installation of
scientific management and which was used as a model for study
by all other Detroit plants, left to take over the management of
an automobile company in another city. lie found the new plant



devoid of any semblance of scientific management and yet for a
whole year he did nothing to change the internal methods of this
plant. He found upon analysis that 80 per cent of the cost of his
product came in the purchase of products made in other plants.
Therefore, in order to reduce the cost of his product he found that
He would have to spend most of his efforts in reducing the cost of
the products made outside. So it is, I think, with labor turnover.
I believe that we may safely say that 80 per cent of the cost of
turnover of labor is due to causes that lie outside of direct plant
activities; that is, when the workman is off duty.
Now the remarkable thing that is developing in employment
work in Detroit is a disposition to tackle the whole job of reforma­
tion. Like the automobile manufacturers just referred to, our
employers are striving to reduce the 80 per cent item of cost of
inefficient labor where the expense is incurred; that is, outside of
their own plants. They recognize that turnover of labor is a special
phase of the problem of inefficient labor, and that the reduction of
turnover is only the first step in a process of education and of eco­
nomic pressure to elevate the standards of workmen. They aim
not only to keep workmen, but to develop them. And they are
prepared to go as far as the workmen’s own home life, even, to solve
their problem.
Much of the impetus to this thorough-going effort comes from Henry
Ford. Employers sometimes feel that they have much to forgive
in Henry Ford, but most of his fault lies in doing so many things
first. One of these is the extension of factory influence into the
whole fife of the workmen. All Detroit plants are beginning to
follow him in this, and I honestly believe that they are profiting by
his experience, and are taking the best and leaving the worst of his
plan. Denied the credit of initiating the plan and free from the
fear of precipitating any such startled inquiries as have beset Mr.
Ford, they are able to proceed slowly, quietly, and cautiously.
The results so far have been good.
Miss Ida M. Tarbell came to Detroit prepared to revolt at unAmerican interference with the private concerns of workers as evi­
denced by the Ford procedure, and went away convinced in its favor.
She said of the Ford scheme to the Executives’ Club, “ I don’t care
what you call it—philanthropy, paternalism, autocracy—the results
which are being obtained are worth all you can set against them, and
the errors in the plan will provoke their own remedies.”
So you will find in my scheme of labor turnover reduction a con­
crete statement— a bill of particulars, so to speak—of the philosophy
of the more progressive Detroit employers. Turnover breeds ineffi­
ciency. Inefficiency breeds turnover and the only way to break the
103021°—17— Bull. 227------ 3



vicious circle is to attack them, both at one time, and, for the most
part, outside of direct factory activities.
The employment department in this view becomes the vestibule
not alone to the factory, but to a better life. The employment super­
visor becomes a copartner with the teacher, the minister, the social
worker, in the business of reforming men. It wasn’t Billy Sunday,
it was the employers of Michigan that put the State in the prohibition
column. They wanted to remove the saloon on the route between the
home and the factory. For the sake of securing more efficient work­
men, our employers and their personal representatives— the employ­
ment managers— are fighting for the elimination of vice and gambling
through Mr. James Couzens, formerly vice president of the Ford Co.
and now police commissioner. They are fighting for better schools
through Mr. Mumford, of the Edison and now president of the school
board, and for better city government, more adequate housing, and
better street car facilities, through the disinterested public services
of many busy manufacturers.
Nor do oar social reforming employment managers confine them­
selves to dragnet measures of improvement. The scheme I have
assembled is a routine of particular measures from each manufacturer,
according to his ability, unto each workman, according to his need.
Nearly every measure outlined is actually in effect in some Detroit
plant, and all of them, based upon experience somewhere, are at least
in project.
Let us take up remedies for labor turnover and inefficiency under
four main headings—preliminary, fundamental, supplemental, and
provocative remedies— and speak first of the provocative remedies.
(See outline of these remedies, pages 45 to 47.)
I believe in firing men as a final means of keeping men. We are
in danger of becoming too sentimental about turnover. We are too
likely to regard every man lost as an unwholesome sign: There is a
legitimate place yet for the “ tin can,” and when it is tied to man or
beast it ought to have something in it to make it rattle. But the
condemnation that reverberates most noisily is the deliberate unfa­
vorable judgment of one’s peers. I believe that every discharge
should be certified to by a committee on which workmen are repre­
sented. This is my notion as yet, but Dodge Bros, go as far as pro­
viding a blue envelope committee and no arbitrary individual judg­
ment can effect a discharge. Slowness and cautious fairness in getting
into action, however, only advertises the final result. When a man
goes out of that plant, he isn’t summarily kicked out, it is true, but
it looks much more impressive to be shoved out slowly by a consensus.
Let us by all means have the trump card of discharge in our hand
and then strive to win by playing off suit. If it is clearly understood
by workmen that the patience of the management is the forbearance



of strength and self-control, all our other methods of reducing turn­
over will gain in effectiveness.
Now, strictly speaking, what I have classed as preliminary meas­
ures, namely, a cost system and a record system for turnover, do
nothing in themselves to retain a permanent working force. But
without them the effective measures are not likely to be applied.
A true cost system is an urgent necessity. If it is true, as Mr.
Magnus Alexander estimates, that it costs $73.50 to break in a new
semiskilled operative and only $8.50 to take on a new laborer, mere
percentage figures for turnover mean very little. I will not go into
details at this time, but I submit that we should know how much
each type of new worker costs in terms of diminished production
resulting and of the excess equipment investment needed, increased
scrap incurred and increased supervision and education required.
Managers may affect to believe that it costs $400,000 a year to hire
10,000 men, but they won’t spend even $50,000 to save that sum until
you prove incontrovertiblv the actual expense of new men. The thor­
ough-going remedies for turnover are so expensive that until even the
most skeptical managers are convinced we shall not get far with our
corrective measures.
As for a complete record system, little preachment is necessary.
The aim should be twofold. The records should reveal graphically
not only the extent but the causes of turnover, and they should reveal
the parallelism between high turnover and low efficiency. The basis,
of course, is an individual register for each man, so complete that all
other reports can be drawn directfy from this. Aside from the usual
historical facts, showing dates of employing or transferring, the
starting rates and changes of rates and date of leaving employ,
together with original application and examination forms, this indi­
vidual record should be a chronicle of the workman’s progress, on
such items as earnings and bonuses, defective work, absences and
tardiness, his complaints and those charged against him, a periodic
certification by foremen, and, when he leaves, his apparent or
declared reasons for going.
The turnover should be analyzed at least monthly, and the record
should show: (a) By weeks, months, and years how long quitters
have been in the employ, in order to reveal the critical periods when
men are most lightly attached to their jobs; (b) by departments, to
show what foremen or class of work are most a^ fault; and (c) by
reasons assigned, to show what conditions call for improvement. It
should show, also, (d) what operations furnish the greatest mobility,
so that, if a cost of new employees has been established for each
operation, the monthly losses from turnover can be exactly computed.
Fundamental remedies for turnover differ from what I call supple­
mental only in relative importance. If you hire men wisely^provide



them with steady work at an adequate wage, and refrain from hasty
discharges, your turnover will be comparatively low.
The supplemental remedies are refinements designed rather to
promote efficiency in the men you keep, than to furnish additional
means of keeping them, and are likely, thus, to exercise an indirect
influence in reducing turnover.
It is almost begging the question to say, hire the right men for the
jobs, because, obviously, the right man is the man whom you will
like and who will like you. But there is room for so much develop­
ment here that I know of almost no other remedy that will reach so
far. When foremen hire, they grab the first man who shows up, and
fire him when he doesn’t make good. And a good many employment
managers do almost the same thing. In part this is due to the fact
that they haven’t the resources to write up exact specifications for all
the jobs for which they employ; still more because none of us has
thoroughly satisfactory tests of ability and character. But still more
it is due to enforced haste in filling requisitions. Foremen, planning
department men, and managers do not give the employment depart­
ment enough notice of men needed. A list of men required for the
year’s predicted production should be just as much a part of the
engineering department’s specifications as the blue prints and routing.
It is certainly as easy to predict men required as to predict cost, for
without the labor, how can the cost be estimated ? And, yet, how
many employment departments know two days ahead, even, the men
they will be called upon to hire ? I say inform your employment
manager as far ahead to supply new men as you inform your pur­
chasing agent to supply material.
With advance information he can build up the right kind of appli­
cation list. If your files list only men that have applied voluntarily,
it will be as unsatisfactory as a list of sales prospects that you might
secure without solicitors or advertising.
The best application file is really a prospect file, built up as the
result of a census of the workers suited to your plant, in your whole
city and particularly your vicinity. The Cole Motor Co. of Indianapo­
lis has just completed an inclusive industrial census/ The Saxon
Motor Co. of Detroit tells me that the simple measure that did most
to produce its remarkable turnover reductions was the practice of
preferring men who live within walking distance of the plant.
With a knowledge of men to be hired, the employment manager
can prepare specifications and forms of examination which wTill do
much to eliminate men who would not make good if hired.
Physical examinations are, of course, a necessity in a good system,
and they should be tied up with the measures for improving men once
on the pay roll, by having the examiner indicate deficiencies to be
corrected. But even examinations and such other precautions as



visits to the homes of desired applicants, and a checking up of pre­
vious records of employment can be resorted to only if ample time for
inquiry is secured.
There is not space in this paper to deal with the question of
industrial education, but it should not be overlooked that one does
not always need to go outside of his own plant to put on a new man.
It is always cheaper to transfer from a less important position an
employee who has been in training for a promotion. A work force
can be more certainly toned up by educating apprentices and giving
a continuing and broadening education to operatives than by hiring
brand new men by any system of careful selection whatever. The
growing demands of industry far outrun the supply of skilled workers,
and not only to contribute its share of trained people but even to
obtain its share, a plant must cooperate in the general educational
Now one of the most basic remedies for turnover is the payment
of an adequate wage, and this can be urged only upon plants that
have taken pains before hiring to ascertain whether the applicant’s
home life and standards of living, as well as his mental and physical
fitness promise his being able to earn an adequate wage.
By an adequate, I don’t mean merely a minimum wage. I mean
a good fat wage— one that will clothe, nourish, and educate his
children as well as feed him up properly. The Visiting House­
keepers’ Association of Detroit estimates that the lowest possible
minimum income for a family of five is $89, and no family in Detroit
is wise enough to know how to spend that sum well. Eleven plants
in the Executives’ Club have undertaken deliberately to see that every
workman, taking each case individually, by investigation, is suffi­
ciently supported. Some of them discover that for special reasons
some families can’t live on $100 per month. Any number of plants,
such as the Packard, Cadillac, Solvay, and Hudson, make not only
general studies of cost of living but particular inquiries, and where
necessary, pay off at good discounts the debts of overburdened
workers, allowing them to return payment periodically.
In my outline I have indicated a number of ways in which the
modern factory management follows up the pay envelope by helping
the worker to escape the shark, to purchase wisely, and to stretch
the purchasing power of every dollar he earns. Many mutual aid
associations and several legal aid bureaus have already been estab­
lished, and many plants encourage thrift and assist in home building.
We not only have seve*n or eight cooperative stores in process of
establishment, but six of them are considering plans to purchase
jointly through the Executives’ Club. A report on 83 successful
mutual aid societies has been compiled by Helen Bacon of the
Executives’ Club staff. It may be obtained for one dollar.



As for the remedy of steady work, you should note that it is just
as important to keep pieceworkers continuously supplied with work,
so that they can earn their expected income, as it is to regularize
work from season to season so as to keep a level force. In fact,
it is sometimes kinder to men to lay them off outright than to try
to keep them while they are earning partial wages. Employment
managers can not do much to regularize production from season to
season and from day to day, because these things are largely matters
of administrative policy and of factory system, but if they recognize
and advertise the importance of these things, they will focus the
attention of their superiors upon the necessary remedies.
When I say, finally, under the head of fundamental remedies,
don’t fire hastily, I not only mean to urge that you curb ill-tempered
foremen and curb your own impatience, but I mean, especially, to
give yourself time to influence men through the more slowly acting
measures headed up in this outline under “ Supplemental remedies.77
It would be of very little avail, either as a means of reselecting or of
disciplining men who had failed in one job, to transfer them, from
department to department, as the Ford Motor Co., for instance, does
with so much patience, unless every day counted to give a man not
only new hope but new instruction.
So, I say, start your new men right, promote physical efficiency,
foster good habits, make your work an unfolding career, and a suf­
ficient future, and all the time encourage self-expression, not only
of complaints but of suggestions and of cooperative interest and
To start new men right means not alone to give them a pleasant
and encouraging impression of their new work but also to complete
the job of hiring them. A man isn’t really engaged for a job until he
is engaged in it, and too often plants throw needless difficulties into
a man’s path between the time they agree to hire him and the time
when he settles down to work. An agreement to employ, in the
first place, isn’t completed until the new man is given a definite
guaranty of his starting rate of pay. You can not be sure of a man
doing anything but spoiling work for a day and wasting your time
if you take him on first and then let the foreman settle his rate of
pay afterward.
Give your man a definite starting wage, and, so far as possible,
a reasonable assurance of the rates to which he will be advanced at
stated times if he makes certain standards of efficiency. Then if he
accepts your job, you can be more sure of him.
But it is just as important to help a man get over his stage fright in
tackling a new job. Most men suffer acutely in contact with strange
surroundings. Even experienced workers discover unexpected obsta­
cles in new machines, and most new men will be found somewhat to



have exaggerated their qualifications in order to be taken on. You,
of course, have discounted their statements, but they go to work
uneasy in the thought that they have “ put something over” on you
and are afraid of being found out. Add to this their awkwardness
with fellow workmen and bosses, both strange to them, and their lack
of acquaintance with the plant and you get a frame of mind which
makes their work of little value to you, and the job seem undesirable
to them.
One of the things which stood out in my mind after reviewing the
many excellent methods of the German American Button Co. of
Rochester was the considerate way this company has of introducing
new employees. New people are asked to come at an appointed
time later than the hour when work starts, and are introduced by a
representative of the employment department to their fellow workers
and made acquainted with the rules, the conveniences and the special
attractions of the plant. A fellow worker is commissioned to take
them to luncheon the first day, and special queries are answered. It
is important to follow this method of introduction up and to have
instructors keep an eye on the new workers till they bring their
efficiency up to normal.
It may be, and usually is, necessary to help a worker out with money
or meal tickets, or to guarantee his board till the first full pay day.
All the workmen I have known individually have gone to new jobs
“ dead broke.” Often they quit on some pretext, after working a
few days, in order to draw pay to keep from going hungry. The
Studebaker Corporation in Detroit is especially liberal with respect
to meal tickets or pay advances to tide the new workman over.
Much injustice is done new workers in keeping them on day rates
after they have become proficient enough to be put on piecework.
While I have not analyzed from this point of view the high turnover
of labor which, I know, comes chiefly in the first few weeks of em­
ployment, I suggest that a comparison would show that turnover
is highest at just the time when new workers should be put on piece­
work and are not. I have followed the cases of workers for whom I
secured jobs, and know that many cite this as a reason for quitting.
Two plants I know of make special rates to beginners higher than
the piece rates of experienced employees so that they can measure
their progress from day to day and more speedily get on a profitable
wage. This is a kind of minimum-wage guaranty with the added
value of an efficiency scale.
Assuming our workmen well hired and well started, the promotion
of physical efficiency is a direct means of increasing production and
of helping men to earn pay which will keep them on the job. There
are so many things entering into this that it is a good thing, when the
resources of the company warrant, to have a physical department as



a branch of the employment division, with a high-grade physician
and several nurses in charge. There is not space in this paper to
mention any of the many plants which do this. The last convention
of the American Medical Association devoted a section to physicians
in industrial practice, and there is now a national conference board on
the subject. The physical department will generally conduct exam­
inations of desired applicants for employment, but I prefer the more
economical method of the Flint (Mich.) Manufacturers’ Association,
of a central physical examination bureau for applicants. The general
adoption of this plan would free the time of plant physicians—who
would still be needed to conduct periodic examinations of all workers,
as a basis for advice on better health. Such periodic examinations
may be voluntary at the start, and perhaps 70 per cent of the em­
ployees will come forward. Later, say after the second or third time,
it can be made compulsory. It will reveal surprisingly the causes of
low production in many cases, and help to eradicate them. The
physical department should supervise plant conditions from the
point of view of health, and should have authority on the improve­
ment of ventilation, heating and lighting, and the reduction of noise,
dirt, and noxious and unpleasant odors, as well as the sanitation of
oils and waste, the purification of drinking water and the cleanliness
of all public rooms.
The Joseph & Feiss Co. in Cleveland and the German American
Button Co. in Rochester are among the plants which find it profitable
to add a dentist and an oculist on part time to care for the teeth
and eyes of employees. Most workmen have bad teeth, with result­
ing indigestion and other degenerative diseases, and defective eye­
sight can injure workmen and slow up work before they lead to the
danger of accidents.
The physical department, of course, has charge of the emergency
hospital, and in this connection it is worth while to say that first aid
should be prompt, adequate and accessible, as it too frequently is not.
But much work should be done away from the plant. Physician
and nurses should visit workmen kept home by sickness, their
families’ as well as their own, so that they will not be allowed to
neglect illness. Home visits help reduce absenteeism, but they are
justified on their own account in promoting physical efficiency.
Plant doctors making home visits will know how to avoid conflict with
other physicians with whose work they may seem to interfere. There
are other measures which do not come within the field of a physical
department, which are advisable, nevertheless, on the score of in­
creasing a workman’s efficiency. Such expedients are plant res­
taurants, shorter work hours, plant athletics, rest periods during the
day, and yearly vacations with pay.



If possible, a factory should arrange to maintain its own restau­
rant, which if properly managed can be self-supporting. It di­
minishes a workman’s energy to eat, possibly at his machine, a cold
lunch carried in a paper parcel from home.
Shorter work hours, while diminishing output for the day, increase
it for the period. On principle I favor the eight-hour day, or, at
most, the 50-hour week, and in some arduous or intensely monoto­
nous tasks I favor an even shorter day.
An investigation which I made a year ago among plants having
the short workday convinced me that where a worker is not limited
in output by the nature of the process, he will do as much in 48
hours as in 60. Of course, to secure this result the plant must be organ­
ized to keep him continuously busy for eight hours, and an incentive
wage payment system must induce full effort.
My prejudice in favor of the eight-hour day springs wholly from
my belief that it is an economy for the well-organized factory and
a gain for the community. Where issues with unions arise over the
matter or where consideration for the interests of other manufac­
turers enters the question it may be advisable for a limited time to
maintain longer hours on principle. There is always something to
be said for the status quo, and where hours are to be shortened, the
employer has a right to demand time for adjustment so as either to
secure some increase in effort from the workmen or to pass on to
the consumer the added expense assumed for community good.
Furthermore, I believe that for securing increase in physical effi­
ciency it is preferable to distribute a part of the added leisure time
through the wTorkday in the form of rest periods. The Aluminum
Castings Co. of a five-minute rest period each half day.
A company in Rochester allows one rest period of 3 to 12 minutes
in every hour, according to the nature of the work. To secure con­
formity it shuts down the power and has recreation organized to
utilize the time. There is as yet no dependable information dn
fatigue, in spite of certain German researches and the more recent
studies of the British association and the munitions ministry, but
the experience of the Army with regard to forced marches and the
experiments made by Frederick W. Taylor long ago demonstrated
measurable benefits from rest periods. Any manager may make a
first test by observing the effect of rest periods in his stenographic
department. A working principle is that the more repetitive the
operation is, the shorter the cycle of time, the more frequent but
briefer the rest required is. And, too, I should consider it advisable
to make rest periods either longer or more frequent toward the close
of the day.
A vacation is one kind of rest period in the above sense. Shop
men need it perhaps more than office workers, and should secure it



on the same terms. It is advisable to tie the vacation plan up with
the measures to reduce absenteeism by making, the length of the vaca­
tion with pay vary with the number of weeks of satisfactory attend­
ance. Strike fever is often vacation fever. Shrewd managers, if they
had no more altruistic aim, might well plan vacations to promote
industrial equanimity.
It is needless to elaborate on the benefits of athletics in relation to
health. They are, if anything, more important as self-expression,
which I shall mention later.
A separate supplemental remedy for turnover is the development
of good work habits. This relates particularly to punctuality and
regularity. The man who is on time every day is least likely to quit
work. His mental attitude becomes fixed in a feeling of responsi­
bility toward his work. But the worker who becomes casuaLwith
regard to attendance has taken the first step toward total delin­
quency. You have only to picture the subconscious mental processes
of a man who remains away from work one day needlessly to appre­
ciate the subtle change of attitude he bears toward his job. To foster
good habits, we enumerate such measures as prompt investigation of
causes of unexcused absence, strict penalties for tardiness, bonus for
regular attendance (one Detroit company, for instance, paying 25
cents a day extra for a month’s perfect record) and the establishment
of a pay system such as piecework, premium or bonus, which encour­
ages and rewards accuracy, high output, and punctuality.
All other remedies for turnover are likely to be chiefly negative or
counteractive unless the management encourages self-expression.
First, hear complaints. No matter how unwisely or unfairly objec­
tions are presented, give men every chance to “ knock.” Let them
come individually by preference. But even if you deprecate griev­
ance committees, never refuse to hear a committee once appointed.
Some men satisfy complaints by being allowed to air them, just as
some old people desire not so much to be cured of ailments as to
have ailments to describe.
It is better, however, to pick up complaints before they become
grievances—while they may be still an expression of some form of
idealism—and to deal with disquieting aspirations before they become
programs. For this purpose shop meetings called by managers, and
scheduled to discuss pleasant and hopeful enterprises as well as diffi­
culties, preserve good feeling. Like wise parliamentary leaders who
head off taking a vote until the majority will fall their wray, or who
sense out a needed compromise or recession before it is exacted, a
good manager can employ a shop meeting either to approve his sug­
gestions or to applaud his discernment.
But self-expression goes beyond this. It may be interest in work
evoked by a suggestion system. If you make it an invariable prac­



tice to acknowledge in writing every proposal in writing, you have a
suggestion system. Boxes to receive letters, and prizes, commenda­
tion and promotions to reward them, are mere refinements. Then
there is the still more exuberant and satisfying form of self-expression
which appears in social, athletic, and cooperative organization. We
are all nearly as ambitious for communal as for financial rewards.
You can not bring 500 people together in a factory or anywhere
else habitually without providing a field for social striving. They
crave organization, fun, activity, and influence upon one another.
You, as managers, can capitalize this tendency to the advantage of
your enterprise. You can make your organization a real family,
your plant a communal home.
Self-expression is self-rewarding. No life is complete without it,
and the factory which does not promote it is repressing a vital part
of the complete life.
Now, when we reduce turnover of labor we assume certain respon­
sibilities. Building up a permanent working force means securing
permanent employees, men and women who stay with us till they
grow old, and retire or die. We must, therefore, make their work
more completely satisfying. We must make their work a sufficient
career. Self-expression is one part of it, and there are other elements
in it.
I know of few plants where routine factory work is a sufficient
career, but I see no reason why it should not be. Doctors look for­
ward cheerfully to going on being doctors. Law}^ers have no diffi­
culty in finding their life work in the law. Other professions are
satisfying to those who follow them, and yet such is the nature of
factory work at present that it savors a bit of the desire to perpetuate
class distinctions to suggest that factory workers content themselves
with the prospects of continuing as factory workers. Some wicked
agitator has suggested that employers appropriate the motto of a big
New York dairyman, “ Milk from contented cows/' as suitable to the
aim of managers to keep workers permanently on the job. The way
to make that aim worthy is to arrange conditions so that factory
work is in itself an agreeable career.
For one thing there must be definite standards of promotion and
pay increases. A Detroit factory discovered a workman in its employ
who had gone five years on one rate of pay. A Pittsburgh plant
till recently was paying three different rates of pay for the same opera­
tion under three different names in different departments.
There should be variety of interest, too. The modern subdivision
of labor makes a given task a drudgery, monotonous and intellectually
stagnant, but it brings with it the possibility of frequent transfers
so that, with proper instruction, a man can follow all the steps of a
process without great cost to the plant. The Ford Motor Co. asks



each employee to fill out a card stating the jobs to which he would
like to be transferred when it is possible. A company in Rochester
encourages employees to fit themselves for more responsible positions
and higher earning power by reimbursing for their outlay those who
complete courses of study. The subject of industrial education again
hinges upon our discussion at this point, but it is too big to deal with
No work is a career, of course, unless it is possible through it to
provide for old age. Those plants which succeed in establishing
permanent working forces have the inescapable responsibility of
providing for the future of all wrorkmen. Group insurance and other
forms of life insurance are good, but not sufficient. They do nothing
for the workman between his retirement and his death, and serve but
poorly even to compose his fears for his family after his death, because
nearly every penny of industrial insurance now goes merely to pay
funeral expenses.
A pension system helps to bridge the gap between superannuation
and death. Any kind of old-age pension is good, but we should lean,
surely, toward the kind that appears least to be a charity on the part
of the company. The income from an investment to which the
workman has contributed and which the company has helped him to
accumulate is not charity, and has the further merit of leaving an
inheritance to the family. Any profit-sharing scheme like the Procter
& Gamble plan, which gives the employee a form of stock owner­
ship, has this merit. The most carefully thought out scheme is that
of the Baker Manufacturing Co., of Evansville, Wis., which provides
for a 15-year pension after retirement on a partial resale to the
company of the stock secured out of profits shared.
These are ambitious plans. The program outlined above is a
particular scheme comprising nearly all of the proposals successfully
introduced for the attempted solution of the labor problem. Alto­
gether they may not solve it, but incomplete as they may be, they
are sufficiently aspiring and they are all that managers can undertake
on their own responsibility.
Even if all of these proposals are applicable to most plants, no
factory that has so far failed to inaugurate most of these things can
hope immediately to get them all going. It will have to go slowly
for two reasons, especially. In the first place, it is impossible to
apply any new scheme to all employees at once. This is particularly
true if, for the expedient to be successful, it must be understood and
believed in by the employees. In such a case it must begin with only
those who are ready for it. When the Jeffrey Manufacturing Co., of
Columbus, Ohio, began its building and loan association seven years
ago, only 18 workers out of 500 who at first expressed interest were
sufficiently impressed to make an actual beginning. Now, over a



thousand belong to the association and they have over a half million
dollars invested. Most good enterprises with workmen have begun
in this small way, and no employer should be discouraged by a meager
start if the principle at stake is important.
But it is even harder to make an industrial program succeed
promptly, owing to the difficulty that a plant has in establishing
its character with its workmen. It is so even with individuals. We
don’t easily believe in the permanence of good intentions. We
intensely desire to find friends in whom we can trust and who will
be as helpful and patient with us 10 years from now as to-day, but
experience makes us cautious. Once we are convinced of the un­
alterable integrity of a friend, there is no gift of adoration too extrava­
gant to lay at his feet.
Workmen have been disappointed too often to be anything but
skeptical. They have tested too many mere paper plans for their
welfare to place any easy reliance upon new ones. But when a
management, by undeviating honesty, determination, and good spirit,
carries through during a term of years a program of employees’
betterment, it can not fail to win their confidence and friendship.
1. Preliminary measures:
(a) Attempt to learn true cost of turnover in your plant in order to know how much
you can afford to spend to eliminate it.
(b) Keep adequate records as means of analysis of sources and causes of turnover—
(1) Historical and statistical record separate for each employee, including
date of employing or transferring, rates, earnings, bonuses, defective
work, complaints by or against man, absence, tardiness, periodic cer­
tification of foremen, date of quitting and reasons.
(2) Turnover by departments, by causes, by weeks and months and years,
and by classes of skill.
(3) High and low earnings by departments.
(4) Defective work by departments.
(5) Absenteeism and tardiness by departments.
2. Fundamental remedies:
(a) Hire the right men for the jobs—
(1) Work up good application list which is a ‘ ‘'prospect file” by vigilant
search of sources of supply, by industrial census of your vicinity, by
courteous and hospitable treatment of applicants at all times, and by
getting a good name for your factory even from men who have q*uit you.
(2) Using your present work force as a “ prospect file, ’ ’ cooperate with agencies
for industrial education, supplementing them with apprenticeship
training, to build up a system of promotion and transfer.
(3) Secure time to examine new applicants thoroughly by receiving advance
notice of need and by using adequate assistance in employment
(4) Hire in accordance with written specifications for each job, prepared at
leisure, and after due consultation and criticism.
1 This scheme is intended to be com plete and is therefore impossible of universal application in toto.



2. Fundamental remedies—Concluded.
(а) Hire the right men for the jobs—Concluded.
(5) Prepare a definite scheme of direct examination for each type of work,
using as much of the character-reading methods as your experience
(6) Examine physically with view to general fitness, to suitability for speci­
fied job, -and to need of later upbuilding.
(7) Visit homes of desired applicants.
(8) Check up records of previous employments.
(9) Hire only those who can earn an adequate wage.
(б) Pay an adequate wage—
(1) Study cost of and facilities for decent living for ear*h workman and use
results in setting base rates.
(2) Give special study to cases of inefficient workmen, to see if money
troubles are affecting them.
(3) Centralize and pay off at discount, debts of overburdened workmen.
(4) Promote mutual aid association.
(5) Establish legal aid bureau.
(6) Pay weekly.
(7) Discourage alcoholism.
(8) Instruct in proper use of income.
(9) Encourage thrift and home building.
(10) Where special causes for increased living cost obtain, attack them, as by
cooperative stores, housing measures, etc.
(c) Provide steady work—
(1) Give pieceworkers steady flow of material during the day, by proper
scheduling system.
(2) Regularize production throughout the year to minimize lay-offs and shut­
(3) Abolish the annual physical inventory, in favor of perpetual inventory
with continuous checks.
(4) Make repairs promptly and provide a sufficient reserve supply of tools.
(d) Don’t fire hastily—
(1) Check up foremen whose departments show high turnover records through
men’s quitting.
(2) Don’t let foremen discharge at all.
(3) Give unsatisfactory men at least one chance through transfer.
(4) Establish employment committee to review cases of discharge where
men appeal.
(5) Establish foremen’s club to study ways of getting along with men.
(6) Interview, before paying off, men who quit voluntarily.
3. Supplementary remedies:
(a) Start new men right—
(1) Make clearly understood agreement as to starting pay and schedule of
(2) Introduce new men to bosses, to fellow workers, and to physical surround­
ings, and acquaint with rules and facilities of plant.
(3) Instruct men thoroughly in new task.
(4) Advance money or meal tickets to beginners short of funds.
(5) Help beginners speedily to get on piece or bonus rates.
(&) Promote physical efficiency—
(1) Establish physical department.
(2) Examine all workmen periodically and provide machinery for following
up those found to be defective.



3. Supplementary remedies—Concluded.
(b) Promote physical efficiency—Concluded.
(3) Provide adequate light, heat, and ventilation.
(4) Reduce noise, dirt, and noxious odors and fumes.
(5) Purify oils, waste, and other supplies.
(6) Purify drinking water,
(7) Provide sanitary lockers, wash rooms, and toilets.
(8) Insist upon good teeth and good eyes by using, at least on part time, the
services of a dentist and an oculist.
(9) Have nurses or doctors visit those kept home by illness.
(10) Provide mid-workday meals at plant.
(11) Provide good tools and fatigue minimizing equipment.
(12) Shorten work hours while securing fair output.
(13) Provide at least three rest periods during the day.
(14) Arrange for yearly vacations with pay for all employees. This can be
on the basis of an efficiency record or punctuality record.
(15) Promote athletics.
(c) Foster good habits—
(1) Investigate causes of unexcused absence.
(2) Fix strict penalties for tardiness and unexcused absence.
(3) Bonus regular attendance.
(4) Establish pay system that encourages and rewards accuracy, high output,
and punctuality.
(d) Give all employees a hearing—
(1) Hear complaints at all times, no matter how put forward.
(2) Hold regular shop meetings by departments and by divisions to hear
men’s ideas.
(3) Establish system for considering written suggestions from men; reward­
ing with commendation, prizes, or promotion, all thought worthy, and
acknowledging all such suggestions without exception.
(4) Encourage all forms of self-directed organization, whether of athletic,
social, or cooperative enterprises—provided such organization is not
subject to orders from persons outside of your plant and contrary to its
(e) Make work in your plant a sufficient career—
(1) Establish system for granting unasked-for pay increases as deserved.
(2) Discover ambitions of men for future transfers and promotions.
(3) Help train men to new tasks.
(4) Transfer with some liberality.
(5) Encourage men to improve general education by reimbursing for outlay
on courses of study as completed.
( /) Provide for future of all workmen—
(1) Purchase group in sta n ce for all workmen.
(2) Pension disabled or superannuated employees.
(3) Share profits on some form of stock-sharing basis, possibly in lieu of
pension scheme.
4. Provocative remedies:
(a) Fire when other methods clearly fail—
(1) Those with chronic social diseases.
(2) Those whose morals menace the high standards of fellow employees.
(3) Those who persist in agitation.
(4) Those who will not quit drinking.
(b) Submit all such discharges to appeal committee on which employees are



The C h a i r m a n . It gives me, as the president of the Philadelphia
Chamber of Commerce, great pleasure to welcome you to this city and
to our quarters.
We feel that you have done Philadelphia and the Philadelphia
Chamber of Commerce a great honor by coming here in so large a
number, from all over the United States, to hold this very important
series of sessions in this city. Our reception committee is ready, and
will be very glad to be of all assistance possible to any persons attend­
ing this conference from out of town. Permit me to tell you who are
serving on this reception committee, so that you will know them, and
I will ask each member of the committee to stand as his name is called.
Robert C. Wright, of the Pennsylvania Railroad Co.
Charles S. Krug, of John Wanamaker’s.
John E. Park, Philadelphia & Reading Railway Co.
Milton D. Gehris, of the John B. Stetson Co.
William Disston, of Henry Disston & Sons (Inc.).
Edward E. Pennewill, of Wm. Cramp & Sons Ship & Engine
Building Co.
F. C. Brodhead, of the Curtis Publishing Co.
John Jackson, Strawbridge & Clothier.
Having been formally and properly introduced to your reception
committee will you not please make use of it in every way possible ?
The subject of your conference, the problems and the questions of
employment, is close to the heart of every business and every business
man of a country that seems to have solved all the other important
sides of business questions. Our mechanical experts have reduced
the question of possibilities in machinery and mechanical apparatus
to practically nothing. On the question of raw materials and products
of all kinds, a scientific effort and development have perfected our
operation to a point where question no longer exists. In advertising
lines, through the effective work of the National Association of
Advertising Men, we are able to-day to put our fingers upon the
tangible ways to do the necessary things. When it comes to agri­
culture, science has already shown us the way; we know the pecu­
liarities, the eccentricities and the frailties of practically everything
in the vegetable and in the animal line. But we do not yet know the
human problem as it is connected with business operation.



And so the chamber of commerce, consisting of over 5,500 members,
the principal leading business men of the city of Philadelphia, has a
double reason for welcoming you here for your conference. We are
glad to have you with us, we are proud of your association with us
in this way, and we are going to welcome the results of your delibera­
tions along those lines which will help all of us to know more about
this one side of our business, which so far has not been developed in
keeping with the other angles of it.
The first number on your program this afternoon is the subject of
“ Tabulating labor turnover,” by Mr. E. H. Fish, employment man­
ager of the Norton Co., of Worcester, Mass., and chairman of the
Boston Employment Managers7 committee on tabulating labor
108021°-—17— Bull. 227-------4


The efforts of this committee to find a reasonable basis for com­
parison between shops, based on the length of time which men stay
on their jobs, developed at the very first a feeling that it was im­
possible to reduce it to any single figure or percentage.
We felt that the percentage of labor turnover as usually com­
puted and published was being used to some extent as an index of
the value of an employment department. If this is so, it puts a
premium on a department able to persuade foremen to retain in­
efficient workers who his better judgment told him should be laid
off or dismissed. In view of these thoughts, we decided at the start
that it would be desirable to analyze the causes of leaving as well
as the different kinds or conditions of people whom we employed.
With this in mind, we evolved sheets [see Forms 1 and 2] in which
those who were hired, or those entering the employ of the company,
were divided broadly, at first, into the new, the reemployed, and
those transferred from other departments. One sheet [Form 2] is
prepared for recording the turnover for the entire plant by depart­
ments during a chosen period of time, and the other [Form 1], the
turnover in a given department for a given month. On each sheet
the new and the reemployed are each divided into three classes,
those who are experienced, those wiio are learners, and those who
are laborers. The division was adopted after considerable discussion
in which skilled, unskilled and semiskilled occupations were dis­
cussed, but it was decided that for the purpose of keeping the cost
of labor turnover low, it was an advantage to every concern to hire
experienced people, regardless of whether their experience was that
of skilled, semiskilled, or unskilled person, because the previous ex­
perience with the company, or with similar companies, counts for
almost as much in one case as another.

The classification of learners was adopted because of our feeling
that we should face the facts fairly and squarely as to whether we
were hiring men whom we expected to train for our own purposes,
whether they were men who we suspected had had previous experience,
or whether we should make a distinction between them and laborers



whom we expected to be about equally efficient at the beginning and
at the end of their employment. This, too, gives us an opportunity
to present to the managements of our several companies the number,
usually large, of employees for whom some kind of training is needed
before they become efficient, because by thus showing this consider­
able number, it probably will be possible to induce them to set aside
certain portions of the shop for the specific training of new employees.
As such men are scattered among the general help, the large number
usually passes unnoticed. Under the head of those transferred to a
given department, the division is made between those transferred for
physical reasons (which includes, of course, those transferred because
they have been injured in accidents) and those whose physical con­
dition has changed through sickness, or those whose physical con­
dition remains the same, but where the job in the department has
changed its nature in such a way that we do not feel the man can
safely continue to do the work for which he was originally employed.
Those promoted require no discussion. Those who are transferred
from another department because they have failed in the first, should
be kept entirely distinct because, while as a matter of fairness to the
individual it is usually desirable to give the failures another oppor­
tunity in some other department, the percentage of them who make
good should be kept track of, and that can not be done unless we
know the actual number who were transferred under such conditions.
It appears generally to be found that a sufficient number of those
who fail in one department succeed in another to make it well worth
while to hold this second opportunity open at the option of the em­
ployment department, but it is not thought that the percentage
of those who succeed in the second department is large enough so
that it can be said to be universally true that everyone should have
a second or a third opportunity.
Under the head of “ Transfers on account of departmental fluctua­
tion/’ we take care of cases where one department finds itself tempora­
rily out of the normal amount of work through lack of delivery of
material, or for any other reasons, and the people employed there
must be taken care of in some other department instead of being al­
lowed to drift outside.

Under the head of “ Exits,” broad divisions were made between
(1) those who left of their own accord, (2) those who were discharged
or dismissed from .the employ of the company, (3) those who were
laid off, (4) those transferred to other departments, and (5) the exits
which were unavoidable by any act which the company might take.
Under those who left of their own accord, which should be under­
stood to include only conditions which might be remedied if the com­


th e

fig u r in g



pany saw fit to do it, we make the three broad divisions of those who
left (a) on account of working conditions, (b) on account of location,
and (c) for other reasons.
Under the head of “ Working conditions’’ we made the sub­
divisions of those who left on account of wages, that is, those who
were able to or thought they were able to get larger pay, those
who left on account of heavy, wet or dusty conditions, which column
might also be used to cover many other conditions such as those due
to lead poisoning, etc., those who left on account of ill health, and
monotony. Two additional columns are left for specific reasons
which may apply only to the shop which is using this form.
Probably in almost every concern, the largest number of assignable
reasons will be those relating to ‘ ‘ Wages.’ , It was thought that experi­
ence might show a certain more or less definite percentage of people
leaving on account of their wages, which might indicate a danger point
and that salaries or wages should be increased. For example, if the
turnover due to people leaving the concern on account of wages alone
should become more than, say, 30 or 40 per cent, it might be deemed
desirable to consider seriously the question of a general increase of
wages in the department affected.
Under the head of “ Heavy, wet, or dusty, etc.,” of course, are
included conditions which are oftentimes inherent in the business
itself, and which must be faced. Sometimes, however, the fact that
we are able to show to the management that a larger percentage of
people than they had supposed leave us on account of these reasons,
may indicate to them the desirability of spending considerable sums
of money in remedying conditions which they had been inclined to
think were of comparatively little importance.
Under “ 111 health” are supposed to be included only such cases as
are contracted inside of the employment, and such few cases of sick­
ness as come about through the fault of the company itself or through
defects which it might readily remedy. Others should be classified
under “ Unavoidable reasons.”
“ Monotony,” is often the cause of people leaving, although it is
not always easy to discover this reason from the excuses given by
the people themselves, and especially from the excuses given by the
foremen. Where it is suspected that work is monotonous, care should
be taken to draw out the opinion of those who leave. •

Under the head of “ Location,” we have made two divisions, one
“ Due to the family moving from town,” which, of course, usually
applies to the children or the younger people in the family. We
usually consider that if the head of the family is the one who takes
the initiative in leaving town it must be for some other reason, and



will be classified under another head, that is, he may be leaving town
on account of any of the working conditions which we have already
mentioned, or it may be because we have laid him off, and he is only
able to secure a position somewhere else.
Under the head of “ Housing conditions/’ we place the leaving of
employees because they are unable to secure the kind of tenements or
houses which they desire, or cases, which often happen in rush times,
of their being entirely unable to find accommodations at all. We
place this under the avoidable causes, because it is something which
concerns have usually considered in locating their plants out of the
center of large cities. The concern may not care to go to the expense
of reducing the turnover due to the lack of good transportation or
good housing, because it feels it is making more money through some
of the other advantages of distance from the center.
A number of blank columns are left here. The only miscella­
neous reason which we are giving is “ Unknown,” which, unfortu­
nately, it seems to be necessary to maintain. It is usually possible
to get some reason assigned for every person’s leaving, but many
times these reasons are such that we doubt them. Therefore it
seemed desirable to leave a column frankly for those whom we do
not wish to assign to any particular cause.

The first group of exits from work on account of dismissal has
been classified under the head of “ Careless,” the careless man per­
haps being the greatest bugbear that we have, although sometimes
carelessness is a curable disease. Laziness is our second classifica­
tion, though as a usual thing it is very hard to distinguish between
carelessness and laziness, the results and the symptoms being ver}r
much the same. It was, however, thought that there would be men
who are exceptionally active whose carelessness is the result of over­
enthusiasm and whose classification falls under the first head rather
than the second.
Incompetency is a very common cause of dismissal in these times
when men are apt to represent themselves as more capable than
they really are. In a measure, the turnover due to incompetence
may be said to reflect somewhat on the employment department,
which should be sufficiently keen to discover such cases before hiring
them. It is certainly a part of its duty to give such people another
opportunity, if possible by transferring them to some other depart­
ment, so that we would expect that this column would not be espe­
cially large. Under the head of “ Unreliable” we would place such
men as we considered were actually competent but, through careless­
ness or laziness, were apt to be variable in their actions. Probably
not a great many would be classified under this head, as they would



most naturally fall under the two heads of “ Carelessness” or “ Lazi­
ness.” The columns “ Liquor,” “ Troublebreeder,” “ Insubordinate,”
and “ Misconduct” probably need no explanation. There are very
few places where any of us can afford to keep men who abuse the use
of liquors or those who are in the habit of stirring up trouble with
other people. Our general experience with insubordination, how­
ever, leads us to feel that there are very few cases which could be
clearly placed under this classification, as most men are willing
to subordinate themselves to a foreman’s instructions if they are
given clearly so the man does not misunderstand them and if they
are given in a proper spirit. Most of the men who are insubordi­
nate under proper conditions may be said to be trouble breeders by
nature and should probably be classed under that heading.

Under the subheading of “ Laid off” we have made the following
1. To decrease the force, probably made necessary by lack of work, although it
might be due to the fact that additional machinery had been installed which re­
quired less labor to operate, or because the men already on the job had become more
efficient and were able to do the work in a smaller group.
2. Those laid off for physical reasons include those who have become aged in the
service of the company, and those who as a result of some sickness, or accident, have
become incapacitated. It seems, however, .that very few should be placed under
this column, as a man who has become incapacitated 'as a result of the work which
he has done seems to be a proper object for further care by the company, either by
being placed in some easier, less active job, or by being placed on some sort of pen­
sion roll.

The next column accounts for the laying off of those temporarily
employed, which reminds us that under the entrances no diyision
is made between those who are employed for temporary work and
those who are not. It is very difficult usually to determine at the
time a man is hired whether his employment is to be temporary or not.
We may have a gang of 50 men and we may wish to increase that
gang temporarily to 75. In hiring 25 new men we are almost cer­
tain that some will prove to be men whom we will wish to keep at
the expiration of the time when the work is done for which they are
hired, preferring to lay off some of the men who are already on the
job as being less capable.
The subheading for men transferred is divided into those trans­
ferred for physical reasons, which is covered also in our statement
regarding those laid off; for those promoted, which is usually ob­
vious, although promotion at times may appear to be a little vague.
Oftentimes, a man asks for a transfer from one department to another
which he believes will prove to be a promotion for him, when it
seems to us to be a demotion. However, we should feel, we think,

Record o f turnover (F orm 1),

Departm ent...








Left o f own accord.









’ o3




j Total exits.


( Total entrances.


Exterior causes.


Marriage (female)
, or pregnancy.


■ Pensioned or suj


D ep a rtm en ta l





j Prom oted.





| Temporarily


Physical reasons.



To decrease force.







1 Misconduct.






Trouble breeder.









Incom petent.

17 | IS




I >■-*!



H o u s in g condi­
tions. '






Heavy, wet,
dusty, etc.


D ep a rtm en ta l






Physical reasons.













U navoid­

Other reasons.

' Occupational


W orking condition*.

T o irl f\iT











* ”


3 a


T otal..............







.. ! .....

Per cent.

j ................................... .

T ota l..............

Per cent,

T otal..............
Per cen t...................
T o com pute percentages divide totals b y “ Department average for month. ”

Per cent.

(T o face page 55.)

No. 1

Number o f employees in department on la*t day of la ^ m o n t h ,....................

Last day o f this m o n t h ,.....................

Department average for m onth,


Turnover is the change in personnel brought about by hiring and termination of
employment. Many conditions enter into these changes, some of which are beyond
the employer's control or influence. Other conditions are largely within the control
of the employer, and because of their obvious importance, they demand serious
Problems relating to personnel are no less vital than problems relating to markets,
materials, and machinery. Conditions affecting turnover lie at the heart of all per­
sonnel problems. Intelligent consideration can not be given these conditions without
knowledge of facts, and such knowledge depends upon accurate data.
It is impractical merely to group or express in total percentage all the factors entering into turnover; these factors are irreconcilable. It is of value to know the per cent
of exits, but it is of more value to know the causes of those exits; therefore a detailed
analysis of reasons underlying termination of employment becomes valuable.
With the above in mind and appreciating the necessity of uniform records if future
discussions of the problems of turnover are to be of value, the Employment Managers'
Association of Boston has adopted this provisional form and method for computing
turnover. The association anticipates its later revision in the light of experience to
be secured through its use.
As a convenience and economy to employers this form is printed and carried in
stock by the Library Bureau, Boston, Mass

(B ack o f Form 1.)

1. Employed................................................
2. Reemployed...........................................
3. Transferred..............................................
4. Total entrances..............................................................

Left of own accord................................
Laid off....................................................

10. Total exits....................................................................
Deduct unavoidable (9).............................................................
Ba.lanee=department turnover,

Per cent

Kecord of turnover (Form 2).






-------Left of own accord.












































° 2


























^ £
2 o





40 !





S «j
*0 s
o £
*72 *o ^

"S ,•
s c
W ci

.5 G<






^ .




Total exits.





Una' oidable.






Laid oiT.

Other reasons.




Departmental fluetuation.


Departmental fluetuation.



Working condi tions.



a nmsu*rnHi.




............ I..............


..... !..............

To compute percentages, divide totals by


(To face page 55.)

Plant average for month.”
No. 2

Number of employees in plant on last day of last month,

Last day of this month,

Plant average for month,


Turnover is the change in personnel brought about by hiring and termination of
employment. Many conditions enter into these changes, some of which are beyond
the employer’s control or influence. Other conditions are largely within the control
of the employer and because of their obvious importance they demand serious
Problems relating to personnel are no less vital than problems relating to markets,
materials, and machinery. Conditions affecting turnover lie at the heart of all per­
sonnel problems. Intelligent consideration can not be given these conditions without
knowledge of facts, and such knowledge depends upon accurate data.
It is impractical merely to group or express in total percentage all the factors enter­
ing into turnover; these factors are irreconcilable. It is of value to know the per cent
of exits, but it is of more value to know the causes of those exits; therefore a detailed
analysis of reasons underlying termination of employment becomes valuable.
With the above in mind and appreciating the necessity of uniform records if future
discussions of the problems of turnover are to be of value, the Employment Managers*
Association of Boston has adopted this provisional form and method for computing
turnover. The association anticipates its later revision in the light of experience to
be secured through its use.
As a convenience and economy to employers this form is printed and carried in
stock by the Library Bureau, Boston, Mass.


(Back of Form 2.)

1. Employed..............................................
2. Reemployed..........................
3. Transferred.................. .
4. Total entrances...........
5. Left of own accord.. .
6. Discharged...................


Trn/nsffirrnd______ ______




10. Total exits....................
Deduct transferred and unavoidable (8 and 9)
Balance=Plant turnover..........................



that anyone who is bettered either mentally, or physically, or
pecuniarily, is promoted even though it may not appear to an out­
sider that the new job is better than the old one.
Those who have failed in one department and are transferred
from that department on that account, also, of course, appear in the
entrances under the head of those transferred. Departmental
fluctuation is supposed to cover the transfers made from time to
time from one department to another, and more especially between
departments of the same nature, but, perhaps, in different buildings
under different foremen. This would cover such cases as those
where a number of people leave one department, and in order to fill
the gap others are shifted from other departments to that, possibly
temporarily and possibly permanently. Transfers under this
heading would not constitute promotions nor indicate that the
person transferred is in any sense a failure.
Under “ Unavoidable causes” are classified those who are super­
annuated or pensioned for any other reaso^n, those whose marriage
takes them away from the shop or office, and the deaths which
are caused by exterior causes, or those due to occupation in the
works. We felt there should be this last distinction between the
two because exterior causes are not a reflection upon the industry
at all, while those coming from the occupational diseases or from ac­
cidents should be kept separate so that we may have an index of
the dangers of our work.
At the bottom of the sheet [Form 1], it will be seen that there is
provision made for getting the percentage of leaving for each one of a
number of different causes. There is first a footing for the total of
each individual column. By dividing that total by the average
number of employees concerned, we arrive at the percentage leaving
for that particular department for that individual reason, and for the
time covered by the sheet. Then the next totals are for the totals of
the subheadings—that is, the new entrances, the reemployed and
transferred, those who left of their own accord, those who were
discharged, those who were laid off, those who were transferred and
the unavoidable. Then the third set of totals and percentages is
for those coming and those leaving, so that if this is applied to the
whole plant, the percentage of those leaving over the average num­
ber employed will give us the total turnover for the whole plant.
On the other hand, the sheet gives us a classification as fine as any­
one probably will require, so that a study of these sheets will give
a bird’s-eye view of the whole condition, and as finely subdivided
an opportunity for study as can be wished. The recapitulation of
these figures by departments and by plants is provided for, as may
be noticed on the back of the two forms.

The C h a i r m a n (R. C. Clothier, assistant to vice president, A. M.
Collins Manufacturing Co., Philadelphia, Pa., in the chair). Mr.
Trigg has asked me to express his regret at having been called away.
The international situation has brought some duties to him that
made it necessary for him to leave the meeting.
Mr. Fish has asked us to enter, into an informal discussion of his
paper, and we will set aside 15 minutes for that purpose. I will
take a minute or two myself.
I received from Dr. Gallagher a copy of this form, and had a chance
to look it over and apply it to our own company. There were several
suggestions that presented themselves to me. I notice particularly,
in the question of the transfer, that a person to be transferred must
have been promoted or must have failed, or there must be physical
reasons, or there must be a departmental fluctuation. I question
whether there should not be another division labeled “ Particular
fitness.” Of course, all this work is closely associated with voca­
tional selections; that is our job, to get the men and women into
work for which they are best fitted, and it is quite possible that our
original selections may be wrong, and that we may want to trans­
fer people later to another department, to take up work for which
they are best fitted. I have found in the last two weeks, since
receiving this form, that we have had to lose a large number of girls
on account of home conditions, their mothers being taken ill or
other such conditions, and I suggest the advisability of having that
included in this form.
Another division is that of 1‘General discouragement.” I have had,
within the last month, opportunity to talk with one or two men
who have left our concern and could not give any reason except that
they were discouraged. I interviewed those men very carefully,
and I did my best to get their point of view, and yet they could
give no reason for leaving except discouragement. That may not
be the experience of the rest of you; you may be better at getting
at the .real reasons than I have been, but perhaps you find that
there is need of such a division on this form. •
My last suggestion has to do with “ Regularity of attendance.”
The work must be gotten out, that is our first duty, and for that we
must have the men on the job, and we must have them on the job
as nearly all the time as possible. When a man is constantly and
regularly absent, especially on Saturdays and Mondays, the first



and second and third offense may be tolerated, but the time will come
when definite action must be taken; he must be more constant or
he must give way to somebody who will stay on the job. I there­
fore give that as a possible suggestion.
Now, has anyone any question to bring up in reference to this
paper ?
Mr. M a r k e r t , of the Emerson Co., N. Y. I would like to ask a
question with reference to the subject of furloughs. Suppose a
concern has a large number of men to furlough. Let us say your
pay roll at the beginning of the month was 1,000 and at the end of the
month you were going to furlough 250 men, say. How do you con­
sider the average pay roll for the plant ? Because on the following
month your pay roll begins with 750. Now, in two or three months
you are going to take on those 250 men again. It seems to me the
question of a plant average there is important, and I was wondering
how you would arrange that.
Mr. F is h . I might answer that question first, although I have
quite a number of questions here that have been handed me. That
was the idea in leaving the column, “ Laid off,” as separate from
those who leave of their own accord and those who are discharged.
Of course, to get the complete turnover you would have to take all
of these people in, but if we have one turnover for those who have
left of their own accord and another for those who are discharged,
then that due to lay-off can be figured separately, too, and we shall
have something that we can present to the management to let them
see what is going on. If the factory, we wTill say, had to lay off 250
men, due to fluctuation in the work or whatever else might make it
necessary to lay these men off (of course your question also covers
the people that are temporarily employed), that does affect your
total turnover, if you want to use it, but it does not affect the turn­
over for those discharged and for those who left of their own accord.
Mr. M a r k e r t . What arrangements have you with your pay­
master’s department, as to how it is to be marked ?
Mr. F is h . In my particular case the paymaster’s department has
nothing to do with that. The paymaster’s department pays the
men on the pay roll that the cost department says have worked.
Mr. M a r k e r t . I have a case where about two-thirds of the men
have given the company a week’s or two weeks’ notice. If those men
give a week’s notice and it happens to come in the middle of the
month there will be 50 new men, which increases your pay roll prob­
ably by 50, whereas the real number ought to be 750 instead of 800.
Mr. F is h . Of course, you have the difference there between your
pay roll and the number of men who actually work. I do not imagine
that any plant can give you identical figures for the number still on



tike pay roll, and the number actually working to-day. I would not
think that possible, because you would naturally keep some on the
pay roll that were out and who you hope will return.
Mr. T o l s t e d , of the Independence Inspection Bureau. Have you
any classification there of men who quit simply to get their wages
that are due ? For instance, I find that in Ohio, at the present time,
there is a great deal of quitting to get wages that have been earned.
For instance, a man works for three days, and then if he continues
to work he will not get his money for two weeks. He wants to get
his money as soon as possible. There is a three-day period which
must be added from the quitting time, and he wants to get his money
at the end of that three-day. period. If he quits Wednesday night,
say, he wants to get his pay Saturday. We find a great many men
quit on that account.
Mr. F is h . I think that would usually be classified in some other
way. I suppose you are referring to a man who wants to “ go on a
bat/' and in order to get the funds he throws up this particular job;
I think 99 per cent of those wbuld come under the head of “ Incom­
petent” or “ C a relessor some one of these things that we have
already defined. We do not always know that that is the reason
why he quits. Of course, sometimes he tells us that that is the
Mr. T o ls t e D c I had a m an ager tell m e th at 33 were qu ittin g in
order to get their pay.
Mr. F is h . If I were th e em p lo y m en t m an ager there I w ou ld sus­
pect that there was some other cause.
Mr. T o l s t e d . Would it be well to have a column at the extreme
end showing the number each day? That could be averaged, then,
for the month. It seems to me these headings at the bottom of the
sheet—“ Number of employees in plant on last day of last month,”
and “ Last day of this month” —might be misleading [indicating].
I think a good many might average those two and that might give
an incorrect figure.
Mr. F is h . One member of our committee was anxious that we
should do that, and of course that would give us the mathematically
correct denominator to be used for that fraction, but the majority
voted him down on the score that this would be near enough, because,
of course, all these figures on percentage of turnover are relative, and
the question of whether it is 114 or 114.2 does not make very much
difference in regard to the action we will take,
Mr. F l e i s h e r , of the Metropolitan Life Insurance Co. This is
essentially a factory form and I think if we try to solve problems of
dealing with other groups of employees, particularly a group of



salesmen, some of those headings do not readily cover the case.
For instance in the case of the salesman, it may be that he is not
lazy or incompetent; he may not have had the right chance—we
may not have put him to selling to the right people.
But the point that I think we are all most interested in is to fix the
responsibility for the severance of connection with our companies.
Is it our fault? Is it the employee’s fault? Is it the community’s
fault ? These are the three headings in which we are primarily inter­
ested. If the man is lazy, is it because he is ill ? If he is ill, are we
trying to remedy the condition ? If he is incompetent, is it the fault
of the school for not having prepared him to do the work in life that
will make him a valuable member of society ? Does he leave because
the community does not provide proper schools for his children %
A recent analysis of our own figures indicates that these three fac­
tors enter into any computation in this field. Could a form be ar­
ranged to indicate where the responsibility should be placed ? This
will make the problem of removing the cause of the evil more simple.
Mr. F is h . Speaking for myself, without regard to the rest of the
committee^ I think it is extremely doubtful if you can express those
things in any kind of form. That, it seems to me, reduces itself to
a study that must necessarily be made in order to handle our business
as it ought to be handled— of all reasons for leaving. This simply
classifies them in a general way, so you can get a bird’s-eye view of the
whole situation, and if you find that a given foreman, or the head
of a department, has lost a lot of men because they are incompetent,
you can begin to question whether that incompetence was inherent
in the people or whether it was because the foreman was not able to
get results. And then you have to study your individual case, and I
think you have to study your individual case almost always when
you get beyond the classification that a sheet of this kind shows you.
The particular thing you speak of I would classify under the head of
“ Incompetent.” The way in which workmen are incompetent might
make some other subdivisions, but it seems to me we already have
the sheet pretty cumbersome, and I think you should take these
things up personally.
The C h a irm a n . The time is up for this discussion, and we will
proceed with the next paper. We will have the pleasure of hearing
a paper by Mr. Boyd Fisher, vice president of the Detroit Executives’


The following tentative proposals for a real cost system for labor
turnover are offered for criticism. To date all estimates of the cost
of hiring and firing have been mere guesswork.
Mr. Magnus Alexander’s thoughtful paper in “ Personnel and
Employment Problems,” the only study of the subject, has been of
use in making up this system, but one is forced to point out that
his method of arriving at cost is more suggestive than authoritative,
and was doubtless not intended to be final. He uses the opinions
of experienced men, including his own, as a basis for arriving at
each element of cost. This procedure might be repeated indefinitely
without giving us anything reliable.
To follow the method here proposed will be expensive, but once
there have been accumulated reliable statistics on the subject the
process of correction and follow-up will not be costly. Furthermore,
the research can well be parceled out among various plants to render
immediate results of value. This, however, should not be mistaken
for saying that the extent of each element of cost is the same in
various plants. It is probably merely sufficiently the same so that
if several plants study each feature the average results will yield
an honest, average figure. Each individual plant must determine its
own cost to get accurate results for its own guidance, and must expect
the cost to vary somewhat from year to year.
Mr. Alexander estimated the cost of hiring a laborer at $8.50 and
an unskilled machine operative at $73.50. Thus we see that if his
figures are correct a 100 per cent turnover of unskilled machine
operatives costs as much as an 860 per cent turnover of laborers.
This difference in cost warrants our spending money and time to
get reliable data. Furthermore, it reveals how inconclusive is the
practice of stating turnover merely in percentages which lump
together turnover of all grades of workers. A definite knowledge of
cost will show us where we ought to place the greatest emphasis in
efforts to reduce turnover, and will guide us accurately in deciding
how much to spend on apprentice instruction, welfare work, and
improved employment methods, and especially give us knowledge of
an employee’s increasing usefulness to a concern as a basis for making
wage increases for long service.
It should be noted, in connection with the accompanying outline,
that no mention is made of the cost of rehiring former employees.



This obviously differs from the cost of hiring new men. The cost,
however, can be figured for each item precisely as with new employ­
ees. Former and new employees should simply be analyzed sepa­
I. What is meant by “ turnover ” :
1. The average standing pay roll for any given period should be given as basis.
2. In case there is a general reduction in the number of positions during the
period, the percentage of new employees to the average standing pay roll
should be taken.
3. In case there is an increase in the organization, the percentage of quitters to
the average standing pay roll should be taken. In the first case the amount
by which the number of quitters exceeds the number of new employees
accounts for the reduction. In the second case the amount by which the
new employees exceeds the quitters accounts for the increase.1
II. Variables in the cost of turnover:
1. Cost varies by classes of skill of employees hired—
A. Highly skilled, all-round machinists or master workmen—
(а) B-equire little instruction.
(б) Are easy on machines.
(c) Are economical with supplies.
(d) Soon reach normal output.
(e) Scrap minimum of product.
B. Semiskilled men— “ operatives ” —who have operated some one or two
machines just long enough to make production on those machines—
(a) Require instruction on new jobs.
(b) Are harder on machines.
(c) Are careless with supplies.
(d) Bo not soon reach normal output.
(e) Have high scrap average.
C. Unskilled operatives—
(а) Require still more instruction.
(б) Are deadly on machines.
(c) Are wasteful of supplies.
(d) May never reach normal output.
(e) Scrap as much as they produce.
D. Laborers—
(a) Require little instruction and get less.
(b) Don’t use machines.
(c) Can’t waste many supplies.
(d) Have short learning periods.
(e) Scrap nothing.
E. Clerks—
(a) Require as much instruction as UB .”
(b) Are about as hard on machines as “ B .”
(c) LTse cheaper supplies.
{d) Take as long as “ B ” to reach output but co^t less per unit.
(e) Use no product and hence waste none.
(f) Have a high factor of expensive errors.

1 R . A . Feiss, in Personnel and Em ploym ent Problems, p. 51.



II. Variables in the cost of turnover—Concluded.
2. Cost results will vary according to completeness of analysis. We should con­
sider the following items:1
A. Cost of hiring, the only item which has a tendency to go up with the
reduction of turnover, because it is the only factor on a “ production77
B. Cost of instruction.
C. Cost of added wear and tear on equipment operated by green hand3.
D. Cost of reduced production on machines operated by green hands, when
payment is not strictly proportional to output.
E. Cost of excess plant necessary to make up production lost on machines
operated by green hands.
F. Cost of scrap over and above the amount normal for experienced men.
We need not consider reduced sales due to delay in schedules or to spoiled
work because they are too difficult to determine; neither should we
count danger of strikes due to agitation among new employees, because
too occasional. But these things exist and should be considered, as
showing our other cost estimates as probably conservative.
3. Cost results will vary, according to length of time new employees are fol­
lowed up—
A. Hiring does not vary in this way.
B. Instruction usually is limited to an arbitrary time—two or three days.
C. The new worker probably requires around three months to get familiar
with machine in all respects, although this estimate remains to be
D. Up to probably four weeks the new employee improves rapidly. It
takes him probably six months to “ hit his best stride.” Not so,
however, with laborers.
E. The excess plant requirement is proportional to reduced production.
F. Excess scrap probably persists for a longer period than reduced produc­
tion, because most men acquire speed more quickly than accuracy.
G. Waste keeps pace largely with scrap.
4. Cost varies according to the type and value of the equipment used by new
employees, with respect to cost of—
A. Hiring—not so.
B. Instruction—true to a large extent.
C. Wear and tear—to very large extent.
D. Reduced production—holds true.
E. Excess plant requirement—especially and chiefly.
F. Scrap—to some extent.
G. Waste—to some extent.
Among the different classes of employees this variation is significant, as follows:
Class A. This is important, because they are likely to use expensive
Class B. Important for same reason.
Class C. Important.
Class D. Does not hold true of laborers, who use little equipment.
Class E. Holds true in less degree.
1 M y attention has been called, since this paper was read, to the omission o f the item o f cost o f acci­
dents incurred b y new employees. It should be considered in each of the places in the outline where
the following classification is used.



. Figuring total costs, while taking the above variables into account:
1. To figure cost of hiring—itemize—
A. Standard cost per employee for physical examination. Spread cost of
total number examined over total number hired.
B. Membership in employers’ associations and other labor bureaus. Spread
annual cost over number hired.
C. Clerical help and all other salaries of employment department. Figure
total number of men on 11live ” record during the year, whether em­
ployed or not. Subtract the total for average standing pay roll. The
ratio of remainder of names to the total on “ live” record is proportion
of cost of salaries which should be spread over the number of men
This subtraction of a proportion for employees on the pay roll is made in
recognition of the fact that there would need to be clerical work of
this sort, even if there were no hiring done at all.
D. Cost of advertising, trips out of town for men, office rent, new badges,
and miscellaneous, divided among number hired.
E. Cost of printing prorated over number hired according to “ C.”
These items do not vary according to length of service or class of skill or
types of equipment used.
2. Instruction—itemize—
A. Time of foremen spent with new employees.
B. Time of workmen detailed as instructors for handling machines.
C. Time of “ time study” men acting as occasional instructors for handling
Figure separately for an average month for each class of skill “ A ” to “ E .”
3. Wear and tear—itemize—
A . Time of maintenance department on machines operated by new employees
minus a constant factor of time for experienced employees. (Obtain
this factor by recording for a sufficient period the time of maintenance
men spent on the average with a selected group of employees of all
lengths of service over one year.)
B. Cost of materials used for repairs on machines operated by new em­
ployees, minus a constant factor of material, for all employees. (Ob­
tain as in “ A .” )
The above necessitates at least temporary use of job tickets for mainten­
ance men, with space on tickets to indicate time spent with new and
old employees.
C. Breakage and wear on tools, dies, and jigs used by new employees, minus
a constant factor for experienced employees.
D. Constant factor of cost per man for premature depreciation of machinery.
This can only be guessed at, but it may be more closely approximated
by a genuine research, which would—
(a) Take certain typical machines now worn out.
(b) Find out best records of wear from the makers.
(■c) Compare average wear in given plant; and
(d) Spread the difference over the number of new men who worked on
those machines during
(e) The actual life of those machines. Once determined by careful studies
and compared with the results of other students,* this could be made
a constant factor for each plant, or each type of machinery, rela­
tive to complexity of design. Figure all but the last point for average
month for all classes of skill, save laborers.



f ig u r in g


a n a l y z in g




III. Figuring total costs, etc.—Continued.
4. Labor cost of reduced production. This can not be figured exactly, but can
be, approximately, by averaging the results obtained by looking at th j mat­
ter from several points of view. I suggest the following—
A. First alternative—
(a) Determine by time study and standard practice the ideal capacity of
each machine and production center in terms of production per hour.
(b) Tn order not to charge up to turnover any loss of production due to
defects in scheduling, record the actual man-hours worked on each
production center for a given period and, thus,
(c) Arrive at total ideal output for that number of hours.
(d) The difference between this and the actual output is the loss due to
turnover and may be
(e) Prorated to the number of men hired for the period. Theoretically,
workers have been paid for ideal output. Price this reduced pro­
duction, therefore, at cost of departments in question of direct and
indirect labor. All other items of cost are elsewhere provided for,
under “ waste,” “ excess plant,” “ wear and tear,” etc. If a piece
price is paid, however, new workers, like old, being paid only for
work actually done, only the cost of indirect labor should be assessed
against the labor cost of reduced production. The above method is
not strictly true, but if the ideal machine capacity is based upon the
observed output of experienced operatives, it will be sufficiently
B. Second alternative—
(а) Select a number of machines worked by new men and an equal number
of like machines worked by men over a year in service.
(б) Record the production of each group until the total of the new men
reaches the total of the old men.
(c) Time required to reach this may be taken as average learning time.
(d) Total difference of production during this time may be spread over the
number observed and the average taken as the loss for the average
man hired.
(e) For men dropping out of the groups while under consideration substitute
other men with approximately equal production and equal length of
service. Separate observations should be taken for each class of
skill—“ A ,” '" B ,” “ C,” and “ E .”
C. Laborers can be figured in about the same way, namely—
(а) Take a set quantity of trucking, gtc.
(б) Compare the number of new as against the number of old men required
to do this fixed quantity.
(c) Drop men as they improve so as to keep output constant
(d) Until number in first gang equals number in old. This gives the
learning time for laborers, and the loss of production of average new
5. Excess plant cost of reduced production—
A. Assume that the plant investment required under present conditions will
bear the same ratio to total investment in plant which would be needed
if there were no turnover, as the production which would be possible
with the present equipment operated by all experienced men would
bear to the present actual output. In other words, if your reduced
production is 20 per cent your excess plant required is 20 per cent.
This is stated as axiomatic.
B. Find present total inventory.



III. Figuring total costs, etc.— Concluded.
5. Excess plant cost of reduced production— Concluded.
C. Figure on the basis of your present loss of production how much less
equipment would be necessary without labor turnover.
D. The difference may be used as basis for figuring the amounts of—
(a) Interest on capital.
(b) Depreciation.
(c) Power.
(id) Insurance.
(e) Rent.
( / ) Repairs.
Which are due to turnover.
E. Figure by shopB, as if separate plants, for each class of skill using equip­
ment and spread cost over turnover in those classes.
Excess plant cost and labor cost of reduced production should be figured
separately and then added together, instead of prorating excess plant
cost as a burden on the labor cost of lost production, because the burden
is not the same man for man, and department for department. Further­
more, in departments where wages are in proportion to efficiency,
“ excess plant” costs plus excess supervision constitute the sum lost
by slow production.
6. Spoiled work—
A. Select at random two equal groups of men representing evenly all grades
of skill save laborers, one a group of new employees, the other, of men
over one year in service.
B. Compare total scrap losses for each group until approximately even per
day period for some time. The point at which it begins to be even
may be taken as showing the average time required to reach normal
scrap record.
C. Subtract total scrap made by old men from total made by new men and
divide the difference by the number in a group to get total scrap per
new employee hired.
7. Waste—
Figure the same as scrap. The item includes waste of oil, cutting compound,
compressed air, etc.

Now, nobody has done this so far as I have heard. There is a
good deal of possibility that not many will do it, but although it is
going to be expensive to do it once^ it needs to be done only once in a
long period, certainly not any oftener than you ought to take a physical
inventory, and, I think not as often as that. I do hope, however, that
enough employment managers will apply this or a similar method of
examination into the cost of turnover to give people like Prof. Joseph
H. Willits and Mr. Ralph Wells and Miss Frances Kellor, and a num­
ber of the rest of us who are preaching the importance of a good em­
ployment department, figures that we can wave in front of the faces
of the factory managers and say, “ It costs you so much for the turn­
over of labor and we can prove it.” It seems that there are a large
number of managers who can be convinced only by combining an
appeal to their altruism with an appeal to their pocketbooks. I agree
103021°— 17— Bull. 227-------5



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with Miss Kellor that the appeal to the pocketbook alone does not carry
very far. I agree with Mr. Morris L. Cooke that an appeal to their
altruism will get managers out of their seats every time, but I am sure
you want to do more than to get them out of their seats. You
want to make them go back to their plants and do something, and
I feel that the only effective appeal is an appeal to their altruism,
combined with the figures as to cost.
So I believe that, considering the great extensions we are now
demanding of factory managers, unless we have more than mere
estimates of the cost of turnover, we can not proceed much further
with complicated methods of personnel management.


I take great pleasure in calling on Mr. Tead.
of Valentine, Tead & Gregg, Boston, Mass. I
would like to say a word or two concerning each of the addresses to
which we have just listened.
In the first place, concerning the compilation of labor turnover, it
seems to me in considering and criticizing forms the question we
should ask concerning these forms is what the weak spot is or what
the weak spots are in the organization. What are the causes of
turnover which we want to reveal and indicate to the responsible
management ?
Our turnover figures should be an index of the efficiency of the
employment department. If that is the case, it seems to me that
there is considerable soundness in the contention made by the
gentleman from the Metropolitan Life Insurance Co., when he said
we should consider the causes of leaving rather than simply whether
a man leaves of his own accord or is discharged—consider them as
personal causes, company causes, and those which might be called
community causes.
I have not the time, and this is not the place, to go into an elaborate
discussion of the admirable form which Mr. Fish submitted, but I
would like to submit for your consideration, that in the analysis of
“ exits” in Mr. Fish’s blank it would be a more effective and usable
document from the point of view of the management, if, however
arbitrary the final result might be, we divided the causes of leaving
into personal causes without any fault, personal causes with personal
fault, and company causes.
Let me explain what I mean, and why I use those terms. If in
your labor-turnover figure your final per cent, or any other per cent, is
to indicate the efficiency of your department and is to indicate the
weak spots of the organization, it seems unwise to include in the
final figure those causes of leaving for which no one is respon­
sible. It seems to me, therefore, that to bring them together and
deduct them from the number hired, before figuring your per cent,
gives a much more fair and indicative figure. For example, if we
deduct the number leaving on account of death, marriage, moving
away, unpreventable sickness, better positions, and other miscella­
neous causes, from the number who are hired to replace losses, we
are then in a much better position to consider what are the causes
which can be removed—which is, after all, what we are trying to
C h a ir m a n .

O rdw ay T ead,




ascertain—than if we simply lump them in this somewhat indis­
criminate way. We can then classify company causes in some such
way as accidents, occupational sickness, disagreeable character of the
work, wages, not adapted to the work, and any others; and personal
cause with fault, as laziness, irregular attendance, drunkenness, dis­
honesty, and others. It seems to me that to separate them in some
such way rather than into the almost bewildering analysis treated
in the second half of this turnover sheet that Mr. Fish describes,
is a much more helpful way of getting at the problem. At any rate
I submit it for your consideration.
The other suggestion that bears on these forms is an item giving
the employment of those who leave and the length of employment of
those who stay. There is a method of compiling that on a sheet
about the same size as the turnover sheet, which does not unduly
complicate your record but gives you important information which
is highly illuminating as to that phase of your turnover, and which
it seems to me should be added to the figures which Mr. Fish’s blanks
call for.
Another line upon weak spots in organization will be necessary,
because in particular departments or particular places a high turn­
over will be seen to exist. It seems to me, therefore, that the form
should be sufficiently flexible to adapt it to specialized treatment of
the particular problem for several months.
For example, you might want to know the turnover for a par­
ticular job in some particular room at some particular machine, and
your form should be adjustable, so as to allow for that particularized
To illustrate what I mean, one department in a textile factory
showed an abnormally high turnover. The employment manager
looked into it and by keeping figures by jobs, found that the turn­
over was altogether among the coal passers; and he found that the
company was paying coal passers ten cents a day less than the rail­
road was paying coal passers, a little way down the road. There­
fore they increased the wages of the coal passers 10 per cent and
stopped losing them. That indicates that this analysis of turnover
by jobs will often prove helpful in getting at the cause of any large
percentage of turnover in any department.
Just a word in closing in regard to a possible suggestion of an addi­
tion to the memorandum that Mr. Fisher has just presented. I
would like to submit for consideration that another item in the cost
of turnover might very well be those accidents which cause disability
up to a certain arbitrarily defined time, which might vary and would
vary considerably from industry to industry. For example, the
expense of accidents causing disability for periods up to two or three
months would be charged to the cost of turnover. It would seem



also that whatever special expenses, with relation to discharge, are
included should also be itemized. It may be that they are included in
the figures as given. As items in that cost should also be added the
work in the paymaster’s office for specially paying off, the special time
that foremen have to give to adjustments, the time that the employ­
ment office used, and the time required for transfers and discharge.
1 have an interesting illustration of one method of compiling one
item of cost w^hich I recently obtained from a textile concern.
The employment manager had an individual card for the name of
each new employee in an occupation, which, in this particular in­
stance, was spinning. This card showed the number of weeks the
person was there, the wages paid, the wages earned, and the cost of
A special instructor trains the new spinners. The spinner is paid
a flat rate of $7 per week for three weeks, which time she requires
to get to earning, on the piece basis, at least $7. The first week she
is familiarized with the routine and earns nothing. The cost is $7.
I may say that this is not an attempt to make a carefully itemized
statement, but simply to find out what the cost is in production.
The second week she may earn $2.25. In that case the cost is the
difference between $7 and $2.25, which is $4.75. The third week
the spinner perhaps earns $7. The difference between what is paid
and what is earned is listed in the cost column. This is continued
for eight weeks. That difference amounted, in the figures shown me,
to between $60 and $80 per employee. This wTouid seem a rather
large sum, but, for my part, I could not but see that it had been
reached by a sound method of compiling.
The C h a ir m a n . Mr. Tead says he will be glad to answer any
questions that are presented, and we will give 10 minutes to that.
Mr. F is h . I would like to answer one or two things that were
brought up, because I teel that this committee went over pretty
thoroughly all of the things that Mr. Tead has suggested.
Evidently we did not feel that this percentage of turnover, what­
ever method it was figured on, was an index or should be in any way
considered the index of the competency or incompetency of the
employment department. It is a method of presenting to the man- ,
agement conditions in our shops, in our offices, in such a way that
they can give us the authority to go ahead and fix those things.
When that has been done, if there is any glory, we would, perhaps,
like some of it, but the glory part is the last thought we have in
doing it. We are working for the concern and in the interest of
the concern, and we are trying to get the cooperation of other people
in this respect, and if we succeed in getting the cooperation of others
the credit will probably come irrespective of whether anybody thinks
this is an index of our ability or not.



Then on this sheet for turnover, any attempt to classify these
different things under the heading of whether avoidable or unavoid­
able would depend so much on the concern which is using it that it
would be necessary' for each concern to have a sheet printed for
itself. We were attempting to get out something which would be
used by as many people as possible and to as good an effect as
possible by them, and therefore we thought our classification, possi­
bly, was workable by a large number of people. I, perhaps, was the
strongest advocate on the committee of doing the thing the way
Mr. Tead suggested, but the arguments of the others overcame my
opposition, and I came to-see it in the way they did. I am fully
convinced now that it is best to leave that as it stands, because in
so many cases the management may say, for instance on the ques­
tion of distance of homes, “ Well, we built our factory here knowing
that there would be trouble about getting help; we built it here
because land was cheap, because we could get land enough, and so
we could have opportunity for expansion. We faced that thing
years ago, and you can not tell us anything more about it.” And
that is true with a number of these different things and different
R a l p h G . W e l l s , secretary Employment Managers7 Association
of Boston. I was very much impressed with Mr. Tead’s criticism of
the blanks. I think his suggestion that the different causes should
be segregated into two or three groups is a very good one mathe­
matically, and perhaps from a scientific standpoint, but it occurs
to me that there is one danger. While I agree that we are not
getting turnover figures necessarily as an indication of the effi­
ciency of the employment department, we want to get turnover
figures from different causes as an indication of conditions in the
plant, and if we divide the total turnover percentage into two or
three parts there may be a tendency on the part of the employment
manager, and also on the part of the management itself, to use those
divisions as an excuse to escape or get out of doing certain things;
that is, if a plant has a total turnover of 80 per cent, 30 per cent of
which is due to the personal reasons, the manager who is holding
back a little bit may say, “ Oh, well, my turnover is only 50 per
cent.” It seems to me also that in the handling of the personal
reasons for leaving, which we may be inclined to consider as being
due only to the employee, the management and the employment
department should also realize that if you handle the employee
properly, as Mr. Fisher suggested, or do as Mr. Henry Ford
does—pay a large enough wage—you will find that the personal
reasons will figure hardly at all. A great many of the causes of turn­
over that we might call personal reasons, such as the conditions at
home, can, I think, be obviated, by the use, say, of a visiting nurse,



or by investigating unexcused absences, and if the management is
willing to address itself to certain things that are not necessarily
plant causes, I think it is highly desirable that we should carry all
the figures straight through and make it a total sum, so that it will
be as severe an indictment as possible.
That is what I wanted to bring out. I think in regard to this
blank, the question of the long service is very important. One of
our members, Mr. Gardner, of Cheney Bros., has drawn up a blank
similar to this, which covers leaving, by length of service, and I
think, as Mr. Tead does, that it is exceedingly valuable for any plant,
in addition to these blanks, to keep a record of those leaving, by
length of service.
The C h a ir m a n . Would you like to say a word, Mr Gardner?
H . L. G a r d n e r , employment manager, Cheney Bros., South Man­
chester, Conn. I think Mr. Wells has covered the subject very well.
We keep at the Cheney Bros.’ establishment our tabulations of labor
turnover under the classification of male, female, married, single,
length of service, nationality, and operations in different departments,
That can all be done on another sheet of this same size, as the turnover
sheet and at the same time. I think if the Library Bureau can be
induced to print not particularly my submitted sheet, but a corrected
sheet, we can get the whole thing in one fell swoop.
Mr. W e l l s . If there is a sufficient demand for sheets additional to
these two I think the Boston association will be very glad to go
ahead and draft them along the lines suggested by Mr. Tead and Mr.
Gardner and see if we can not arrange with the Library Bureau to
publish them in connection with these other two.
D u d l e y R. K e n n e d y , director, labor department, B. F. Goodrich
Co., Akron, Ohio. In the address I am to make to-morrow morning I
expect to show some lantern slides of the Goodrich Co., Akron, Ohio.
Some of you may have seen them. From these slides you will see
that the whole thing is kept on one sheet, a little larger than that of
Mr. Fish, by using a cross-index system. This gives the reasons
down the left-hand column, where I think Mr. Fish now has “ Depart­
ments” [see Form 1, facing p. 55]. Reversing his process, by putting
the reasons down the left-hand column, and then taking the other
factors and putting them along the top, and keeping a short inventory
as he goes, he would have the whole thing.
We use the nationality, married or single, length of service, whether
a man owns his home, rents his home, boards, or lives with his
parents, and we have analyzed the thing as fully as we wanted to go
with it, and in the end we have a cross-index digest of the whole
thing every month.
The C h a ir m a n . Mr. Tead has one word to say in conclusion.



Mr. T e a d . It occurs to me that if anyone is interested in seeing
what practical form the criticism I have made of this record blank here
will take, he can, I think, if there are not too many, be supplied with
a similar form that is in use, is about to be put in use, by the Plimpton
Press in Norwood, Mass., and I will see to it that anyone who applies
there is allowed to have one of these blanks.
The C h a ir m a n . I have a question from Mr. W. F. Winan, of the
National Carbon Co.3 which he wants presented to Mr. Boyd Fisher.
The question is, What percentage of working force is involved in
larger portion of labor turnover? That is, are the majority of
“ quits71on a relatively small number of jobs ?
Mr. F i s h e r . Of course I think the answer to that will vary in
different plants and different departments. A while ago Mr. Tead
mentioned the high turnover among the coal passers, and in any
plant you will find that the turnover shows up especially in certain
departments or at certain critical length of services, or as the result of
certain conditions, or as the result of treatment by certain foremen.
The reason for a turnover blank like this—together with space for the
recording of some other items I have suggested, namely, the length
of service by weeks, months, and years, whether married or single,
the nationality, whether they own their own homes or not, a lot of
other things you may take up statistically—is to find out what are
the special causes for turnover, and wherever special causes obtain,
you will find that results will be special, of course; that is, you will
have a high turnover in this department, a high turnover in this class
of workmen, and ahigh turnover at a given time among this nationality
of workmen, and I think the answer to Mr. Winan’s question is, Yes,
you do have a higher turnover in some cases in some departments
than others. I think by and large you may state it as a principle,
that the highest turnover comes—this is so obvious as to be funny—
among new employees. When you analyze it you will see that it is
all right, that if you have kept your employee a year you are likely
to keep on keeping him.
And so there are certain dangerous operations, occupations, which
the workmen themselves recognize as being dangerous and try to
avoid; although I think I will never forget the case of one man in a
motor factory in Detroit who died of tuberculosis—probably brought
on by reason of the fact that he worked in connection with a sand
blast—and his dying request was that his son be given this job.
The C h a ir m a n . I will go on to the second question. I would like
-to present to Mr. Fisher a question of Mr. Edgar M. Hawkins, of
the M. D. Knowlton Co., What is the unavoidable turnover
percentage ?



Mr. F i s h e r . That is like asking, What is the standard of living?
I must say that I would like to “ pass the buck” on that, and I think
I shall. I believe that Mr. Alexander figured 21 per cent as the
unavoidable turnover of labor. Mr. Tead dealt with that also.
It is quite obvious that there is a certain percentage due to deaths,
and to certain community causes which may conflict, from time to
time, and to certain personal reasons, which are the results of
inefficiency of the employment departments. Mr. Alexander says
that 80 per cent is a reasonable efficiency to demand from a highgrade employment department. I think it is unsafe—I agree with
Mr. Wells that it is unsafe—to consider an unavoidable percentage
of turnover. I think you ought to act as if all of it were avoidable,
because you can not put your finger on any given section of it.
You can not even say that death is inevitable. I would see the life
extension institute and avoid a part of that.
The C h a ir m a n . The third question is from Mr. Meech. The
question is, Is it advisable to have men or women as instructors of
women? Will Miss Gilson answer it?
Miss M a r y B a r n e t t G i l s o n , superintendent, employment and
service department, the Clothcraft Shops, Cleveland, Ohio. We have
instructors, both men and women, in our organization to instruct
the new employees, and we have found them perhaps equally good.
We have found it of advantage for women to do the instructing in a
number of the departments. We do not feel that we can attract
the right type of women employees unless we offer them an oppor­
tunity, and we have found successful results. I wish all the managed
associations would be as broad.
Mr. F i s h e r . I want to say before we adjourn that I accept both
of Mr. Tead’s amendments to that cost system. I think the cost of
accidents should be taken into consideration, and also some portion
of the cost of discharges.


The C h a ir m a n . It gives me great pleasure, first, to see the assem­
blage we have, and, second, to feel that all I have to do is to introduce
another man and let him do the work. It is a great pleasure to me
personally to introduce to you our toastmaster, Mr. Morris L. Cooke.
The T o a s t m a s t e r . Josiah Royce, shortly before his death, speak­
ing to Harvard students, said: “ Rejoice when you find yourselves a
part of any great ideal enterprise.” Now, it seems to me that you
men and women that have gathered here to-night can rejoice in the
fact that you have a part in a great ideal enterprise. There is an
ideal side to it and I doubt if it could have been presented in a more
masterly way than Mr. Alexander presented it this morning. Mr.
Alexander would be the last man in the world to say that it stopped
there. In fact, the motive power back of his inquiry was of the
other kind, the search for the ideals of democracy.
I know it is a popular thing to say that you have to show the
money side of anything in this country in order to give it the widest
vogue and make it succeed in the shortest possible time; but I think
any analysis of this movement, any study of the history of this move­
ment, will prove that the men and women who have made it what
it is to-day have brought it there in a wonderfully short space of
time, have almost without exception been actuated by ideals, and
when they have brought out the money side, the economies that have
been produced by the work that they have been doing, have rather
felt like apologizing for it.
Now, there must be a number of people here this evening to whom
the word “ unemployment,” as we use it here, has an indefinite mean­
ing. In my own thought as to this part of industrial activity, I say
to myself we have had up to the present time three important men
in industry. We have had the sales manager, the financial man, and
the employing man—it doesn’t make any difference what you call him.
Now, we have introduced a fourth element into industry that we
call employment, labor, or personnel, and it is this fourth arm of
industry which has brought us to Philadelphia for these discussions.
In this connection I want to suggest to you that this matter of
terminology is not significant. I remember that when I was doing
. 74



some work in a plant near Boston I was waited on by a group of
young women who worked in one of our departments, and they said
they objected to the term “ gang boss.” They not only objected to
it but they felt it was inconsistent with the whole theory on
which we are all trying to work. I agreed with them, and personally
have never used the words “ gang boss,” either gang or boss, since
that time, and feel that the equivalent terms “ group” and “ coach”
much better carry out our thoughts.
Somebody told me they were in charge of the labor bureau of
such and such works. I believe that is a mistake, because you are
right away drawing a distinction between different classes of people,
and there is no fundamental distinction. Therefore I hope in our
further figures in this work that we will attempt to consider even
such things as terminology, and that we may ultimately arrive at
a synonym for employment, if employment is not just the word, and
personnel happens to appeal to me as one which will better express
the idea that is in our minds.
Just one thing more before I give you a chance to hear the real
speakers of the evening. The workers of the world are restless;
they are asking for things they have never had before. I do not
like the use of the word “ demand,” but in some quarters they are
certainly demanding it.
We have in this country at any rate some degree of political
democracy, but any close analysis of our industrial conditions, the
conditions under which the greatest amount of industrial work is
conducted even in this country, will satisfy the student that we
have not even the beginnings of an industrial democracy.
Now we must crawl before we walk, but, if I am not very much
mistaken, in the hands of the people in this room to-night lies the
task of laying the foundations in this country for a genuine industrial
Mr. Fisher in his remarks this morning spoke of the solemnity—
perhaps he did not use that word, but he used a word very much
like it—which he would throw around the matter of the discharge of
an employee, and in that part of what he said I certainly fully agree.
It has never come to me just that way, but it seems to me that
an event such as the separation of a man from his livelihood and
his opportunity for a career ought to be a solemn thing. But then
Mr. Fisher advocated something that I believe is an error. He said
before anybody is discharged a committee must be appointed to
vote on the matter. Now, gentlemen, it seems to me that right there
we depart from what should be the future of industrial democracy.
We must fight for an individual leadership which is supported by the
group, and not for group leadership. And it is only as we interpret that
to the industrial classes in this country— and I make no distinction



between the president of the company and the porter—it is only as we
interpret to the industrial classes of this country the efficiency which
goes with the right of the individual to decide when he is ready to
decide, with opportunities for appeal and review and reversal, that
we will really get what we are looking for, the maximum of produc­
tion—because in that, after all, lies the future of society.
I take great pleasure in introducing to you our first speaker, Mr.
Henry S. Dennison.




As the work of the mechanical engineer has been to the physical
well-being of this country and of all countries, so I believe the work
of the social engineer will be to the mental well-being of the people
of this country, and as the work of the mechanical engineer and the
civil engineer has prepared the way for the work of the social engineer
by making it possible to create a surplus over the bare needs of sub­
sistence, so I think the work of the social engineer in another five
generations, ten generations, perhaps, will clear the path for the
higher work for spiritual well-being.
I remember the growth of the purchasing agent even in my own
connection with business. When we first spoke of having one
purchasing agent for our concern, the scornful giber told of the
qualifications that would be necessary for one man to do all the buying
for any such company as ours. It was an absurdity of course and
he proved that there could not be any such thing as a purchasing
agent for the whole company. Now the job of employment manager
looks at the beginning to be just about as complicated and to require
as many impossible characteristics as that of purchasing agent;
or, again, as the mechanical superintendent when we first proposed
that he should have general supervision of the machines in a shop.
I want to show my own very intense belief in the endless oppor­
tunity that is presented to you as social engineers within the concern
and outside the concern. I have a feeling—and more than a feel­
ing—that the work that lies before you, the opportunity for service,
is so great that it will warrant any amount of overtime or over-effort
that you may put in to hurry along this natural development and
reach your fields of big opportunity as quickly as you can get there.
Inside of your factory or your store there are, as you know, a
hundred opportunities for betterment, that you have come here to
get light upon, to study more in detail. I want to bear down for
just a moment on one in particular, not that it is most important,
but it happens to be the one that is nearest my heart. This is the
function of foremen-choosing and foremen-training. I think here
is a great chance for study, a great chance for betterment. To the
employee the foreman is the company. I do not care how splendidly
humanitarian the head of the company may be or how well he may
mean, how fair he may be, the connection of the employee with the
company is the connection of the employee with his foreman. If




the manager gets around once in two or three months—perhaps that
is all he can average in a large concern, to see each single individual
and have a word or two with him—if he happens around once in
six weeks, that is pretty nearly overcome by the fact that every
hour in the day and nearly every minute in the hour the foreman is
rubbing against that employee; and if that contact is unsatisfactory,
no ideals, no general management policies will ever quite overcome
its bad effects.
Now, we have not chosen foremen in the past scientifically. We
have not used either the Blackford system or the Scott system. I
understand that they are sharply contrasted.
We have usually chosen the foreman from among the most skilled
workmen. Now, in other walks of life, in the matter of committee
chairmen, for instance, in a chamber of commerce, it frequently turns
out that the most skillful man is the poorest chairman. He either
wants to do all the work himself or else, perhaps, he knows so much
about it that he can not listen to any point suggested by anybody
else. The same general points hold true in regard to a foreman. If
he knows so well how to run a machine or all the machines under him,
he is usually impatient with those who never will attain his own
degree of skill, and because he knows his machine so well he.nqver
quite gets to know his man well enough. The foreman is there to
handle the men and the men are there to handle the machines.
Now, of course, Mr. Cooke has his answer ready—functionalize
your foremanship, don’t have foremen in the sense I am speaking of
at all, and the whole question is solved. Well, while reaching that
point we still will have some of the old-fashioned foremen, and let us
then, while we still have them, use all the sense we have in choosing
and training them.
But if your work is to be anything more than of the day and for
the day, if it is to lead on, there are two big visions that must be
before you. Somehow, nobody knows how, I think, we must make
up the loss of the joy of craftsmanship; somehow or other we must
put back the joy of work which arises out of that absolutely funda­
mental human instinct, the instinct of workmanship, or craftsman­
ship. Secondly, we must build up, slowly, as Mr. Cooke has said,
the spirit of democracy. We must get the spirit of democracy into
You will take the first step toward finding some way to make up
for the loss of craftsmanship in your attempt to fit your men, better
and better, to and for their jobs, and then from that the second step,
and so on.
The building up of the spirit of democracy will follow any honest
effort of an employment manager. It is the spirit of democracy that
I speak of. A plan for industrial democracy I do not believe exists



to-day. If it is to come it will grow out of the spirit, it won’t come
first. Any system— as profit-sharing system, bonus system, scientificmanagement system—as every one of you here must know, has its
distinct limitations. It is only a system, only a tool to be- used by
a human being, and the spirit in that human being is so much more
important than the system that we have found in dozens of cases a
first-rate profit-sharing plan scheme entirely unsuccessful and a
hopelessly unscientific profit-sharing scheme working splendidly.
Any plan, if it is good, is an expression of a spirit. Now, the spirit
of democracy we can look for, whether we know any plan for it or
not, and for a definition of that spirit of democracy I am indebted to
two men almost equally, to Richard Feiss and to Thomas Carver. I
had landed almost on the page—had not quite reached the page—in
Carver’s Essays in Social Justice that gives a splendid notion of
social democracy, when I read Feiss’s letter in the Bulletin of the
Taylor Society which referred to it, and to both I am very deeply
indebted. You must read it, I shall not try to paraphrase it. But
there are two essentials I shall emphasize, that the spirit of democracy
calls first for an open and equal opportunity for everyone to reach
the highest position he is fitted for, and for anyone who is fitted for it
to reach the highest position in a concern—an open and equal oppor­
tunity , and second for responsiveness in the leader—the keen aware­
ness of the leader to the feelings and thoughts and spirit of the
people he is leading.
With those two essentials of the spirit you can have almost any
form and you will have the beginnings of industrial democracy; and
there is no finer example of industrial democracy to-day than Mr.
Feiss’s own plant.
Inside your factory or store you will have to face, if you face this
issue of democracy, that very difficult question of absentee owner­
ship and absentee management. It is perfectly apparent to my
mind—whatever it may be as a scientific fact, I can not break
away from it—that if the concern is managed by directors who do not
live there you can not get the touch of true management. If the
concern is owned by stockholders who never visit it and do not
know where it belongs, as so many do not, the ultimate control,
the ultimate ownership resting in their hands, will always make
a chasm between the working force and that so-called “ owning”
body of men. There is a problem big enough for a national associa­
tion of its own.
In * word, if you are going beyond to-day’s work in your jobs—
and every one of you is—you will be recognizing that the best em­
ployees, the ones you want, do not live for or by bread alone. Something
more than the idea of the money return has got to be in a company
if they are going to get the best men, and through that attempt to



put in more than the money feature you have the responsibility and
the opportunity of rebuilding a human contact in industrial con­
cerns that has been lost through growth in size, and you will human­
ize industry. You will give the corporation a soul, which it ought
to have.
To put a soul into a corporation you say is a pretty big contract.
Perhaps I have made my specifications for an employment mana­
ger more exacting than Mr. Alexander's—but you have to do it, if you
are going to do your job—whether it is a big one or a middle-sized
one or a little one, it has to be done.
Then here is a bigger one, outside of the company, outside of your
factory and shop—you employment managers are going to see some­
how that the big gap in our political structure, which has been left
yawningly vacant by the business manager, will be filled. In our
political life the lawyer has always been represented; labor, through
keen organization, has been represented, and the social scientist has
been pretty strongly represented of late years; but those who have
been at the various statehouses throughout the East, and throughout
the West too, realize the absence of any thoughtful presentation of
the point of view of the employer. He tried ir the earlier years to
fill that gap with his money, and he tried late* to fill it with his
lawyer, but did not even fill a chink. The benefit of the views of the
business manager has been badly needed in legislation, and not a
business man in the country who has not gone up and studied the
laws and fought his fight for or against them has a right to whimper
about the undue influence of labor or the long-haired reformer, unless
he is willing to get into the game and work as hard as they and make
his contribution. Certainly they will have their influence if they are
there and know something about it, but the employers have not been
That gap has got to be filled and you should see that it is filled.
Why you ? In the first place, your problem is simply one part of the
whole problem of social structure. Your problem is simply part of
and parallels the general political problem. Your problems of labor
stamina, of the ability of the individual laborer to do the work, have
their parallel in the sanitary conditions and the laws that regulate
them, in the laws attempting to face the problems of the “ underwage” and the evils that arise therefrom. Your problems of absence
have direct connection with accident prevention and with sickness
prevention. The labor-turnover problem suggests the possible pre­
vention of unemployment. I know that people think it is silly to
talk about preventing recurring cycles of unemployment, but unem­
ployment has to be prevented, and we have to take steps in that
direction. Your problems of old-age disability, of handling the long­
time employee, touch the old-age dependency social problem, the
problem of the old-age pension.



These particular political problems that I have mentioned—com­
pensation, health insurance, pensions, and the like— are just the
points of contact'that the business man would use and must use in
beginning to take up his share of the political load. You must
spur him on now, to-day, to take up his share of that load, to get
into those problems, honestly, to get in all over. I am not a bit
afraid that he would get in selfishly if he should ever get in. But
when he cheerfully goes to the statehouse and says, ‘ ‘ I never read
this bill and I don’t know anything about it, but I don’t believe
in it,” he can n6t help being selfish. If employers will study the
social problems we are facing and must face in the next dozen years,
their contribution will be of inestimable value.
You yourselves will soon be the business managers, as Mr. Alex­
ander has promised you, and then you will take your part in these
political problems. Seriously, I look forward with great hope to
the day when that will be more and more true; that is, when the
man coming up through the human side, the man handling the
questions of personnel in industry, will become the business leader,
and not the man that has come through either the cold mechanical
side or the colder "financial side.
Then, through’xhe industrial and commercial structure, and out
into the political and social structure, your opportunity beckons to
you. A small gr^up now, even this roomful, for the job it has got
to tackle, a smo group, and mightily ignorant of its work, but
conscious of that ignorance and determined to overcome it, this
group here perhaps is the first in the newest and possibly the greatest
profession—the social engineer.
The T o a s t m a s t e r . We have with us to-night a speaker from the
Plimpton Press, Norwood, Mass., and it seems to me that in the
Plimpton Press there is a moral for every employment manager.
The Plimpton Press, from the time when it began its reorganization,
some 10 years ago, has sought in every possible way to help other
industrial plants, and I can see before me to-night a great many
men and women who have gathered instruction from that plant.
If I were giving a suggestion, a concrete suggestion, to an employ­
ment manager to-night I think I should suggest to him that he try
to get somebody to help some other employment manager in his
problems, because the moment you start to help somebody else
with his problem you have to have something to help him with,
and the reflex action of having
bring people in on your problems
always pays in large measure.
I have the pleasure of introducing our next speaker, Mrs. Jane C.
103021°— 17— Bull. 227-------6







The manufacturing of books is the business of the Plimpton Press
and this industry is divided into three classes of work: Typeset­
ting, printing, and binding. About seven years ago the Taylor
system of scientific management was introduced, and at the same
time an employment department was established, whose immediate
object was to centralize in one department the hiring, disciplining,
and discharging. As the new system of management by gradual
processes effected economies in the cost of production, so the employ­
ment department enlarged its scope and in time became responsible
for savings in the human cost of this industry.
One of the early results of the improved methods of handling
materials, routing, etc., was to show that the plant was overmanned
and the number of people employed was reduced from between 800
and 900 to approximately 500. This change took place over a period
of three years and was not brought about by discharging. When an
employee left, he was not replaced by hiring a new worker, but by
transferring from within. The working force at the present time
numbers about 500, 300 of whom are men, while 200 are women.
The management of the Plimpton Press, realizing that a large
part of the workers’ lives is spent within the factory, endeavors to
make the surroundings acceptable. The workrooms are high, and
there is no crowding of workers; in fact, more space is allowed to
each person than usually is found in offices or classrooms. This
fact of ample room, especially around each machine, accounts in
large measure, we believe, for the low percentage of accidents. The
workrooms are well supplied with windows and these furnish proper
light and ventilation. The entire lighting system, both natural and
artificial, has been studied by experts, and workbenches and ma­
chines are so arranged that no eyestrain can result to the workers.
The nature of the work is clean and there is an ample force con­
stantly at work to keep the factory clean. This effort meets with
much approbation on the part of the people, who readily complain
of any omission. The lighting, ventilation, and cleaning are a part of
the responsibility of the factory nurse.

A trained nurse is in charge of the hospital, including an office,
a rest room, and a surgical room, located in the central part of the
factory. Here all accidents and illnesses are cared for. The acci82



dents consist chiefly of minor cuts and bruises, and since these are
given proper care at once, the danger from infection is minimized
and very little time is lost to the worker because of accident hazards.
The bookbinding industry, owing to its use of heavy machinery, is
not as a whole free from maiming injuries. The low percentage of
such injuries which we have experienced in the last eight years we
believe is due to the following causes: Proper lighting, ample work
space, guarded machinery, care in selection of operators, and freedom
from hurry.
In addition to the first-aid service, the nurse performs much
preventive and educational work in the plant and social service in
the community. The personal contact resulting from the various
activities of the service department has made it possible to get in
touch with home conditions. The visiting of homes was brought
about gradually and at first only by the expressed wish of the individ­
ual. Now such visits are welcomed and the nurse visits all who are
away from work more than one day.
The results of the work of the nurse can not be overestimated.
She has greater opportunities for close relations with workers than
has any other person. She hears directly and indirectly of dissat­
isfactions which would not otherwise be known. When her vision is
broad, she brings about a sympathy between the viewpoints of the
employer and employee.

A large part of the work done by the Plimpton Press is the
making of school textbooks, and the seasonal character of this work
is due to the fact that school boards make their adoptions late in the
school year. In consequence, the peak of the production curve oc­
curs during July and August and the lowest point during January
and February. This in turn affects the workers, as some reduction
in the force and in the hours of employment is inevitable. Every
effort is made by the sales department to counteract this condition
by procuring work for the dull season, and a measure of success is
resulting. Besides this, the following methods have been adopted:
Every worker is taught several operations so that he may be trans­
ferred from one department to another as the work fluctuates; the
minimum force is retained as the permanent force; and this force is
increased only when absolutely necessary. In this minimum force
there is very little turnover, 81 per cent of the entire number having
been in the employ of the Plimpton Press over five years; 27 per
cent, over 10 years.
The work hours are from 7.30 to 5.15, or eight and three-quar­
ters hours daily, with one hour allowed for lunch, except on Satur­
days, when the hours are 7.30 to 11.45, making 48 hours per week.



This applies to all workers. There is very little overtime and no
Sunday or holiday work.
Rest periods of 10 minutes morning and afternoon are given to
routine workers, such as monotype keyboarders, gold layers, and the
accounting force, and during this time the windows in these rooms
are open. These periods also furnish an opportunity for the worker
to take some exercise.

The Plimpton Press is located in a community which is able to
furnish a large part of the necessary supply of labor. The policy of
filling vacancies by promotion within the ranks results in the hiring
chiefly of unskilled workers who usually are young. Through friendly
relations with the public-school officials and teachers, a valuable
source of supply for this type of employee is available. Another
equally helpful source is found in the present workers who are glad
to recommend their friends. In addition, many applicants come of
their own accord to apply for work, so that there is a long list of ap­
plicants ever available. Under terms of agreement with the tradeunions, they have the privilege of supplying workers from among
their number, provided they can fill the requirements. If a skilled
worker is hired, he usually is obtained in this way.
All candidates for work, except porters, must be English-speaking
and have the equivalent of at least a grammar-school education.
Each applicant is interviewed by the employment department and
asked to fill out an application blank which is kept on file. On the
back of this form are later written the impressions of the interviewer
and such other information as may indicate the desirability of the
applicant. In this interview, an effort is made to make the appli­
cant feel at ease in order that we may judge of the natural person.
It is most desirable to know something of his tastes, his natural apti­
tudes, and his ambitions. One of the chief purposes of the interview
is to determine the probable attitude of the worker toward the or­
ganization. A person is never hired on the day when he first applies
for work, as it is desirable to consider the applicant apart from the
first appearance which he makes.
In order to get at just the requirements necessary for each job,
work is now being done on “ job analyses,” which means a careful
analysis of each particular job in its relation to each particular
worker. This includes, besides the time study of the job, a careful
study of the home conditions, temperament, and age of the worker,
all physical surroundings of the work place, such as air, accessibility
to toilets, rest periods, possibilities of sitting, ventilation, light,
noise, any nervous strain resulting from the nature of the work,
methods of payment, relations of this job to the rest of the organi­



zation, and all other features which may make that job different
from any other job. This job analysis should show just the proper
requirements for the best kind of worker on that particular job, and
enable the employment department to choose that individual who
will suffer least from working in that particular position, as well as
bring the best results in point of production.
The efforts to steady employment by transferring workers from
one department to another as work fluctuates necessitate, in making
a selection of a worker, the consideration of two factors: First, the
adaptability of the worker to the particular job in question; and sec­
ond, the adaptability to the two or three other jobs at which the ap­
plicant may be called upon to work; that is, given two applicants,
one especially well adapted to the particular job for which he is being
considered, the other, though not so well adapted for that particular
job, better fitted for the group of jobs at which he may be required
to work during dull periods, the selection would be made of the
second worker.

It is the purpose of the employment department when hiring a
new worker to tell him something of the general policies and stand­
ards. The candidate is then taken to the factory nurse, who ques­
tions him in regard to his health and who explains some of the special
features of the service department. If the applicant is a girl, she is
introduced to the head of the department in which she is to work.
She is also taken to her work place, introduced to those who will be­
come her fellow workers, given a key to a locker, and told of such
other features as may be desirable for her to know. If the person
hired is a boy or a man, he is taken to the head of the department,
who in turn takes him to his work place and follows a similar pro­
cedure. The first impression made upon the employee is most
important, as at no other time is his mind so open.
The group boss in charge of any group of workers, which in prac­
tice does not number more than 10, is responsible for all instruction
in regard to the work to be taught to the new employee. There are
also written instructions relating to the performance of all tasks.
Responsibility for all other training and education rests with the
employment department. In this field of activity, the aim is to
assist the employee in developing his own abilities and in discovering
latent capacities if they exist, and to make opportunities for their
use in this plant if possible. It sometimes happens that this business
does not furnish the best avenues for future growth, and in these
cases attempts are made by this department to find the right envi­
ronment for the worker elsewhere.
The employment department keeps in touch with the newly
appointed employees by interviewing them at least once a month to



see that they are fitted for their work, to give them such assistance as
they may need, and to find out how they react to the work. A record
is kept of each employee from the time of his employment. Infor­
mation in regard to age, education, marriage, parentage, nationality,
number of dependents, and previous employment is obtained from
the application blank. Dates of increase in pay, transfer, etc,,
together with reasons for the same, are entered as they occur., On
the back of the sheet spaces are provided for entries, once in every
13 weeks, for—
(а) An estimate of the excellence, or the reverse, of the discipline which the worker
has maintained ;
(б) His efficiency as determined by his bonus earnings in departments where a bonus
is paid;
(c) The name of the group boss in consultation with whom the employment manager
has formulated his report;
(d) The total number of hours during that period the individual was employed,
the hours he was out on his own time, and the bonus hours he made;
(e) His total earnings, as shown by the payroll. Space is also provided for items
concerning the worker which may affect his work, such as home conditions, etc.

It is with a view to finding out what the average weekly wage
per year is for each worker that this record-is made, which shall
show quarterly the exact amount of money each one has actually
taken home during that period. It does not so much matter to the
worker what his rate per hour or per week may be. The important
thing to him is the amount he earns over a period of time. A man’s
hourly rate may be high, but if he has short time, his wages are still
small. Unless actual figures covering a definite length of time are
periodically brought to the attention of someone whose business it
is to safeguard the interests of the employee, many maladjustments
of wages escape even a well-intentioned management which believes
wages are high because rates are so.
It is the custom to consider each employee once at least in every
six months to ascertain whether or not he is deserving of an increase
in pay, and if he is, it usually is granted. If he is not deserving of
an increase, he is interviewed and the reasons for withholding the
raise are talked over with him. This increase in pay continues until
the rate equals the union scale.

The authority for final discharge rests with the head of the em­
ployment department. Group bosses or others in authority may
recommend for discharge and if, upon investigation of the case in
hand and presentation of proper data on both sides, it seems desir­
able that the worker be discharged, it devolves upon the employ­
ment manager to perform that duty. Individuals may, if they feel
that the decision is unfair, take the matter to the works manager,



but this privilege has never been used. An employee has the privi­
lege at any time of taking a complaint to the employment depart­
ment or works manager.
Discipline is reduced to a minimum by the system of management
which is self-disciplinary in its operation, but such matters as require
discipline are usually attended to by the employment manager. A
joint committee to consider all grievances brought before it has
worked well. This committee consists of a union representative,
usually the president of the local union, a representative from the
department where the grievance occurs, the works manager, who
represents the firm, and the employment manager, who is a neutral
party on the committee. A great variety of subjects is brought
before this committee, as, for example, such questions as certain
pieceworkers doing a little extra work during the noon hour, rear­
rangement of locker rooms, distribution of work, and similar matters.
Questions of pay which are not concerned with union agreements,
but merely affect a special piece of work, are also brought up for
discussion at these meetings. So far all grievances have been dis­
cussed and settled on a basis of facts and to the mutual satisfaction
of all parties concerned. The great benefit resulting from these
meetings has been the training of the members to look at the various
questions from point of fact rather than from tradition or someone’s
personal opinion. Once facts are established, there is seldom any
argument as to the right action.

Realizing that any group in society advances only as its individual
members advance, the employment department endeavors to know
each worker individually, and this is brought about not only by
direct methods but by other avenues which it has at its command
for getting into close touch with the employees. An important
channel is the library, consisting of several hundred books of nearly
every description. Fiction is most sought for, of course, but there
is a demand for technical books, travels, music, art, etc. Foreigners
are often very glad to be shown what kind of books to read, and it is
possible frequently to give them almost a graded course. Many of
them read philosophy, history, economics, etc., and are grateful for
help in the selection of their books. Others, of course, need a much
simpler line of reading, but follow suggestions readily. Technical
and trade magazines are sent monthly to those likely to be interested
in the special contents.
As a result of observation of the faulty habits of diet prevailing
among those who brought lunches, the project of establishing a lunch
room was discussed with a number of the employees. The idea met
with such hearty cooperation that three years ago a small lunch



room was started. Food is served at cost, and, with the exception
of the cook, service is voluntary, being given by members of the
office force. Practically no one suffering from indigestion now re­
ports to the hospital in the afternoon.
Recreational activities outside of the factory are not now car­
ried on. Norwood has a civic center of exceptional excellence where
gymnasiums, swimming pool, bowling alleys, dance halls, club rooms,
sewing and millinery classes, etc., are open to all by the payment
of a small fee.
The employees, with the cooperation of the management, have
organized two voluntary associations, the Plimpton Savings Bureau
and the Plimpton Mutual Benefit Association. The management of
both associations is controlled entirely by the employees.

The savings bureau was founded with the object of promoting
thrift among the employees, 80 per cent of whom are members.
Annual deposits total usually about $15,000, and the present balance
is $11,000. A depositor is required to pledge a stipulated weekly
amount of from 10 cents up, but he may deposit as much more as he
chooses any week. Withdrawals may be made at any time. Each
department has its own collector and collections are made on the
weekly pay day. Interest on deposits is paid at the rate of 4^ per
cent per annum. Many people save money for their insurance, rent,
other periodic bills, vacations, and Christmas in this way. Depos­
itors may borrow sums not exceeding $100 upon furnishing proper
security. Where workers have fallen victims to loan sharks, install­
ment buying, etc., it has been possible, in many cases, to make
arrangements, by means of weekly deposits in the bank, to pay off
these debts. At the same time the man learns something of thrift
in saving for future needs.
As an example of the kind of work that has been done through
the bank, the following illustration may be of interest. A man who
had been in our employ for a number of years and whose work was
proving more and more unsatisfactory, finally had three assignments
upon his wages come in almost simultaneously. In taking the mat­
ter up with him in an effort to make an arrangement so that he could
obtain releases by paying into our bank a small amount on each one
of these assignments weekly, he finally disclosed the condition of his
home finances. He was very heavily in debt and was endeavoring
to pay on about twenty back bills which covered a term of at least
five years. Much of his money had gone foolishly, some of it for
liquor and other equally unnecessary expenses, and both he and his
wife had reached*a hopeless state of mind. We were able to suggest
many economies to them and to help them make up a budget so that



they saved something weekly in the bank for all monthly expenses,
such as rent, insurance, and something toward all back bills. In a
year’s time, he had paid up two-thirds of his indebtedness and his
work had improved sufficiently so that he had been given two in­
creases owing to his added value to the business. He is now con­
sidered one of the best workers in his department. Although not an
habitual drinker, he had been in the habit of celebrating on holidays.
The instilled interest in his family affairs and expenses in contrast
to his former indifference replaces his need for occasional dissipation.

The Plimpton Mutual Benefit Association was organized six years
ago to provide a sick and death benefit for its members. It is entirely
self-supporting. Each member pays fifty cents monthly and may,
upon presentation of a doctor’s certificate, receive benefits of $7.50
per week for 13 weeks, with a possible additional benefit for 13 weeks
more of $3.50 per week. In case of death, the beneficiaries receive
All employees are insured under the workmen’s compensation act
and each case in which compensation is due is carefully followed up
by the nurse to see that full benefit is received. Compensation for
accident, other than payment of hospital and doctor’s bills, does not
begin until two weeks from the date of injury. Realizing that many
injuries do not require two weeks’ absence and that loss of pay for
the first two weeks is often the hardest part of the burden of accident,
the Plimpton Press pays full wages for these two weeks to its injured
employees when such injuries are not caused by willfulness. The
Press also furnishes at the local hospital a free bed which may be
used by employees and their families.
An agency for insuring with the Massachusetts Savings Bank Life
Insurance is maintained. This is a State organization and furnishes
insurance at a minimum expense.

Four methods of payment operate in this plant:
1. Salaries: These are paid to the office and administrative force.
2. Hourly rates: These are paid to nearly 50 per cent of the entire force.
3. Task and bonus: Task and bonus is paid to about 43 per cent of the force. This
method consists of a flat wage rate which the worker receives in any case. In addition,
a worker is given the opportunity to earn an additional amount by performing
satisfactorily a certain fixed task.
4. Piece rates.

Weekly rates of pay for women in the bindery working on an
hourly or task and bonus basis are from $6 to $9.12 plus task bonus,
which amounts to from $1 to $2. Pieceworkers average about $15



for a full week's work. The weekly rates for women in the composi­
tion department range from $6 to $22. In all departments the range
is from $6 for the younger boys to $23 for journeymen, according to
the operation each performs.

Since 1912, the percentages of the labor turnover have been as
Per cent.

1912.......................................................................................................... 18.6
1913.......................................................................................................... 22
191 4
: .......... is
191 5
191 6

The problems of turnover so far as they affected this establish­
ment had been successfully dealt with until the year 1916. This
year presented entirely new problems and efforts to solve them are
now being undertaken. A large percentage of the increase in turn­
over was among the unskilled workers. Among the new aspects the
following are most prominent:
(a) The abnormally high rates of wages paid to unskilled labor
drew many of this class to the cities and to other plants working on
war contracts. We were unable to equal the rates.
Cb) The unusual demand for labor made a scarcity-of this com­
modity and as our busy season begins much later than those of other
industries in our locality, the best workers had been engaged before
we went into the market. Consequently we were forced to hire a
lower grade of help than in former years and they, in many cases, *
proved undesirable or unstable. There are two possible solutions
to this problem—either to retain a larger working force or to increase
our force at an earlier date.
In accordance with agreements with the unions, they are
given the first opportunity to furnish skilled workmen. This oper­
ates well when the union headquarters are in the same locality,
but when they are in the city, as is the case with the typographical
and pressmen's unions, they furnish unstable force. Workers sent
out to small towns naturally return to the city as soon as the oppor­
tunity presents itself. This problem brings up the question as to
the advisability of training an even greater number of our own em­
Every industry has problems of employment peculiar to itself,
depending in a degree upon the nature of the work, but more espe­
cially upon the character of the personnel of the organization. Here
innumerable variables enter. Policies which are v/elcomed by cer1 Of this 22 per cent was to increase the force and 13 per cent to replace



tain classes of society would quickly offend other classes, but in any
organization success can come only in the measure of the spirit of
cooperation. No class of person likes to be ruled and consequently
a democratic internal organization proves to be the most satisfactory.
On the worker’s side, the fact of his having a voice in government in­
creases his self-respect and makes him more ready to take a sporting
chance on the results. On the side of the management is the possi­
bility of utilizing the vast fund of experience to be found in the ranks
of the workers. Both sides gain the added strength of unity.
T h e T o a s t m a s t e r . It is fortunate that this kind of work is not
confined to any section of the country. We will conclude our pro­
gram with two short papers, and the first one is from St. Louis. Mr.
Clarence H. Howard will give us a talk on “ Fellowship: basis of
true relation of employer and employee.”


The science of this relation is human engineering, for we must have
“ humanics as well as mechanics/7 which means, in plain words,
treating men as men, not as machines. That we may all understand
what is meant when fellowship is mentioned, I will give you the
definition which I have worked out through years of earnest study
and application of its principles to business, which has proven a
practical basis for putting all, from the office boy to the president,
on the same plane. Then as a whole, we can work out together the
problems of the day and in such a way that each one feels that he or
she is a coworker in the great work of rendering service.

Fellowship is a comprehensive vital force, always finding expression
in the practice of the Golden Rule. It broadens our views, increases our
abilities, enriches and purifies character. Its chief foundation stone is
cooperation. By its very nature it is unselfish; therefore it can not
exist alone, but requires all mankind to share it. Fellowship has no ele­
ments of failure, no racial or other prejudices, no hate, envy, jealousy,
or “ who shall be greatest.” Therefore it must aid in ending strife,
strikes, and wars. Fellowship understood and practiced establishes
the brotherhood of man, which is, “ On earth peace, good will toward
men.” Fellowship is the lever which elevates mankind and estab­
lishes home relations which unfold a wealth of affection—a tenderness
not merely talked, but felt and lived. So you can readily see fellow­
ship belongs to no race or nation, but is universal in its adaptation and
bestowals. Its language—an honest heart, cheerful smile, and a
hearty hand grasp.
Believing in and loving our fellow men and being willing and able
to serve with them in the right is the heart of fellowship. Fellowship
always figures how much it can share with the men, not how little
it can give them. In fellowship, authority is a position of trust and
not one of personal power and aggrandisement. Fellowship is not
an “ easy boss,” but a truly just one, being strict in acknowledging
and rewarding merit and in discountenancing apathy, inefficiency,



and carelessness. Organization to be most effective must have a
common objective, one that all the units of the organization see and
understand, and this objective should be so coupled with individual
benefit and group benefit as to furnish the most powerful incentive
toward individual and group effort. This is simply the adoption of
the principle of right as the unerring law of action, and we all acknowl­
edge that the right way gives us the right of way. When causes are
right, effects take care of themselves. High individual efficiency in
the organization brings greatest service to the customer in company
product, and when service is right the customer's confidence is
earned and success is assured. Service must be expressed in safety,
efficiency, and economy, and character building is its highest goal,
which enables one to profit with his fellow man and community but
never at their expense.
How is highest individual efficiency to be obtained ? Efficiency is
expressed through willing, skillful workmen, whom we are all seeking
in order to secure the acme of workmanship. What is skill? Skill
is doing the right thing the first time. We must use wisdom in selec­
tion, through a competent employment department, to get skillful
men, and the fellowship spirit and activities will make any reasonable
man willing.

The most important engineering course to-day is the human engi­
neering, and fellowship is its basis. For if a man knows all there is
to know about business and all other human activities, and has not
fellowship that he may work for and with others harmoniously, how
can he utilize what he knows ? Therefore you get right back to what
the greatest man that ever lived taught—it's the one thing needful—
Human engineering demands our being willing and able to treat
men as men. The welfare of the man is more important than tools
and machinery, for man thinks, and he acts according as he thinks.
It is not what we say about human engineering but what we under­
stand and practice of what we say that brings results. Human
engineering is one of the most important factors in reducing labor
turnover. It teaches that you can not receive anything with a
closed hand; you must open up first. This makes it evident that
“ the hole you make in giving is the hole you must receive through."
People who give little receive little, but the fellow who is willing
to do big, broad, charitable things and has a true sense of service to
his fellow man makes a great big hole in giving and therefore receives
countless blessings. Consequently it is plain that we can not make
or buy our blessings; we can only provide channels through which
they may come to us from the one source of all blessings.




Only about 30 per cent of accidents can be prevented by mechan­
ical safeguarding; the other 70 per cent must come through human,
engineering (fellowship). Our slogan should be “ no accidents,” and
wouldn’t you rather know that every man who comes to work is
going home safe and sound to his little family? Of course you
would. Accidents have no necessary part in the conduct of suc­
cessful business; they are unnecessary inefficiencies. Accidents were
once considered inevitable, but out of the nightmare of the past has
emerged a safe, practical, and orderly condition in industry.
The safety movement is one of the greatest constructive conserva­
tion movements that has ever come among men. The economic
losses in the country through accidents have been almost beyond
belief. There is nothing more useless than an accident. The victim,
his family, his company, and his community are the losers. Safety
work is found to be the scientific study of the right and orderly way
of doing things. Good safety work makes even the humblest work­
man in any plant a safety man. The safety movement has proven
to be one of the great agencies toward a realization of the brotherhood
of man.

Fellowship is efficiency. One of our great efficiency engineers
made the statement that Jesus was the greatest efficiency expert the
world has ever known. I asked him why and he replied, “ Jesus
accomplished more, in less time and with less equipment and mate­
rials than anyone else,” and these are the fundamentals of efficiency.
Efficiency must be equally practiced by employer and employee,
thereby blending together all efforts in one unified purpose of doing
unto others as we would have them do unto us. This will avoid
antagonisms and misunderstandings, and will bring true cooperation,
contentment, and success. Another factor in efficiency and human
engineering is poise, which has been beautifully defined as follows:
“ Poise is that state of consciousness which is at rest and peaceful
when no one praises and undisturbed when opposed, censured, or
misunderstood.” To lose your poise because of any disturbed con­
dition only makes a bad thing worse.
One evidence that Jesus was the greatest efficiency expert is that
he said to you and me, and to all mankind, that we should 11Judge
not from appearances, but judge righteous judgment,” and that we
should be lifted up and draw all men unto us, and “ Let your light so
shine before men that they may see your good works and glorify” —
you? No! But glorify the power which makes it possible for you

R E LA TIO N OF EM PLO YE R AND E M P LO Y E E -----0 . H . H O W A R D .


to be lifted up and to let your light shine. This means that we must
so conduct our business that it will command the respect and cooper­
ation of the five factors in business which must be coordinated,
namely, the employee, the employer, the man from whom you pur­
chase, the customer, and the stockholder. It necessarily follows
that your business will then win the respect and cooperation of the
community. A broad-gauged, public-spirited business man must be
intent, uniform, consistent, and sympathetic. When difficulties and
misunderstandings arise he must be wise, brave, and unselfish, which
will waken a tone of fellowship that shall emphasize humane power
in a community.
The Constitution of the United States does not provide that arbi­
trary human force shall regulate man. Rather does it imply that
righteousness shall permeate our laws. Mankind will be rightly
governed in proportion to the utilization of the Golden Rule in law
and its practice, which will insure the rights of man and hold sacred
the liberty of conscience.
The T o a s t m a s t e r . If there ever was a time when we Americans
ought to be interested in the subject of Americanization it seems to
me it is now. It is one thing to have an idea, it is another thing to
be able to visualize that idea for the man on the street, for the public
at large. Therefore it seems to me we are specially fortunate to-night
in having with us Frances Kellor, of the Americanization committee
of the United States Chamber of Commerce, not only on account of
her knowledge of the subject but also on account of the specially
noteworthy way in which she has visualized this subject to the
American people through her work and writings.
[Miss Kellor read a paper at this time, but as it was impossible to
secure a copy her paper has been omitted.]
The T o a s t m a s t e r . I will call on Mr. Wells for a moment.
Mr. W e l l s . Several associations have been invited to select repre­
sentatives to consider the matter of forming a national society, and
I move that the official representatives of each of the employment
managers’ organizations represented at this conference, as shown on
the official program, meet this evening at conference headquarters
on the second floor of this hotel, immediately following the close of
this session, and consider the desirability of forming a national
affiliation for employment organizations, and if this meeting feels
that such an association is desirable, that it report Tuesday, April 3,
the plan on which such an affiliation shall be formed.
[Motion seconded, question put, and the resolution offered by
Mr. Wells adopted unanimously.]



The following persons were appointed on the committee to report
on the conference:


Boston................................................................................. Ralph G. Wells.
Detroit.................................................................................Boyd Fisher.
Chicago................................................................................C. R. Beard.
San Francisco..................................................................... F. Dohrmann, jr.
New York........................................................................... E. B. Gowin.
Newark................................................................................F. I. Liveright.
Rochester............................................................................L. B. Ermeling.
Cleveland............................................................................ C. Gildersleeve.
Pittsburgh......................................................................... -E. F. Harris.
Philadelphia.......................................................................J. II. Willits.



The C h a i r m a n . Mr. L. B. Ermeling, of the Rochester Employ­
ment Managers’ Association, has consented to read Mr. HubbelTs
paper, which should have been presented last night.
TER , N . Y .
[Read by L . B . Ermeling, Rochester Em ploym ent Managers’ Association.!


The following paper is an elaboration, or, more correctly speaking,
an exposition of an outline submitted to the employment managers’
group of the industrial management council of the Rochester Cham­
ber of Commerce at its meeting on February 20, 1917. The purpose
in trying to cover the whole field in one paper is not to put forth a
set of conclusions which would tend to close specific subjects and
render discussions of them unnecessary, but rather to coordinate
these same subjects so that we can see at a glance their relation
to the whole scheme and rate them in importance accordingly.
It will also serve as a tangible basis for consideration by a plant just
starting or considering the starting of an employment department,
since it suggests in concise and coordinated form what functions
might be covered. The points raised here pertain almost wholly to
activities connected directly with employing. No effort has been
made to take up the subject of welfare or service work because this
subject in itself furnishes material for several separate papers.
With this viewpoint in mind let us take up the organization and
scope of the employment department proper.

Probably the first question in connection with an employment
department is “ To whom should the employment manager be
responsible?” It is now pretty well agreed that he should be di­
rectly responsible to the manager and answerable to him alone. Of
course titles of executives vary in different organizations, but the
point here is, that the employment manager should come directly
103021°— 17—Bull. 227------ 7




under the highest executive immediately responsible for all phases of
manufacture. He may be called the general manager, manager,
factory manager, works manager, general superintendent, or any one
of several other titles. This brings the employment manager coor­
dinate with the production and mechanical superintendents, also the
heads of the inspection, engineering, and any other departments of
similar rank, depending on the type of organization. Although
the employment manager must be primarily an executive, his posi­
tion is largely that of a staff man, and his dealings with the manager
will be, to a great extent, in an advisory capacity on all matters per­
taining to the policies of the company affecting the relations between
employer and employee. Being coordinate with the superintendents
responsible for the conduct of labor coming under their supervision,
he is able to act as a check on the interpretation of the company's
policies as administered to employees by their superiors. This, of
course, places him in the position of judge in the court of appeals, on
questions involving the relations between management and employee.

The mere signing of an order does not establish an employment
department, but the authorization and backing by the management
are absolutely essential. Assuming that these are granted, the
establishing of the department is a slow, gradual process. It re­
quires time and ceaseless diplomacy, energy, perseverance, and
patience on the part of the employment manger in educating and
gaining the confidence of the foremen. The fact that he is organiz­
ing an employment department will prejudice most of the foremen
against him because they feel that he is trying to take some of their
authority away from them. The employment manager must size
up each individual foreman and study his personality to learn the
best way to approach and work with him. It is also very necessary
to make the foremen feel that the employment department is being
established to help them, and to explain thoroughly how it will
accomplish this. He should also listen carefully to any ideas the
foremen may have on employment department work, and wherever
possible should incorporate -their suggestions. Above all else, he
should aim not to antagonize the foremen and should always deal
with them in a frank, straightforward, open manner, giving them
no occasion to feel that anything is being “ slipped over” on them.
When once the foremen realize that he is working for their interests
and is always willing and glad to cooperate with them on any phases
of the work where they are mutually concerned, he will have little
difficulty in getting a fair trial for any plan he may wish to put
across. Another very important part of this missionary work is in
gaining a general working knowledge of all operations and getting



the foremen’s ideas on what types of men they want for them. This
is laying the foundations for standard specifications later on. The
employment manager must be first, last, and all the time a thirtythird degree diplomat. He must put in operation one thing at a
time and be sure that everything else in operation is working out
satisfactorily before starting anything else.

Although the employment department deals primarily with hiring,
its scope should by no means be limited to securing help. In the
more progressive concerns the following up of employees and acting
as a point of contact between the management and employee is just
as important, if not more so. This is shown by the fact that the
title “ supervisor of personnel” is now being widely used instead of
“ employment manager.” At any rate, the function of the employ­
ment department is to—
Build up a list of applicants available.—The extent of this list will
depend upon the conditions of the labor market. Some concerns do
not put on file any applications which can not be used at the time,
while some go to the other extreme and hire only from applications
on the shelf. Under present conditions it can not be assumed that an
application will be good for very long unless the concern has such a
good name that men will leave others to accept positions with it.
However, there is little doubt concerning the advisability of putting
on file applications of desirable workmen who apply at a time when
they can not be placed. This makes it unnecessary to depend
entirely on men applying at the office, because this is a very uncer­
tain quantity, and repeaters at the office do not represent the best
class of workmen, especially on skilled work. The man wanted is
generally not there when needed. Very often the opening will occur
within a short time, and as a general rule part of those sent for will
come in. Applicants can be encouraged to call up occasionally, or
even to advise if they have accepted other positions and whether or
not they still want to be considered as available. Putting applica­
tions on file, provided a reasonable number are sent for, is sure to
have a desirable effect on workmen in the locality, for it shows a
personal interest which is appreciated, because they feel that this
same interest will extend to men in the employ.
This file should include desirable applications selected from—
Those applying at the employment office: These require a
great deal of weeding out, because this class does not represent, in
the majority of cases, the best type of workmen. However, it is
essential to have men applying at the office, and the aim should be
to raise the standard of this class as much as possible by encourag­
ing desirable men to return and tactfully tending to discourage those



not desirable. This class of applicant is indispensable for filling
positions in a hurry. Many good men can be secured on short notice,
because they are most of them out of work when they apply.
Those recommended by employees: This class is probably the
most desirable when once properly placed, because they have friends
in the organization who will introduce them and make them feel more
at home during the first few days, which are the hardest. They will
also have ties which will tend to hold them, once they are hired,
because they will feel under obligation to make good for the sake of
the men who recommended them. In order to carry this out suc­
cessfully, however, it is necessary to make an employee feel at the
time he recommends a man that he is to a large extent assuming the
responsibility of his being a desirable character and capable of making
good. He should be informed if the man does not come up to expec­
tations. An employee should recommend an applicant by talking
the matter over with the employment manager. If it seems advis­
able to interview him, the employee should be given a form to fill
out and sign, vouching for him. This slip when presented by the
applicant will serve as an introduction to the employment manager.
(c) Those obtained by scouting: This class represents largely men
whose names have been obtained in connection with some specific
opening. By scouting is meant any means of still hunt, such as
getting in touch with workmen, other employment managers, schools,
or any other sources which might be able to suggest capable men.
(d) Those obtained by advertising: Advertising is, of course, a
last resort but is nevertheless necessary at times. “ Blind ads”
should be used only when absolutely necessary. Ads over the com­
pany name are much quicker and should be used except where a
responsible position is to be filled or where a replacement is to be
made which should be kept secret and might be “ given away" by
the ad. The custom of running blind ads to test the loyalty of em­
ployees should be discouraged, because it savors strongly of under­
hand methods.
(e) Those obtained by other means: This includes men recom­
mended voluntarily by outside sources, private individuals, public,
fraternal, or other employment agencies charging no fees, schools,
or any organizations capable of supplying the right class of men.
These sources should be encouraged, but at the same time educated
as to the class of men acceptable. As a general rule it is not very
satisfactory to take men from private agencies charging a fee. The
employment manager is laying himself open to the charge of being
in league with private agencies, and although his intentions are of
the best he is often misunderstood. From the applicant's standpoint
he has bought his job and this obviously is undesirable.



Select the best talent available jor positions open.—This immediately
brings np the point of where the power of hiring should be placed.
The old idea is that the foreman has absolute power of hiring. There
is now in successful operation in many plants the other extreme,
viz, the employment manager has the absolute power of hiring and
the foreman can not reject except after giving the new employee a
fair trial. Although the latter may come in time to be the pre­
vailing practice, few employment departments are well enough
established to carry it out satisfactorily now, even if the power were
delegated to them. For a workable scheme, then, let us make a
compromise. Let the employment manager hire, unless for certain
work the foreman expresses on his requisition for help a desire to
see the applicant before he is engaged. This will have a tendency
to shift gradually the responsibility for hiring over onto the shoulders
of the employment manager as he comes to understand more fully
what the foreman wants, and the foreman comes to put more con­
fidence in the selection of the employment manager. The ability
and knowledge to select competently come only after considerable
preliminary work has been gone through. They involve—
(a) Information in advance as to vacancies: This is one of the
worst features of modern conditions. Workmen must be educated
to give sufficient notice of leaving and foremen must notify the
employment department immediately when such notice is given,
thus allowing as much time as possible for securing people to fill
the positions. This education of the workman involves, in addition
to making him realize the fairness of it— (1) a system for paying off
in full, when they leave, those who give sufficient notice; (2) having
an understanding that leaving without notice must be counted
against his record should he ever want a reference from the com­
pany; (3) checking up a previous record of employment to see if he
has quit without notice; and (4) it also involves, on the part of the
employer, giving notice when letting a man out, except in cases of
discharge for insubordination, malicious conduct, and the like.
The case of a conscientious workman not making good will be taken
up under another heading.
(b) A thorough knowledge of what material is available: This
includes, in addition to applications on the shelf, a knowledge of
conditions of the labor market in the locality, and any strikes, lay­
offs, and other conditions affecting it.
(c) A close personal contact with foremen: This has been touched
upon before as part of the missionary work. It is simply getting
around the shop as often as time permits and keeping in touch with
the foremen regarding their wants and what is available.



(d) A general working knowledge of all operations performed:
From personal observation and talks with the foremen a general
knowledge of the work can be acquired.
(e) Standard specifications for all classes of help used: Standard
specifications would be an outgrowth of contact with the foreman
and would involve a knowledge of the operations and the corre­
sponding kinds of help preferred. These should be reduced to writ­
ing and approved by the foreman and employment manager.
( / ) Knowledge of rates and earnings: It is necessary for the
employment manager to have a thorough knowledge of rates paid
for all classes of work done. This -should include day rates and a
general knowledge of average earnings on piecework in the plant
and as much of this information as can be gained pertaining to
other plants in the locality.
(g) Investigation of applicant’s record: Proper cooperation on
the part of employment managers on the matter of references will
enable them to weed out many of the undesirables. It is largely a
matter of the employment department having sufficient data to give
an intelligent and comprehensive record of the man.
(7i) Physical examination of applicants: Many of the larger and
more progressive concerns are now insisting upon a physical exami­
nation of new employees before starting work. In many cases it is
the outcome of rigid accident compensation laws, but from the
purely business standpoint doctors’ examinations are a good propo­
sition. They are so common now that very few applicants object
to them. A comprehensive employment department is not complete
without them.
Character analysis: Opinions of employment men vary as to
the value of scientific selection and character analysis, but there is
without doubt something in the science which would be of value to
most employment men. It is for each to use as much of the science
as*his experience justifies.
(j) Testing out applicant for certain work: Many concerns are
finding it advantageous in some cases to take the applicant to the
department and give him a superficial try out. This is of special
value in the case of operators for special and automatic machines
where a minute or two at the machine will prove whether or not the
applicant is familiar with it. However, this should be discouraged
rather than encouraged.
This will also include taking the applicant into the factory to see
working conditions in certain special cases.
Introduce new employees.—At the present time there is not enough
attention paid to introducing new employees into the organization
properly. If an applicant has been accepted it is worth while to
start at once to make him feel at home. The impressions gained



during the first few days stay with him and a little personal interest
at the start helps him over the critical period. Some one from the
employment office should take him to his department when he starts,
and the introduction should include:
(a) Introduction to foreman and fellow employees: If he is not
already acquainted with the foreman he should be introduced to him
and arrangements should be made for him to be made acquainted
with fellow employees.
(Jb) Explain rules and policies of the company: The most satisfac­
tory way of explaining rules and policies is to give the new man a
brief, concise booklet, and supplement it with a verbal emphasis on
important points. This gives him an opportunity to study them
over at leisure, and not rely on memory to carry all the details.
(c) Explain location and use of hospital: The new employee should
be shown the location of the factory medical department and im­
pressed with the necessity of going at once to the hospital in case of
any injury, no matter how slight.
(d) Point out physical surroundings: General lay out of buildings,
offices, stock and tool rooms* lunch room, exits, etc., should be
pointed out.
e) Point out location of conveniences: This should include wash
room, lockers or coat rooms, and toilets to be used in the department
to which he is assigned.
Follow up 'performance of employees.-^By taking up this function
the employment manager is taking up employment work in the
broader sense. This phase of the work is, nevertheless, important,
because by following up the performance of all employees, especially
new ones, attention is called to “ deadwood,” round pegs in square
holes, and real live material within the organization. It also acts
as a check on the judgment of the man doing the hiring and he
should benefit by the experience. This follow up should cover—
(a) General conduct.
(b) Average earnings.
(c) Lateness and absence.
(d) Health and accidents.
(<e) Efficiency rating or periodic certifications by foreman covering
at least—
1. Workmanship.
2. Reliability.
3. Willingness.
4. Attitude.
5. Industry.
Bender final decision on differences.—The employment manager
should render final decision, subject only to the manager, on all
differences between employees and superior where a satisfactory



agreement can not be reached by those concerned. In this connec­
tion, however, an effort must be made to discourage workmen bring­
ing their troubles to the employment department before they have
taken the matter up with their foremen. This can be accomplished
by sending them back to talk it over with the foreman or immediate
superior first, then if a satisfactory agreement can not be reached, it
will logically come back to the employment department to be
straightened out. This would cover—
(a) Dissatisfaction with rates.
1. Daywork rates.
2. Piecework rates.
(b) Dissatisfaction with working conditions.
(c) Alleged unfairness of any kind.
Render final decision on recommendation for discharge.—The em­
ployment manager should render final decision, subject to the man­
ager, on all cases of discharge. Unconditional discharge should be a
serious matter and should be used only as a last resort. It should
reflect on the foreman as well as the man. At the present time dis­
charge is treated too lightly, and the authority given the foreman is
many times abused. For this reason all cases should be subject to
review by the employment manager who can, by getting both sides
of the story, together with his records, render an unbiased decision.
A foreman should have the privilege of saying that a man can not
work in his department, but it should not be for a foreman to say
that a man can not work in the plant at all. This should rest with
someone whose responsibility covers the entire plant. Some plants
have gone so far as to give the employment manager the power to
force a foreman to take back a workman, provided conditions indi­
cate that the foreman is in the wrong. However, there is nothing to
be gained by sending back to a foreman a man he does not want.
He can easily make life so miserable for the man that he will be glad
to quit. A foreman should have the privilege of returning to the
employment department any man whom he does not want in his de­
partment, but it should be up to the employment manager to say
whether the man deserves unconditional discharge from the employ
of the company or whether he should be given a chance in another
department. In order not to weaken the discipline in the depart­
ment, great care must be exercised by the employment manager in
handling such cases. It is advisable to get the foreman's signature
to a statement as to whether or not he would be satisfied to have the
man transferred to another department. A negative answer to this
question should be substantiated by very sufficient reasons before it
is accepted by the employment department and the man discharged
from the employ of the company entirely. It must be constantly
borne in mind, however, that in most cases the foreman must be



backed up, but the fact that his action is subject to the approval
of the employment manager will make him consider carefully be­
fore he recommends discharging a man. This also involves con­
siderable education of the foremen, and they should be instructed
to talk over with the employment manager all cases of recommended
discharge before taking definite action. With a broad-minded, un­
biased employment manager this plan will strengthen rather than
weaken discipline, because it assures every one a square deal. It
protects an employee when he is in the right and makes his punish­
ment more severe when he is in the wrong.
Investigate reasons for leaving.—Too much emphasis can not be put
on this point. The periodic chart of reasons for leaving is the index
to the whole subject of turnover. Success or failure in coping with the
problem depends upon reading accurately and interpreting properly
what is shown there. The employment manager personally should
see every man before his name is taken off the pay roll, and in most
cases a frank, truthful statement can be obtained as to the real rea­
son, which should be made a matter of confidential record. This
material will serve as a basis upon which to work. The reasons should
be thoroughly and accurately analyzed in order to locate the trouble.
When once it is located, it should, together with complete recommend­
ations for a solution, be referred to the proper authority and persist­
ently followed up until some action is taken. The problem of turn­
over, like any other problem in business, must be solved by thorough
scientific methods, and the employment department is the place from
which the work should be directed.
Arrange for transfer o f men not making good*—Opinions differ as to
the extent to which this should be carried out, but it is unfortunately
true that a conscientious man is not always placed at first on work
for which he is properly fitted. This may be due to error in judgment
on the part of the man who hires him, or he may consciously or un­
consciously misrepresent himself. But the fact remains that every
organization has far too many round pegs in square holes. Misplaced
workmen whose record otherwise shows them to be desirable should
be given as many chances as possible without placing an extra burden
on the organization. After an employee has been working a short
time, his adaptabilities are more evident and he can then be placed
with more accuracy than before,, In general, a foreman is suspicious
of a man who he feels is being “ wished on him” because the man is
not making goodo But this, again, is a matter of education. It may
not be long before the foreman has just such a man himself whom he
would like to see placed. A few cases where misfits have been ad­
vantageously adjusted will soon convert the foreman to the principle
of “ live and let live.”



Bender final decision subject only to the manager, on (a) change of
rate; (Jb) transfer; (c) promotion. A thorough check on change of
rate, transfer, and promotion involves a careful scrutiny of the
record of the employee concerned. The employment manager, with
the complete record of the employee before him, is obviously best
equipped to exercise this function. He is not only familiar with shop
conditions involving rates, openings, and available material, but is also
in touch with these same factors as they concern the outside. It is of
course essential that any one of these three changes have the written ap­
proval of the foreman, general foreman, and superintendent concerned
before being effective, in order to keep them informed as to what is
going on in their departments. This, however, does not constitute
a check on the employee's record, because they do not have as com­
plete information available as the employment department. Neither
do they have the first-hand information regarding the labor market.
In order to get best results a foreman should go over with the
employment manager the cases of change of rate, transfer, or pro­
motion before starting the slips. This will enable him to take into
consideration the information on file in the employment department
regarding the workman in question.
Study earnings of workers.—The necessity of becoming familar
with rates has been taken up before. Earnings, both day rate and
piecework averages, should be carefully analyzed and this informa­
tion, together with turnover figures, will show where it is necessary
to make adjustments. Unasked-for increases to dayworkers should be
arranged through the foreman, instead of waiting until the employee
becomes dissatisfied and asks for a u raise." The foreman is so busy
with production problems that he can not be expected to follow up
such matters systematically. By working through the foreman in
recommending wage increases the employment manager is helping
him rather than interfering. The best way of accomplishing this is
for the employment manager to go over with the foreman at stated
periods of three or six months the rates of all men under him and
follow with rate increases which seem justifiable. Average earn­
ings of pieceworkers, together with turnover figures, will show where
rates are too low or too high, and these also can be taken up with
the foreman and proper adjustments recommended to the ratesetting department. Systematic following up of earnings, and grant­
ing of unasked-for adjustments will materially reduce turnover.
Prepare chart of understudies for all 'positions of responsibility.—It
should be the aim of every concern to have within its organization
men in training for all executive positions so that any vacancy could
be filled by promotion. This involves a chart of the organization
which shows the position, its responsibility, the man holding the
position, and the man who could be put into the position should it



be left vacant. This will enable the concern to hold within its
organization a better class of executives because they will know
that they are in line for promotion as openings occur. The organ­
ization will also benefit because there is a decided advantage in
having men who have proven themselves capable, and who are
familar with the plant and also fairly familar with the duties of the
position. This enables them to take up the work and carry it on
without interruption.
The “ three-position plan” of promotion as outlined by F. B. and
L. M. Gilbreth, makes each employee in any plant a member of
three groups. He belongs to the group next higher up as a learner,
and part of his time is spent in preparation for that group. He
belongs to the group below as a teacher, and part of his time is
devoted to instructing some one in this lower group to take his place.
How long a man stays in this working group depends upon how soon
he can train a man below him to take his position and receive train­
ing himself for a position in the next higher group.
Keep adequate records.—Records are the foundation upon which the
employment department is built; naturally the foundation should be
as strong as possible. Additional files and records do not neces­
sarily mean more strength for the system. Files should be reduced
to the smallest number which will furnish an adequate check. All
information relating to the individual employee should be concen­
trated in one place, thus making his complete record available at a
glance. Filing systems should be as simple as possible, thus reducing
chances of misfiling. It is also essential that all filing be kept up to
date so the latest information is always available. It is important
that such records be kept confidential, access being given only to
superiors of the man in question. They should never be allowed out
of the employment department. Copies might be made in certain
special cases. The following are suggested as sufficient files to afford
adequate information for reports and for individual records:
(<a) Applications on file: The method of filing depends upon the
kind of forms used. Applications should be so filed as to be readily
accessible by name of applicant and by class of work for which he is
(&) Complete record of individual employees: As these records are
generally referred to by name they should be arranged alphabetically.
This would include:
L Information obtained at time of hiring: This, of course,
covers application card, any references secured, note of
introduction, if any, slip from doctor showing medical
rating, any correspondence relative to his application, and
previous record in case of men rehired.



II. Record of change of rate, transfer, and promotion: This
should cover not only a notation of the change, but a rec­
ord of any reasons or other circumstances connected
with it.
III. Summary of pay-roll records for individuals: This will cover
a summary, by stated periods, of average earnings of
pieceworkers, bonuses, and late and absence reports. If
the pay-roll department can not compile this data in such
form as to render it available, the employment depart­
ment should arrange to get the information and compile
it for its own use.
IV. Summary of other follow-up records: This includes efficien­
cy record or periodic certification by the foreman; pe­
riodic summary of accidents, sickness, and hospital serv­
ice; any awards for suggestions; conduct worthy of special
note either in his favor or otherwise; or any information
of value concerning the individual which has been called
to the attention of the employment department.
(c) Record of exemployees: This also should be alphabetically ar­
ranged and consist of the record above mentioned, together with all
information gathered at the time of his leaving.
(<d) Numerical file of employees: It is necessary to have a cross
index to the alphabetical file for the purpose of assigning badge or
identification-check numbers. This need contain nothing more than
the man’s name, department, and number.
Daily blotter of men hired and transferred: This should be a
pencil memorandum giving the name, department, number, and rate
of all men hired and transferred. This information is necessary for
compiling reports at the end of the month, because when the records
are once filed it requires considerable time to sort them out again
according to dates.
(/) Daily blotter of men removed from pay roll: This should include
the name, department, number, date hired, date removed, and a
brief statement of the reason. This again is for convenience in com­
piling reports.
Compile periodic reports showing turnover.—The value of reports on
turnover is not questioned now. The object should be to gather only
information which is of value and present it in simple, concise form.
It must be remembered, however, that the compiling of reports, in
itself, is a waste of time unless something is done with them. They
are merely an aid in the solution of turnover problems. They must
be properly interpreted and recommendations made and followed
through. The following are suggested as being of value. In most
cases it will be advantageous to combine two or more of them in one



(а) Number hired, by departments.
(б) Number discharged, laid off, and resigned, by departments,
compared to corresponding number on pay roll.
Number discharged, laid off, and resigned, by departments and
(<d) Number discharged, laid off, and resigned, by departments and
length of service.
(ie) Number discharged, laid off, and resigned, by classes of work.
Supervise proper instruction of new employees.—The proper instruc­
tion of new employees is of vital importance from the standpoint of
turnover. There are few organizations which are not lame on this
particular point. Some, on the other hand, have gone so far as to
establish instruction departments independent of the manufacturing
organization. This may be a little radical for some of us now, but
the employment department when it turns over a new man to the
manufacturing department should make arrangements for adequate
instruction. Further than this, in following up the new employee’s
performance until he is broken in, the employment department should
insist upon his getting proper instruction and make such recommenda­
tions as seem pertinent, with a view to improving the methods used.
This also involves some arrangement with the rate-setting depart­
ment for a satisfactory wage for beginners.
Investigate cases of absentees.—This may border upon welfare or
service work, but it is nevertheless a part of the legitimate employ­
ment department function. The shop clerk or time department
should furnish the employment department each morning with a
list of all absentees, giving the reason for the absence if any is known.
It should be left to the judgment of the employment manager in each
case to decide how long they should wait before sending some one to
look into the case. If properly handled, workmen will appreciate
rather than resent having some one call at their homes. A written
report should be made of the visit. These cases naturally fall into
three classes:
(a) Out on account of sickness: In case notice has been sent in
that an employee is sick it is desirable to have some one call within
a few days to see how he is getting along. Very often there is
something that can be done to help.
(b) Out on account of injury: In cases of injury where employees
are not able to report at the factory hospital for treatment, it is of
course necessary to have the factory doctor call, but in addition
someone from the employment department should stop in occasion­
ally. ■ A little personal interest in injured employees is a good invest­
ment. Misunderstandings regarding accident compensation can be
straightened out and in many cases the company can be of assistance
in other ways.

1 10


Out for unknown reasons: Investigation of cases of employees
out without sending in any reason will very often find them sick,
and occasionally injured, and in many cases dissatisfied with their
work. There is a question of how far to go in the latter case, but
generally it is advisable to have the man come in and talk the matter
over with his foreman. In many cases a misunderstanding can be
adjusted and a good employee saved. However, care must be exer­
cised not to let an employee feel that the company is running after
him, because he may feel that he is indispensable. Even if the man
is not brought back to work, his real reasons for leaving are obtained.
This alone makes the visit worth while.
Aim to give the plant a good name.—In order to obtain the most
desirable employees, it is necessary to establish among workmen a
good name for the plant. One “ knocker” can do endless harm in
this connection. There are three ways of accomplishing this which
are worthy of note:
Prompt and courteous treatment of applicants: Have an
adequate and comfortable waiting room, but handle applicants as
quickly and smoothly as possible, because they soon tire of waiting
and others coming in will not stay if there is a crowd waiting and it
is being handled slowly. It is also essential to treat courteously
every one applying, even if it is necessary to turn him down, because
the impression he takes away with him may have considerable
influence among workmen.
(ib) Just and courteous treatment of employees: Although this
reputation must be founded on more than the employment depart­
ment’s treatment of employees, that department is in a position to
follow up any dissatisfaction on the part of employees and insure
their getting a square deal.
Fair and courteous treatment of workmen leaving employ:
The men who have worked for a concern play a large part in molding
the general opinion of workmen toward it. It is therefore essential
for the employment manager to see each workman leaving and make
his last impression of the company as agreeable as possible. There
is in almost every instance a way of “ firing” a man without having
him go away a “ knocker.” The same applies to men leaving be­
cause they are dissatisfied. If the company’s viewpoint is properly
explained they can grasp it in most cases, and realize that the fault
is at least partly their own.
This paper is not held up as a ready-made plan for an employment
department, applicable in toto to all plants. It is, rather, a survey
of what is coming to be recognized as the best in modern employmentdepartment practice. An effort has been made to make the paper
comprehensive, but it is by no means exhaustive. Each one, viewing


I ll

it from tne standpoint of the plant he represents, can undoubtedly
see modifications, additions, and omissions which will make the
scheme stronger in its application to his particular organization.
We hope that there may be found in this outline some points of
value to those concerns which have not as yet a fully developed
employment department.
The C h a i r m a n . When the local committee learned that Mr. Roger
W. Babson was to be here the committee was very glad to make a
slight alteration in the program this morning, so as to give him a
few minutes. It gives me great pleasure to call on Mr. Babson.
R o g e r W. B a b s o n , statistician; president, Babson’s Statistical
Organization. Let me first congratulate you all on what this asso­
ciation is doing. I feel that, as Mr. Filene said at dinner last night,
the country which enjoys the best relations between labor and cap­
ital will be the country that will lead after this war is over.
The trip I am just returning from, of some ten or twelve thousand
miles, convinces me that is so. Not only that, but the concern which
best solves that problem will lead in that country. I for one wish
to acknowledge my indebtedness to the chairman in bringing that
point to my attention some years ago. I think he was one of the
first to impress it upon me.
The fact which I wish to bring out this morning is that I hear too
little about ambition, enterprise, and imagination among the employ­
ment managers with whom I talk. Now, if statistics show anything
it is that ambition, initiative, enterprise, and imagination are the
things that really make money for concerns, make money for indi­
viduals, and make industry itself grow.
The other mechanical things we talk about are of very little account.
Capital amounts to nothing of itself; labor amounts to nothing of itself;
and it seems to me we are all fooling one another in talking so much
about those two material things. The things that really count are
ambition, imagination, enterprise, and the other intangibles. When
capital has these things, it makes money. When the workingman
has these intangibles he automatically becomes a capitalist.
Hence I am much interested in some experiments to help you em­
ployment managers discover the men in your concerns who have
those qualities and to develop them in all the othersr Can it be
done ? I say that it can and that it is being done.
The success of every organization depends not on the thousands of
employees but on half a dozen men with imagination, enterprise, and
originality. In studying failures, we find that a great percentage of
the failures are due to the fact that the half dozen men who make up
the management have not been kept “ bred up.” As long as the



management lias been kept “ bred up," then the business is successful,
but when it has not been, then the business fails.
I started, three years ago, to experiment in ways of picking out
from our own organization those few who had these qualities of en­
terprise and ambition. We tried various ways. We finally hit upon
a plan. At the present time it is being experimented with by 12
manufacturing concerns in New England. It consists in the placing
of stories in the pay envelopes of the employees, sturies which have
a certain reaction and which result in bringing the hopeful employees
to the attention of the management.
We have experimented with a great number of stories and with a
number of kinds of stories. The stories which are most successful,
95 per cent of you would cast aside as absolutely no good. We, how­
ever, have gone into it scientifically by visiting moving-picture shows
and by watching what the working people read on the street cars.
We find that the stories which appeal to them do not appeal to you;
and that the stories which appeal to you do not appeal to them. On
the other hand, we find that nothing appeals to them like a story.
Now, I want you folks to think this thing over. I want some more
concerns to join these 12 in experimenting along these lines. The
idea is to pick out a story as you would a phonograph record, to
bring out some particular trait. For instance, say you want to find
some one among your 200 employees to develop as a salesman. Now,
instead of going at that blindly, instead of thinking you know who
is the best man, put, some week, a certain salesman story in all your
pay envelopes and see who, among your 200 employees, comes to
you as a reaction of that story. Perhaps the man who comes will
not be the man you want; but it will be a surprise to you to see who
comes. Some one is coming back as the result of that story whom
you have not dreamed is interested in becoming a salesman. Other
stories can be used for other purposes—why we even have eliminated
gossip from a mill by the use of a story.
I beg of you not to try to solve these employment problems along
mere statistical and mechanical lines. I tell you I was relieved last
night to see how statistics are being handled by statisticians in
Philadelphia. Now, those are the kind of statisticians that the em­
ployees need; it is not the cold-blooded, thin, icy fellows who can do
nothing but run an adding machine.
Remember, it is ambition, initiative, originality, imagination that
are going to keep your concern going. Neither card records nor any
other mechanical thing will put life into your business. It is not
going to be money, it is not going to be manual labor, but it is going
to be those few intangibles which will make your concern lead.
Hence the great job of the employment manager to-day is to pick
out the men who have those intangibles.



The C h a i r m a n . Mr. Boyd Fisher, in his paper, alluded to certain
methods and performances which call themselves character analysis,
psychology, and selecting employees scientifically. There is abso­
lutely no subject in which an employment executive must use his
safety device to such an extent—I mean the safety device called
common sense—there is no subject on which that safety device
must be so constantly worked as that dealing with the so-called
science of human nature. No employment manager is fit to hold
his job who does not, at this late date, at least know the difference
between phrenology and psychology, between science and its opposite,
between observation and opinion, between judging men and fortune
telling. Our next speaker is Prof. Walter Dill Scott, who has been
loaned by the Northwestern University to the Carnegie Institute of
Technology for the purpose of working out tests, and testing tests,
in the field of management.
103021°—IT—Bull. 227------ 8



The Department of Applied, Psychology of the Carnegie Institute of
Technology is not interested primarily in developing tests but its
interest is in the broader problems of vocational guidance and of
vocational selection. The vocational-guidance work is under the
supervision of Messrs. Bingham, Miner, and Thurstone, Dr. Kate
Gordon, and Miss Free. Tests are being developed and applied, as one
of the devices in assisting students to select their life work. Beginning
with next semester, the staff will be increased and every entering
student will be subjected to vocational tests before being permitted
to enter the different schools for instruction.
The bureau of salesmanship research is a subdivision of the Depart­
ment of Applied Psychology but is a part that has nothing to do with
vocational guidance, although it is interested in vocational selection
in the very restricted field of the selection of salesmen.
In our general survey of the different methods or devices actually
employed in vocational selection, we found very great diversities in
practice. All the following have been or are being used by business
men: Astrology, augury, chance as manifested in drawing of straws,
casting of lots or the flipping of a coin, chirography, chiromancy,
clairvoyance, Dr. Katherine Blackford’s system of character analysis,
divination, fortune telling, graft, horoscope, intuition, magic, mind
reading, necromancy, nepotism, omens, occultism, palmistry, phrenology, soothsaying, sorcery, sortilege, subconscious hunches, talisman,
and telepathy. It may be difficult to prove the inadequacy of any
of these systems but there seems to be no evidence of their value.
There is another group of factors which seem to possess great
potential but little actual value. To this group belong inheritance,
or ancestry, and physiognomy. Historically speaking, inheritance has
been the greatest factor in both vocational guidance and vocational
selection. It is not alone in India that the son is selected for the
occupation of his father. We all make some use of physiognomy even
though we are unable to state the way we do it. All attempts to
classify our knowledge of physiognomy or reduce it to a scientific
basis have resulted in miserable failure when applied to vocational
guidance or vocational selection. The bureau has given considera­
tion to these two factors but so far has been unable to discover any
practical method whereby the sales manager may make use of either



inheritance or physiognomy in selecting applicants for selling posi­
In our more detailed survey of the 30 cooperating firms of the bureau,
we found that, in selecting their salesmen, they all depend on one or
more of these three factors: The previous experience of the applicant;
human judgment concerning applicant; and special tests administered
to the applicant.
No system of vocational guidance and vocational selection can be
thought of as adequate unless it gives full significance to the previous
record of the individual. The child that prefers manual training to
more literary work is advised to enter industry. The youth who
excels in physics and mathematics is advised to become a mechanical
engineer. The one who delights in commerical geography, economics,
and psychology is urged to become a traveling salesman. The suc­
cessful traveling salesman is advised to become a sales manager. We
have faith in such advice for vocational guidance, but in the main
our faith is based on nothing more substantial than a fond hope. For
vocational selection, however, the previous record is a source of
dependable knowledge. The college that is in a position to select
among applicants for its freshman class knows that, other things being
equal, those who ranked among the upper fourth of the students in
the preparatory schools will make a better standing in college than
those who ranked in the lower fourth in the preparatory school. The
medical school knows that the best results can be secured from those
who in their preparatory and college classes stood high in scholarship,,
Likewise business houses have found that those who stood high in
school succeed better in business on the average than those who
stood low.
In general, it seems to be pretty well established that any em­
ployer will do well to select from the upper rather than from the
lower quarter of any class, and to select from those who continued
to pursue the more advanced study rather than from those who
dropped out of school at a lower grade. Within a business organiza­
tion those who have succeeded in minor positions thereby indicate
their fitness as beginners in more responsible positions. Classes in
school and positions in business are not only places of training, .but
they are also places of testing as to fitness for other positions. A
crying need in every employment department to-day is more adequate
data concerning the degree of success attained by the applicants,
both in school days and in all positions filled since school days.
When the employment department becomes, as it should, the pivotal
department in our commercial and industrial organizations, every
position will be looked upon not merely as a productive unit, but also
as a place for training and for testing fitness for more responsible

1 16


The bureau has been attempting to make the most of previous
experience in vocational selection by standardizing application
blanks and letters to former employers, and also by systematizing the
rotation within the organization—the line of promotion within the
organization—so that success in any position is not only the best
training, but also the best possible evidence of fitness for the next
higher position.
The second factor in general use by commercial firms in selecting
salesmen is human judgment concerning the applicant. This may be
the judgment of the youth himself (supplemented by that of a friend)
or that of the employer. In order that the judgment of the youth
may have value he must have some knowledge of his own strength
and weakness; in addition to that he must have a knowledge of the
requirements, the hardships, and the rewards of the one or the many
positions under consideration. In these particulars the youth may
be assumed to have some knowledge, but unfortunately his ignorance
exceeds his knowledge. In the future we shall doubtless do more to
help the youth in his self-analysis, and we shall provide him with
more adequate data under the general name of “ job analysis.” For
the present, the greatest weight in vocational selection must be given
to the judgment of the employer or of his representative. This
judgment is ordinarily formed at the time of what is spoken of as
the interview. Strange as it may seem, no standard practice has
been evolved for conducting the interview in such fundamental
features as the length of time devoted to an interview, the method of
conducting it, the points to be looked for in the application, the
standard scale for weighing the applicant, and the method of recording
the interview. From work that has been accomplished during the
present year, it seems perfectly certain that a study of these factors
in an interview will result in a reduction of 50 per cent of the time the
employer spends in interviewing and will increase the value of his
results 100 per cent.
These two factors, previous experience and human judgment, are
and possibly always will be, the most important factors in both
vocational guidance and vocational selection. However, many of us
who have been studying and experimenting with employment prob­
lems have become convinced that these two factors are too expensive
and too uncertain to meet the demands of the twentieth century
business world. We need some additional, inexpensive, simple,
accurate method of estimating the fitness of each of the applicants for
the many positions into which modern business is subdivided.
One method proposed which meets these conditions and which is
being used by firms is that of special tests. The first special test
devised and employed according to scientific principles for selecting
the fit from the unfit among applicants is that devised by Prof.


1 17

Seashore, of the University of Iowa, in selecting applicants not for
business positions, but for entrance on a musical career. During the
last few years many of us have been trying to accomplish for par­
ticular vocations that which Prof. Seashore accomplished for music.
The bureau of salesmanship research is experimenting with such
tests for selecting salesmen. Any description of these tests and the
principles on which they are based is of course out of place at this
time. From my experience in devising and applying tests, I am
convinced that special tests are to be an important part of every
successful attempt to deal with the employee problem in business.
The bureau of salesmanship research has been working with
methods of evaluating tests, and feels justified in presenting four
such methods for checking the accuracy of special tests used in select­
ing the most capable from among a group of applicants for a selling
position. The first of these checks is what we have named the “ firm
rank.” It may be illustrated as follows: If the task is to select
salesmen for a particular commodity working under special condi­
tions, the sales manager can readily try out the tests in advance by
the following method. Let him select from his present force 10 suc­
cessful salesmen, 10 who are moderately successful, and 10 who have
been thoroughly tried but have not been successful under the condi­
tions for which new men are sought. Let him arrange these 30 in
rank order, from best to poorest. Let his rank order then be com­
bined with the rankings made independently by two or more execu­
tives of the firm who are acquainted with the salesmen and their work.
This combined ranking may be called the firm rank, and should agree
closely with the rankings of the 30 salesmen secured from the test, if
the tests are dependable. In actual practice a correlation is fre­
quently secured in excess of 0.75.
The second check of the tests is called by us the “ ringer check.”
It consists in having experienced men tested with the applicants.
If a man has already proved himself successful in a given position
and then is tested with the applicants for the position, he should make
a good showing if the tests are adequate. Correspondingly, the man
who has been thoroughly tried in the position and has failed should
not be able to make a good showing if he takes the tests with the
applicants. Men of known ability appearing with applicants are
called “ ringers” and are useful in checking both the adequacy of the
tests and of the method of giving the tests.
The third check on tests is called the “ vocational accomplishment
check” and is the most dependable of all. But it is not available
until after the applicants have been put to work and their accom­
plishment watched for months or even years. It consists in com­
paring the ratings received in the tests with the later accomplish­
ments in the vocation. No man engaged in vocational selection

1 18


should rest content in giving any tests that are not constantly being
checked up by this most exacting of all checks.
There is a fourth method of checking tests for vocational selection.
For the lack of a better name, it may be designated the “ applicants-experts check.” A concrete illustration will make this method
clear: About 230 applicants had been recommended for appointment
to a selling position by the officials of a large company. (For a period
of years about 85 per cent of all applicants recommended for appoint­
ment fail, resign, or are discharged.) It is only fair to assume that
these 230 men are a typical group, that 85 per cent of them, if ap­
pointed, would fail. Before appointment the men were all subjected
to a series of tests. In the territories where these 230 applicants were
being tested about 20 managers were induced to take the tests with
the applicants. These 20 managers had all succeeded in the task for
which the applicants were being tested. The term “ applicants” as
used here refers primarily to those who will later fail and the term
“ experts” refers to those who have, at least in a moderate degree,
succeeded. The accomplishment of the two groups in the tests is
indicated in charts. In all the charts the figures on the base line
indicate the score received in the test. The numbers in the vertical
column to the left indicate the percentage of the group securing that
particular grade or worse. Thus 30 per cent of the applicants re­
ceived in Test I a grade of 51 or less. Thirty per cent of the experts
received a grade of 68 or less.
Each of the tests separated the groups fairly well with the single
exception of the word-building test. Test II is too difficult for
either group, but still it differentiates the groups. Tests I, III, and
IV are very satisfactory in differentiating the groups.
Test I is a test on general native ability. Test II is an unpub­
lished test for foresight or for imagination of the constructive type.
Test III is a test of system and speed. Test IV is a measure of one’s
ability to see what is wrong in a more or less complex situation and
to make it right. The word-building test is the measure of rapidity
of a low type of thought.
We feel safe in recommending the continuance of the use of any
test that has been found satisfactory by each of these four checks.
No matter how clever a test may appear, what theory underlies it, or
who recommends it, we have no confidence in any test for vocational
selection until it has been checked up by some such practical means
as the four just described.
I recommend for immediate use the firm rank, employment of
ringers, the preparation of the data for securing the accomplishment
tests, and the applicants-experts test wherever you can check up the
experts on the one side and the balance on the other. If this group
of employment managers is really to become professional, I think it



must be because you do what the other professions do, you utilize
all that science has available for you at this time. If you are advo­
cating any insurance scheme do not get it up yourself, and do not
advocate a scheme that is condemned by all the actuaries. If you
have a scheme for promoting health, question it seriously if it is con­
demned by all the doctors you know. If you have a scheme of
dividing off rooms and space that is condemned by all the archi­
tects that you know, assume for once that you are mistaken. If
you have a scheme for selecting employees that is condemned by
every psychologist you know, you should realize that you are acting
I believe the welfare of this organization is pretty closely connected
with the utilization of the results of modern science in your work.
In all the sciences I have mentioned we have a perfectly responsible
group of men at work, and if we ask the entire group a question on
their specialty and they tell you “ This thing has been condemned
long ago by us," you are not professional, you are not keeping an open
mind, by going against the opinion of the experts.
I believe that this will be a professional group, and I believe it will
be so largely because you utilize the findings of modern science and
apply to your work critical tests of the kind I have just been describing.
The C h a i r m a n . T o get an illustration of the scientific method of
selecting help we may go to that used by Mr. H. L. Gardner, of
Cheney Bros., of South Manchester, Conn.


I am asked to speak on “ The selection problem of Cheney Bros.”
Use of the word “ selection” would imply the existence of a supply
from which to select. I am frank to admit that “ elimination” would
better describe our policy of the past year or more— that is, we have
by a process of elimination turned away only those whom our con­
science would not allow us to employ. I have been issued strict
orders by the committee to confine myself to a statement of actual
procedure at our plant; to talk interestingly of our employment
methods to a body of experts is a difficult task, but with your indul­
gence I shall try to follow orders.
A few words of explanation for the benefit of those who may not
be acquainted with South Manchester, Conn., and with Cheney Bvos.
We are situated in a live town of 19,000, with excellent schools,
churches, amusements, and opportunities for recreation. We are,
however, isolated from other textile centers and dependent largely
upon “ family help” in getting out our product. We are the oldest
and largest silk manufacturing concern in the world, employ approxi­
mately 5,000 people, and carry the process from the imported raw
material to the finished goods under our own roofs. In addition to
strictly textile work, we have our own machine shop, electrical depart­
ment, carpenter, paper-box, and paint shops, millwrights, tinners,
and plumbers, pattern shop, private railroad line, and yard labor.
Incidentally we handle the manufacture, installation, and mainte­
nance of the town gas and electric light. It is, then, easy to realize
that we are hiring for a total of several hundred different operations,
the requirements of which are varied and more or less specific.
We might any of us be excused if we should casually consider
“ selection” a comprehensive topic or an independent operation of
employment work. Upon careful thought, I know you will all
agree with me that the subject of “ selection” can not be touched
upon without disclosing its intimate relationship to other phases of
the work, such as source of supply, promotion and transfer, job
analysis, etc.
“ Birds of a feather” is a pretty true adage, and I certainly believe
the existing working force of any plant is usually the source of the
best applicants for work. If consistent personnel work has devel­
oped an esprit de corps, a “ good name,” for your plant, you may
count on obtaining, among friends and relations of your desirable
employees, the best type of new material for your factory.



Success in this method necessitates the creation, in the minds of
your employees, of the proper feeling of responsibility toward work
and employer.
Such recruiting of applicants by your working force must be shown
due appreciation, cold cash being perhaps the most tangible form
such appreciation can take; results, while limited, are usually com­
paratively excellent as to quality and continuity of service.
We have in South Manchester an excellent trade school, with day
and evening courses. Cheney Bros, are under contract to take textile
graduates at a high starting wage and all encouragement is shown to
those of our employees who are seeking to broaden the scope of their
wage-earning ability by attending the evening classes. In almost
every case we have promoted the workmen who strive to fit them­
selves for higher grade jobs. The less interesting sources of supply
such as advertising and scouting are, of course, common to us all
and need no comment.
We are trying to carry to its fullest possible realization the policy
of transfer and promotion from within. Application files, tests,
and a cross index by operation of all our employees capable of mores
than one type of work, help us to eliminate the tendency to “ go
outside” in filling the better openings.
Possibly I.have appeared to be aiming somewhat wide of my
mark “ selection.” Our situation in South Manchester might be
likened to that of a man picking apples from a tree; his skill may en­
able him to select the best on the tree, but after all is said and done,
he is absolutely dependent upon the quality of apples grown on that
particular tree. The real work ahead of us lies as much in the improvement of basic conditions affecting the quality of our supply
as in the actual selection of individuals from that supply.
A few generalities on the employment policy of Cheney Bros.
The entire work is handled in the employment department; foremen
are not allowed to hire under any conditions, but may refer to the
employment bureau any applicants they desire in their department.
Applicants are not allowed in the mills or at the various department
entrances, but must come to the bureau to be interviewed. We are
notified of vacancies through use of “ requisition for help” sheets
made out by foremen and O. K .’d by superintendents. We are
making some study of “ job analysis. ” I believe that written speci­
fications are of great value in hiring for highly skilled tasks, or where
experiment and study have demonstrated the absolute necessity of
certain physical qualifications in the successful operative. I also
believe that in dealing with mental and nervous requirements, or in
filling vacancies such as in a sales force, where personality, tact, etc.,
are of great importance, an analysis can not be too complete. I am
convinced, however, that we face the danger of carrying job analysis
too far, of depending too much upon a set rule. Any semiskilled



operation will offer unlimited examples of highly successful work­
ers exactly, opposite in type to that called for by an apparently
practical analysis of that job; human nature itself is too complex for
us to expect it to conform with any degree of certainty to the most
careful job analysis. My view might perhaps be summed up in the
statement that any specifications for hiring should serve only as a
guide or reminder; constant contact with the workers and with the
work itself, coupled with a lot of horse sense, insures fairly successful
To get down to brass tacks, and to our methods of selection, I am
going to deal with this operation under the following general headings:
1. Personal interview.
2. Physical examination.
3. Interview with foremen.
4. Mental tests.
5. References.
In taking up topic 1, personal interview, let me explain that such
interview is necessary before receiving offer of employment by
Cheney Bros.; we make no promises of jobs by mail. In our window
interview we try at once to secure from applicant all the information
necessary for complete record and to give us a comprehensive under­
standing of the task at hand, namely, to place that applicant on the
job for which he is best fitted. Some of the important factors brought
out in this interview are the applicant’s education, experience, recent
earning power, stability on last job, whether or not he has friends or
relatives in bur employ—in other words, a “ stake” in our town
which would indicate the chances of his service being continuous—
and above all, the mental attitude of the applicant toward the work,
pay, conditions, etc. We work on the theory that we should attempt
to find a suitable job for the man and not a perfect applicant for
every job.
Our next step is the physical examination, compulsory for all new
or reinstated employees, all transfers, and promotions, regardless of
the class of work to be performed.
Statistics of the work of our medical department for the past year
are of a most interesting nature and show some surprising facts;
time does not warrant my giving much in this line, but a few items
might be worth while. Our medical department averages in the
neighborhood of 40 cases a day, it has disclosed nearly every form of
affliction and disease, corrected subnormal vision, advised and pre­
scribed for physical ailments, arrested incipient tuberculosis, pre­
vented the placing of color-blind applicants on color work, flatfooted sufferers on standing jobs, applicants with hernia on heavy
work, people with suspicious lungs in dusty places, and has per­
formed numberless such acts of humanity and of hard business sense.
You may wonder, in view of my last remarks, how we can find anyone



whom we consider fit to employ, and yet, without deviating from our
prescribed course for certain classes of work, our medical department
in a recent month rejected for employment only 11 applicants out of
a total of 240 and odd examinations. The humanitarian results of the
medical examination form sufficient argument for its installation in
every manufacturing plant, but the effect of such work is far from
altruistic; it should be interesting to the manufacturer, from the
standpoint of dollars and cents, to know that our medical depart­
ment is more than paying for total expense of maintenance in the
savings effected by reduction of absenteeism calling for payment of
health insurance, by reduction in amount of workmen’s compensa­
tion paid, etc., not to mention the benefits derived from improvement
in general health of employees with its resultant increased efficiency,
in raising the standard of physical condition and cleanliness of new
employees, and the beneficial effect on civic and home conditions.
So much for our physical examinations.
When we have selected and examined an applicant, with a specific
task in mind, we go one step further. We almost invariably send that
applicant for an interview with his prospective foreman. By means
of a small card and return envelope, we get this foreman’s opinion of
our selection. He may even express his unwillingness to accept the
applicant, but he must state his reason in full. If the foreman wishes
the applicant to work in his department, he checks on this card his
opinion of the man we have selected. Filing these cards gives us
some interesting references to compare with foremen’s opinions of
same employees when they leave or are discharged, and surely serves
to keep the employment bureau interested in this particular phase of
the work.
In dealing with the fourth topic under “ selection," that of mental
tests, I shall merely touch upon our application of such in connection
with selection of applicants for higher grade work— clerical, systema­
tizing and cost work, and executives and sales force. We are using,
in the main, a series of tests devised by Prof. Scott, whom we have
just heard in a very interesting and comprehensive talk on this very
subject. We have tested several hundred “ victims," tabulated the
results of papers for particular qualifications, and have watched the
actual achievements of the subjects of these tests. I can say without
reserve that the correlation of tests with subsequent accomplishment
is extremely high, and that such tests offer a very valuable aid in
selection for mental qualities. Another result of the tests of Cheney
Bros., and by no means an unimportant result, has been the stimula­
tion of our employees to take these tests as a means of advancement
and promotion to better work. We select all our loom fixers from
the ranks of weavers, on the strength of their “ showing" in a test
for mechanical ability; we have secured scores of good timekeepers,
schedule men, and clerks from those of our mill operatives who



showed ability on simple mathematics, general intelligence, speed,
and accuracy—just an added incentive to both employer and em­
ployee to foster the “ promotion from within” idea.
The last topic under discussion, that of reference from previous
employers, I believe deserves a few” words. There seems to be a
prevalent opinion among employment men with whom I have talked
that benefits derived from looking up references are, as a rule, doubt­
ful if not negative. 1 admit that we all frown when called upon to
fill out a long questionnaire asking for the color of the applicant’s
hair, how intimate our relationship has been with him and his family,
and whether or not he has ever given us a ride in his automobile.
We use at Cheney Bros, a card 6 by 4 inches with return stamped
envelope, asking former employer simply to check off, in spaces pro­
vided, the nature of the applicant’s service as to work, conduct,
ability, and character. We get excellent cooperation from firms to
whom we have appealed, and receive sufficient information in 95 per
cent of the cases investigated. Any one of the numerous instances
in which we have detected, by means of reference, labor agitators,
trouble makers, and men or women of objectionable moral habits
unquestionably has paid for the postage and slight extra labor for
the year.
This merely leads me back to the conviction that no employment
department is half accomplishing its purpose by selecting sufficient
help to supply the plant satisfactorily with workmen skilled in the
work required. We are striving to secure workmen who will be an
asset to the mental and moral status of our plant and our community.
The ideal type of employee which we are all scouting for will appreci­
ate the opportunity to work for a concern that realizes and expresses
its responsibility toward its human investment, and will feel a recipro­
cal responsibility to do good work and assist in making the relation
of employer and employee one of cooperation in all matters.
Furthermore, if it is made difficult for the undesirable to “ get by,”
the unhealthy or unclean to obtain employment, it follows surely that
the undesirable will not try to get a job at your door, and selection
from the greatly improved grade of applicants will become less and
less of a problem.
In closing, and as a balancing thought, let me state that figures for
the past few months show that we are finding work for approximately
76 per cent of our applicants. I emphasize this point for the follow­
ing reasons: If we are going to get anywhere in the larger scope of
personnel work— “ fellowship,” industrial democracy, Americaniza­
tion, and all—we employment men must school ourselves, even in
times of more plenteous labor supply, against anything but the most
discriminating and justified rejection of applicants. We are, all of
of us, laboring for the privilege of existence, of providing a home and
caring for our family; “ there is so much bad in the best of us and so



much good, in the worst of us” that we must surely be willing to give
our fellow men at least the benefit of the doubt.
The uproblem” resolves itself, as I see it, into ability to see some­
thing of the other fellow’s viewpoint; not to expect to select a 100
per cent efficient worker for each vacant job, but by study, experience,
scientific aids, and a whole lot of heart ultimately to place the de­
serving human souls that come under our influence in a position to
get the most out of their labor and their lives. The resultant benefit
in such cases to the employer, to the plant, to the community, and
to the great cause which has called this convention will certainly be
its own ample reward.
The C h a i r m a n . Thanks to the cooperation of the speakers this
morning, in keeping to the schedule, we shall be able to do justice to
the other two speakers announced and yet provide for a very im­
portant interruption at this moment. Mr. Gilman and Mr. Kenned}7
will deal with reasons for leaving, and Mr. Kennedy’s talk will be
illustrated with lantern slides, which will necessitate our darkening
the room. That would, of course, properly come toward noon, and
we shall be able to follow that program and yet give everyone of us
here the benefit of hearing a very important message. There is not
an employer in the United States who is not interested in knowing at
this moment what the Council of National Defense, through its ad­
visory committee on labor and welfare of workers, has just passed
on in Washington. Indeed, several gentlemen here have asked that
some message be secured from them. Two members of that advisory
committee have just arrived to take part in the proceedings—Mr.
Alvin Dodd, whom we are glad to know is willing to make a state­
ment, because he thinks it will be both reassuring and interesting;
and he suggests that Mr. John Fitch, the well-known industrial
investigator, will add anything that should be added to Mr. Dodd’s
statement. I will call on Mr. Dodd to say something about the
meeting in Washington yesterday and its relation to our convention.
A l v i n E. D o d d , secretary, National Society for Promotion of In­
dustrial Education. A meeting of the advisory committee on labor
and welfare of workers connected with the Council of National De­
fense was held all through the day and until nearly midnight yester­
day, and was of almost as much importance as the President’s message
given at the Capitol last evening at about 8.30 o’clock.
The welfare managers should know about the work that the Gov­
ernment now has in mind because they will take back to their com­
munities a message which will have great influence in maintaining the
poise and the clear thinking that is so necessary at this time.
First of all, you know, an organization of national defense was
appointed some time ago, consisting of the Secretaries of Agriculture,
Commerce, Labor, War, Navy, and Interior; Mr. Howard Coffin; Dr.



Martin, representing the physicians and surgeons of America; Dr.
Godfrey, representing the scientists; Mr. Gompers, representing labor;
and Mr. Willard, of the Baltimore & Ohio Railroad. The Govern­
ment is planning definitely on a three-year basis of war and our people
will be surprised at the careful planning that has been done by the
Government in anticipation of events.
The Secretary of Labor pointed out to us that it is not safe for this
country to count upon the developments in Russia as being of suffi­
cient influence over the rest of the world to bring peace early, and if
Russia proves to be unsteady, the situation confronting the United
States will be far more serious than many of us have comprehended.
The members of the Council of National Defense have been asked to
organize committees of citizens and representatives throughout our
country which may bring together the information, the knowledge,
and the judgment of the country, to be utilized in national defense.
The committee on labor and the welfare of workers which Mr.
Gompers was asked to organize sat all day yesterday and discussed
plans of organization. The feeling is very strong that this country
should profit by the experience of England and other countries. We
should not allow ourselves to become involved in the labor difficulties
which arose after the outbreak of the war in England. We should
guard against the very serious possibilities of disorganization and
disruption of industry and of the force now dealing with the most
important resources, which this country must place at the disposal of
the cooperating countries immediately.
It was felt that an organization committee should be called to plan
for certain subcommittees, and that the central committee and these
subcommittees should see if it would not be possible to work out in
our organization how to conduct the war successfully on a democratic
basis which would preserve our ideals of democracy and prevent
our reverting to the oligarchic methods which were necessary in
I wonder if you realize the rather extraordinary power that was
given to the President in the Army bill. The President and the
Secretary of War have power to-day to take over any plant or organi­
zation in this land and to utilize it for governmental purposes. It is
not intended, however, to proceed on that basis, except where actual
necessity requires. During the next few weeks it is hoped that the
machinery of organization may be put into operation so that it will
bring a cooperation which will be far more effective than any auto­
cratic methods, because it will bring not only efficiency but loyalty
and a spirit which we all realize is going to be so necessary for success
in whatever we undertake.
Now, briefly, these committees are made up of representatives of
the three groups, the Government, employers, and employees. There
are committees on wages and hours; standards; fatigue and physical


1 27

welfare; sanitation; housing; equalization and conciliation; and
These committees drew up the plans yesterday which are being
presented to the Council of National Defense to-day for approval and
judgment, and suggestions on the assignments of various functions of
these different committees which may have been overlooked.
The executive committee, which was appointed yesterday, and
which will remain on the job in Washington, consists of the following:
Samuel Gompers, president, American Federation of Labor, chair­
man; Miss Gertrude Beeks, National Civic Federation, secretary;
William B. Wilson, Secretary of Labor; Warren S. Stone, grand chief,
Brotherhood of Locomotive Engineers; Frank Morrison, secretary,
American Federation of Labor; James Lord, president, mining
department, American Federation of Labor; James O’Connell, presi­
dent, metal trades department, American Federation of Labor;
V. Everit Macy, president, National Civic Federation; Elisha Lee,
general manager, Pennsylvania Railroad; Lee K. Frankel, third vice
president, Metropolitan Life Insurance Co.; C. E. Michael, National
Association of Manufacturers; James W. Sullivan, assistant to Samuel
Gompers as member of advisory commission; Louis B. Schram, chair­
man, labor committee, United States Brewers’ Association; R. M.
Easley, assistant to Samuel Gompers as chairman of executive
The committees gathered yesterday were asked to go back to their
communities to set the machinery of every national organization in
motion and everybody in this country at work on careful thinking
and planning of how each might be of the greatest possible service. .
The time has come when we are to turn our faces not toward the
past and the difficulties between labor and employers, but as to how
we shall get together for the common purpose of preserving this
Nation and the ideals on which it was founded.
There is no more important group of people, who will deal with the
problems before us, than those representing the employment end of
the various industrial concerns over our land. It is not the idea of
the Government that we are going to need at once enormous numbers
of soldiers for service abroad, and even if we did need them our
situation is such that they could not be efficiently prepared. The
maintenance of supply ships between this country and Europe would
be almost physically impossible for maintaining such a force, if we
were able to send such a force over at once. But, as the President
pointed out in the message which you have all read, all our industrial
and financial resources may be quickly mobilized and during the next
few months we will be preparing the military and the naval service
for the work which they may have to undertake.
The problem of food alone in this country is regarded as very
serious. It is extremely important that the agricultural as well as



the industrial opportunities and facilities should be speeded up, and
that we should get busy at once on the question of supplies, not only
for ourselves, but for the countries across the sea.
There are certain very fundamental questions such as the standards
which labor has carefully built up, and which may be more or less
changed during the next few months or years, with which the workers
are concerned, and these in fairness and in all propriety should b©
definitely understood and settled before we go very far. . We do not
want any questions in the minds of employers or employees that will
hold back the progress of our Nation in the fight in which we now are.
I think the greatest significance of the meeting yesterday was that
some of the people most hostile as individuals forgot all differences,
and sat down together on this problem, with the determination to
reach a proper and satisfactory understanding on plans. If the war
goes as far as it may, one great good will come out of it—better un­
derstanding between capital and labor.
J o h n A. F i t c h , of the Survey, New York City. There is but little to
be added to what Mr. Dodd has said of the significance of yesterday’s
meeting. It consists in the fact that those groups of people got to­
gether, and they got together historically nearly a year ahead of the
same thing’s happening in England. Not much has been done yet.
What may be done is the important thing, and the cooperation of you
who are in the meeting and doing the important things that you men
are doing is absolutely essential to make tJiat meeting of yesterday
really work out any accomplished facts.
The spirit of the meeting was what Mr. Dodd has told you. Mr.
Howard Coffin appeared at the meeting and said that the manufac­
turers of the country would be willing to serve their country without
regard to making profits in time of war. I do not mean to say that
he said they were willing to manufacture goods without profit—they
ought not to do that—but he made it clear that there would be no
desire to take advantage of an opportunity to make excessive profits.
The Secretary of Labor, a member of the largest union on this con­
tinent, the United Mine Workers of America, with 400,000 members,
said that labor was ready to make concessions; that labor would not
demand all that it has been demanding and all that it might demand
under other circumstances; that they, too, were prepared to make
concessions in order to serve their country.
The thing that I want to call particularly to your attention, how­
ever, was the thing that stood out through all the discussion, and it is
a thing which I think concerns a point that is a very grave danger.
We are likely to have, on the one hand, demands made upon people
that they shall do more than they ought to do. On the other hand,
there will in all probability be a desire on the part of many people to
do more than they ought to do, to try to do so much that they will be
ineffective rather than effective.



Already there are suggestions that laws that set up standards and
put restrictions on employment should be set aside for the time. A
bill is before the New York Legislature to abandon standards that
.have been worked out through many years. Such bills will un­
doubtedly be passed in other States. On the other hand, it is pro­
posed by union men that they shall voluntarily give up restrictions
on the hours of labor, and a little while ago a labor man of promi­
nence was quoted as saying that labor would be willing to work 15
hours a day in an emergency if necessary.
Now, that is splendid, but those who are offeiing it and asking it,
who read the history of England in the last few years, know that that
sort of thing is not efficient, that that sort of thing does not mean the
utmost output. At the beginning of the war they threw aside all
restrictions; they worked overtime and worked seven days a week.
There was a case where some girls worked 24 and 30 hours on a stretch,
and there was a prosecution under the law on account of that over­
working of those employees, and the judge dismissed the case and
said the girls were entitled to medals for the work they did. Yet
when they sent a government committee to make an investigation
they found that in the interest of getting out munitions it was neces­
sary to put back the restrictions, not all of them, perhaps, but to put
back the one day of rest in seven, and to put a limit upon the amount
of overtime that would be permitted.
They also found it was a good thing to give back the holidays
that they had taken away, and recently I understand that several
additional holidays have been given to the workers in England, and
also that vacations are given sometimes, in order that the workers
may be refreshed and strengthened, so that they can go back to
their work with renewed vigor and help England to win the war.
Now, this is the point—we have, on the one hand, to keep in mind
that a demand will come from the public that men should work
beyond their strength, and on the other hand, to restrain that patriot­
ism that will suggest to workers that they do work beyond their
That point was emphasized throughout the meeting yesterday, and
yet it will have to be carried out far beyond anything that the
members of that committee can do; it will have to be recognized
and preached by everybody that has an opportunity anywhere to
exert influence, and may I commend to you the examination of
the reports of the Committee on the Health of Munition Workers,
which committee was organized under the ministry of Lloyd George,
as Minister of Munitions, and which said at the outset that they
had but one purpose— to determine how best to secure the efficiency
of the workers. They had no sentimental influences, no emotions
103021°— 17— Bull. 227-------9



whatever; they wanted to know how to create the maximum effi­
ciency in order to win a war, and with that spirit they suggested
reasonable restrictions on hours of labor.
The C h a i r m a n . Are there any who wish to ask questions of Mr.
L. S. T y l e r , of New Haven, Conn. There is one question I would
like to ask: Whether these organizations, which are not directly
and self-evidently engaged in the manufacture of war supplies and
which have offered their plants and. organizations to the Govern­
ment, when a call for volunteers is issued by the President, as will
probably be the case very soon, are in danger of losing elements of
their organization vital to the proper running of their plant if the
Government should need that organization and plant in the near
future ?
I ask this on account of our own situation, for the better part of
our executive organization consists of young men who attended the
Plattsburg camps last summer, and who will be the first to answer
the call for volunteers. To what branch or office in Washington
may we refer for specific directions as to whether we should report
to them a danger of breaking up our organization as the result of
a call for volunteers, or whether the men should be allowed to act
as they see fit ?
The C h a i r m a n . For the present I should communicate directly
with Mr. Howard Coffin, of the Council for National Defense. It
is the feeling, I think, of all concerned, that the call for half a million
men which the President has asked Congress to issue very shortly
will not seriously disrupt the industries or the concerns making
either munitions or necessary supplies, though it may do so in some
cases, but the council has very much in mind the necessity for early
organization in order to protect the country in just the way that
has been implied by Mr. Tyler’s question.
Now, there was a very strong note sounded that the Government
should take steps at the earliest possible moment to prevent hard­
ships coming upon families of men who did enlist, and I dare say
that within a very few days some things will be worked out, or at
least the thought will be crystallized for later action on that problem.
It is so obviously impossible for us to use our troops to any extent
at the present time except for internal protection, etc., that there
is going to be time for gathering the machinery together. I do
think that the plants having employment managers here and the
plants having large numbers of workers should take into account
what has been brought up, Shall we or shall we not urge our workers
or perhaps hold them back a little, or consult with them about the



desirability of their going into service at once? Of course through
the National Guard the larger number of soldiers will be recruited,
but there are going to come within the next few months developments
along other lines, perhaps Federal or national lines, for gathering
troops, and one of the things that is sure to come to our attention
is the taking of workers from places or allowing workers to go from
places where they can be spared or whether other workers can be
shifted, from one work to another, perhaps from plant to plant or
locality to locality, to meet the vital needs of the country.
Mr. T y l e r . T h a t answ ers m y qu estion .
The C h a i r m a n . Mr. Wells, will you read the report of the organi­
zation committee ?
Mr. W e l l s . The committee that was appointed and was requested
to meet in accordance with the motion passed at last night's session
got together in the evening and discussed the question of forming a
national organization. It was felt that while the time was hardly
opportune for forming a formal organization with elaborate machinery
yet there was need of a closer affiliation among the existing associa­
tions. It was also felt that to a great extent the wonderful success
of the employment managers’ movement had been due to the fact
that there had been in the several communities groups that had been
working intensively on the question and that nothing should be done
which would interfere with the work of the local association. It was
the unanimous opinion of those present at that meeting last evening
that no formal organization should be formed, but that we should
have a national committee of employment executives’ associations,
with a single representative from each local employment managers’
association, or other organization which is similar in character;
that in addition to this national committee, which is the one which
would have power to arrange national conventions and to take up
such matters of cooperation that might seem desirable, there should
also be an advisory committee consisting of two leading business
men selected from the community by the local association. In
accordance with the sense of the motion that was passed, expressing
the opinion of the group assembled last evening, the following reso­
lution has been prepared, which with your permission I will read and
then move its adoption:
R epor t


O r g a n iza t io n C o m m it t e e .1

Whereas it is desirable to bring about a closer affiliation among existing organizations
of employment executives and such other similar organizations as may be formed in
the future; and '
Whereas it is desirable to provide a means of arranging for future annual conferences:
Therefore be it

1 See footnote p. 132.



Resolved by this convention, That there be established a national committee of
employment executives for the purpose of bringing about a closer affiliation among
existing associations, and that each of the following organizations, namely—
Boston Employment Managers’ Association,
Employment Management Group of the Detroit Executive Club,
Chicago Employment Managers’ Association,
Philadelphia Association for the Discussion of Employment Problems,
San Francisco Society for the Study of Employment Problems,
New York Society for the Study of Employment Problems,
Newark Society for the Study of Employment Problems,
Rochester Employment Managers’ Group,
Cleveland Employment Managers’ Group,
Pittsburgh Employment Managers’ Association,
be requested to select one of its active members to serve as a member of this national
committee, said committee to elect its own chairman and secretary; and be it further
Resolved, That the duties of this committee shall be, first, to arrange for a general
meeting similar to this convention, approximately one year from this time, in coopera­
tion with such local association as may be selected by said committee; and, second,
to arrange for such cooperation among local associations as may seem desirable to the
committee; and, third, to invite such other organizations of employment executives
as this committee may decide to be eligible to membership in this affiliation to
become members and designate one of its members to serve as a member of this
national committee; and be it further
Resolved, That the executive committee of each local affiliating association be
requested to select two leading business men who are actively represented in the
membership of such local association to serve as members of an advisory committee
to the national committee of employment executives.

Mr. W e l l s . That is the resolution which I believe embodies in a more
formal manner the sense of that meeting, and I move its adoption.
[The motion was seconded, the question put, and the resolution
unanimously adopted.]
L in c o l n F i l e n e , of William Filene’s Sons Co., Boston, Mass.
May I say just one word at this particular moment? As most of
these employment groups are here in the east, and as we only have a
few from the Middle West, I think it is wise for your committee to
1 This committee met at Rochester on May 17,1917, to organize a permanent national committee which
would serve to correlate the independent local organizations. The following committee was appointed:
Chairman: Joseph H. Willits, secretary of the Philadelphia Association for the Discussion of Employ­
ment Problems.
Vice chairman: John C. Bower, secretary of the Pittsburgh Employment Managers* Astociation.
Secretary-Treasurer: Ralph G. Wells, secretary Boston Employment Managers’ Association.
Mark M. Jones, president of Newark Society.
C. L. Miller, secretary Employment Managers’ Group, Detroit Executives' Club.
W. H. Winans, Employment Managers' Graup, Manufacturers and Wholesale Merchants Board, Cleve­
E. B. Gowin, secretary The New York Society.
C. R. Beard, president Chicago Employment Advisers* Ciub.
Lewis B. Ermeling, Rochester Employment Managers' Group.
F. Dohrmann, president San Francisco Society.
The object of this organization is stated as follows:
(1) It aims to bring about a closer cooperation between organizations devoted to the study of employ­
ment problems;
(2) It shall arrange for national conferences; and
(3) Assist in the interchange of reports of meetings, investigations ,and information of interest to local



have taken cognizance of that point, as they have done. But it
seems to me that this group of men could take back into their factories
this one thought, and that is that concerns which they represent ought
to ask themselves concerning the attitude of the management toward
the enlistment, and the help generally, of the men and women in
their employ in this crisis of American history, and what they are
really going to do when their men say they want to enlist or their
women say they want to enlist, or the city or State or country is
calling on them for special service.
In other words, if this group could take back into their organizations
an outline or survey of the attitude which the firms they represent are
going to take in this crisis in our history, the work which the em­
ployment managers are now on the eve of making so great and so
important a factor in history will well have begun.
I want to say that I have just returned from a three months’
vacation, and have not been home, and yet in my mill yesterday
morning I received the statement of the manager of our concern,
which told what attitude the management was to take toward the
men and women enlisting, how we were going to substitute their
work, what part of our organization could in a measure substitute,
so as to expand at the point where the men who went to war if they
had to go would be able to get the same salaries that they get, by help­
ing out with the rest of the organization, within reason, and to keep
the pay roll within bounds.
Those are only two or three points, but we have a great many things
in which we here are going to be able to aid.
The history of what has happened in Europe and the substitution
of men in factories ought to be known to every man and woman here
who has anything to do with employing help. There is a great deal
of history already made, which this country does not need to repeat,
in the mistakes of Europe, and if we could find out just what has
happened in Europe, and how much of that should not be applied
here, it will adjust itself and some day we will look back in a proud
way in thinking that the first national meeting of employers was at a
time of crisis in this country.
I hope the men and women here will take back that word to their
own organizations and be able to tell the National Council of Defense,
or other Government agencies which may need this kind of knowledge,
be able to tell the Government, what their concerns are willing and
ready to do.
The C h a i r m a n . N o w , to carry out suggestions Mr. Filene and
others have given, we need technical information. The next speaker
will be Mr. J. T. Gilman, employment supervisor of William Filene’s
Sons C o ., Boston, Mass.


No progressive business house to-day questions the statement that
one of the largest economic losses in industry is the loss due to high
labor turnover. It seizes with avidity upon any machinery or
method of control which will tend to reduce the number of “ hirings
and firings.”
Mr. Boyd Fisher, of Detroit, in his paper “ How to reduce labor
turnover,” has given a complete and comprehensive method of
attack upon the problem. At the moment we are concerned only
with the “ reasons for leaving” as an aid to the reduction of turnover.
In order that we may have a guaranty that leavings are for ade­
quate reasons and that control of them is efficient, it is absolutely
necessary that all questions affecting individuals or groups of indi­
viduals should be placed in the hands of a labor department, which
should have full power on all questions of employment, discharge,
transfer, wages, hours, and conditions of work, etc. I do not mean by
this to take away from foremen or department heads the right to
remove from their department, but to take away from them the right
to remove from the business, thus giving the labor department an
opportunity to check the action of every department head, to inves­
tigate every case of removal, and also to have an opportunity to try
out the individual in some other place.
In Filene’s we have an added check through the arbitration board,
a short description of which will not be out of place.
Purpose.—The purpose for which arbitration is established in the
business is to insure justice in the administration of the work of the
Scope.—The scope of its activity shall include all cases in which
any member of the cooperative association has reason to question the
justice of a decision by a superior or the action of a cooperative
association committee or member.
Duty.—The duty of the board shall be to see that justice prevails
either by initiating an inquiry or by granting a hearing to any member
of the cooperative association. It shall conduct an exhaustive exami­
nation of each case coming before it.
Powers.—The powers of the arbitration board are intended to
extend to all cases of difference relating to—
(1) An employee and the management.
(2) Two or more employees in matters of store interest.
(3) The justice of a rule in question affecting an employee.



The questions most frequently brought before the board are of
dismissals, changes in position or wage, transfers, location in the
store, missing sales, shortages, lost packages, breakages, tom or lost
garments, differences between employees, payment for suggestions.
The decision of the board is final for all cases- arising within its
jurisdiction; it may, however, reconsider a case upon request if it
so chooses.
In cases 01 dismissal or increase of pay a two-thirds vote of the
entire board is needed but in all other cases a majority vote of the
entire board decides the case, and in cases of salary deductions shall
be an order for refund.
In minor cases, by majority vote of the whole arbitration board,
the chairman may appoint a subcommittee of three members to act
as an arbitration committee. Its action may be appealed from, by
either party, to the board for confirmation or further action by the
Any executive may have any controversy between him and the
executive authority of the corporation, in respect to his employment,
arbitrated by a special committee—one member to be chosen by the
executive, one by the corporation, and the third by these two. De­
cisions given by a majority of these three arbitrators is final.
The arbitration board consists of 12 members elected one from
each section of the store, and a chairman appointed from the council
by the president. The member of the board elected from each sec­
tion of the store shall be the counselor or adviser of that section.
Duties of the section counselor are:
(a) To advise the employees of his section on questions arising
in the conduct of their work.
(b) To distribute information as to the arbitration board among
the people of his section.
(c) To instruct an appellant in the detail of presenting his case
before the board.
The findings of this board are confidential; It is of interest, how­
ever, in viewing its work to note that through the years, the cases
seem to average about half in favor of the firm, and half in favor of
the appellant.
The action, or I might say, possibility of action by this board
guarantees the cause of dismissals before allowing discharges to be
made. By a more careful investigation of all requests for removal,!we have cut the number of arbitration cases, during the past two years,j
from about 60 per year, to only 7 cases in the last 10 months, and those;
were cases where the issue was not clear cut, but largely a matter of
In order to arrive at a fair decision on any case, the first thing to
secure is the real or fundamental reason given upon the request for



removal. By fundamental reasons, I mean such things as health,
home conditions (concerning which most concerns know all too
little), bad working conditions, unfair boss, and the like. Our
monthly employment record is open to criticism from this standpoint.
The reasons for leaving listed upon it are too general. Take, for
example, unsatisfactory work as a reason. There is seldom any
doubt that the work of the individual is unsatisfactory, but what is
the reason ? May it not be due to home conditions which cause an
unsettled state of mind? May it not be due to bad habits after
business hours ? May it not be due to a physical defect not easily
discerned ? Or perhaps to as simple, but hard to discover, reason
as personal dislike on the part of the boss ? As another example, take
illness: Who is to blame, the individual himself or the business, be­
cause ot the conditions surrounding his employment ? To my mind,
it is imperative, if we are to know the facts as to why our people
l§ave, that we must use only the most fundamental reasons as a basis
for analysis. Fundamental reasons must be individual reasons. No
two people are alike and no two sets of factors the same, and it is my
bslief that we should individualize our analysis of labor turnover.
We should not deal with our employees as so many people, but look
upon them as Nellie Jones plus Helen Smith plus Bessie Brown. If
we believe in democratic principles in industry as we do in govern­
ment, it is the only way we can look upon labor.
Now let us consider the machinery to use in the analysis of the
reasons for leaving.
At Filene’s we have a form which is called “ Monthly employment
record.” It is in a transition state and far from ideal, but, we believe,
a move in the right direction. This record is in the form of a large
sheet and summarizes the changes in personnel for the entire store,
both numerically and from a dollars and cents’ point of view.
At the left the several departments and divisions of the store are
listed with intervening summary columns. The tabulation columns
fall under two general headings— “ Entrances” and “ Leavings.”
The first column shows for each department and division the num­
ber on the pay roll the first of the month. Next comes “ Number
added,” which is subdivided into “ New people,” and number added
“ By transfer.” “ Amount of salary those added” very properly
appears next, after which are two cumulative columns for “ Number
added and amount of salary of those added for the month and since
September first, ” which is the beginning of our fiscal year.
The tabulations for “ Employees leaving ” fall into the two divisions
of “ Resigned” and “ Dismissed.” There is a separate column for
each of the several reasons for leaving.
Under the head of “ Resigned” are: “ Illness,” “ Died,” “ Leaving
town,” “ Other line of work,” “ Return to school,” “ Marriage,”



“ Better opportunity,” “ Stay at hom e/7 “ Refused transfer,” “ Dis­
satisfaction,” “ Left without notice,” “ No reason given.”
The reasons for dismissals are: “ Dishonesty,” “ Expense reduc­
tion,” “ Unsatisfactory work,” “ Irregular attendance,” “ Disobe­
dience,” “ Bad habits,” “ Unsatisfactory references,” “ Unable to get
along with associates,” “ No opportunity.” This last arises where
employees have obviously reached their limit or are not adapted to
the job, in which case it seems best for the employee concerned to
seek another line of work for which he might be better suited. This
we believe to be important because it acts as a check on the employ­
ment office from a standpoint of poor selection. People are never
dismissed for this reason until they have been given an opportunity
to try out in some other line of work. If we are unable to fit them
into positions for which they are better adapted, the employment
office then endeavors to find them jobs elsewhere. I am glad to say
that in many instances we are able to place them.
Columns for totals leaving, with salary figures, figured also from
September first, are included.
. This tabulation embodies two additional analyses, by depart­
ments, which are interesting and particularly useful to the executive.
One of these is a summary of the length of service of those leavipg,
Under 6 months.
Under 1 year.
From 1 to 3 years.
From 3 to 5 years.
From 5 to 10 years.
Over 10 years.
A careful analysis of these figures will throw the spotlight on
departments with high turnover and short periods of service.
Watch your new people. Know when they leave after short
terms of employment as well as the reasons themselves for leaving.
There is usually some connection between this “ why and when.”
Secondly, turnover is figured by departments, both monthly and
cumulatively since September first.
This tabulation presents to the management monthly a complete
employment balance sheet and when supplemented by special reports
covering unusual conditions forms a complete industrial audit.
It may be repeated that the success of the scheme lies in the con­
stant vigilance on the part of the executive in checking by personal
investigation the “ exceptions ” as pointed out to him by the summary.
The main weakness which we find with this form of record is the
one already spoken of, the reasons which we are at present using we
do not consider fundamental enough. Bearing this fact in mind, by



special investigations of such reasons, we, to some extent, are able
to obviate this weakness.
The advantage of this summary sheet is our ability to figure
turnover by departments or bosses, by reasons for leaving and by
length of service. It also acts as a check upon pay roll.
To sum up, an analysis of the reasons of leaving and its use fall
under three main divisions:
1. Guaranteeing that there is a reason for leaving by—
A. Centralized employment.
B. Centralized discharge.
C. Appeal to arbitration.
2. Securing the fundamental reason for leaving. It should be
fundamental instead of superficial, as is too often the case. Funda­
mental reasons fall logically into three divisions:
A. Relation of the individual to himself. (Home conditions,
health due to habits outside of the business, inherent
physical weaknesses, etc.)
B. Relation of the individual to his environment. (Working
conditions—light, ventilation, dust, etc., occupational dis­
eases, accident, etc.)
C. Relation of the individual to his executive. (Departmental
3. What do the reasons for leaving mean? i. e., analysis by—
A. Departments.
B. Causes.
C. Length of service.
Modern industry is losing that advantage which grew out of the
intimate and close touch which the old-time boss used to have with
Bill Jones, Tom Smith, and John Brown, and their families.
The thought which I feel to be most important, and which I hope
you will take home, is that we are all inclined to deal with the prob­
lems of labor in the aggregate and in our analysis do not individual­
ize enough, for in dealing with people no two cases have identically
the same factors.
The C h a i r m a n . In order that we may arrive here promptly at
2 o’clock for one of the important sessions, Mr. Kennedy has been
Jrind enough to agree to postpone, until this afternoon, his illustrated







C O .,

The C h a i r m a n . It is my pleasure to introduce some one who needs
no introduction to anyone interested in these subjects. I am glad
to present Miss Gilson, who will speak for herself.

“ First catch your hare and then cook it,” implies that, while the
act of catching the hare is a very important preliminary, it is after
all not the whole story. So it is with catching the employee. It is
essential to select the right man for the right job, but it is equally
important that this should be regarded as merely the first step of
many leading to the development of the personnel of an organization.
When an applicant is chosen from our file to fill a certain position
in our organization, he is notified to come in at a specified time or to
notify us when his services will be available. The first procedure
when he comes to us consists of eye, dental, and general physical
examinations, a careful record of which is kept in such form that all
further data concerning the health of the employee may be entered
on the same sheet. If a physical defect which incapacitates the
man for the job in question is discovered, an attempt is made to
place him elsewhere. In this case his record in the office files is
starred so that the medical record may be consulted if a transfer is
contemplated at some later time. In case the employee reveals no
disqualifying physical defect he is turned over to the superintendent
of the employment and service department, who introduces him to
the general manager and then talks to him on the following subjects:
I. Responsibility of organization toward worker:
1. Earning opportunity—
(а) Hours of work.
(б) Minimum starting wage.
(c) Wage system (piece rate, task, etc.).
(d) Basis of promotion.




I. Responsibility of organization toward worker— Concluded.
2. Regularity of employment—
(a) Providing of work and exact positions.
(b) Scientific assignment of workers according to need.
(c) Teaching each worker several operations.
(d) Security of position.
3. Policies and methods of cooperation—
(a) Purpose of service department—
(1) Adjustment of all difficulties.
(2) Cooperation in development of mental, physical, and social
(b) Purpose of instruction department.
(c) Purpose of other departments.
II. Responsibility of worker toward organization:
1. Responsibility for maintenance of proper physical and moral conditions—
(a) Value of neatness and order in surroundings.
(b) Wholesome moral atmosphere.
(c) Plain business dress and courteous manner.
(d) Democratic spirit.
2.* Regularity of attendance—
(a) One worker for each position.
(b) Importance of care of health with aid of factory medical department
(c) Importance of home hygiene and avoidance of outside work.
(d) Importance of regularity of hours and wholesome recreation.
3. Prime importance of character—
(a) Character the greatest essential to fitness and advancement.
(b) Reasons for giving proper notice when quitting (bonus for notice).
(c) Necessity for being patient and reasonable and for giving work fair
(d) Frankness and promptness in presenting complaints and criticisms.

After this interview the superintendent of instruction is notified
to bring to the service department the proper instructor and the
employee is introduced to him with the explanation that he is to
pay close attention to the correct method of performing his opera­
tion and that he is not to concern himself with output until he is
thoroughly acquainted with the one right way of handling his work.
The instructor then helps the employee select his seat in the lunch
room, his locker, etc., afterward taking him to his place of work
where he meets the production and quality foremen, and instruction
in the operation assigned is given. At lunch time the instructor sees
that the employee meets the person at the head of the table where
he is to eat, and it is the latter's duty to get him acquainted with the
other people at the table. Before the new worker leaves the factory
on the first day someone from the service department sees him in
order to discover what has been his reaction to the day's work, and
to reassure him if he has qualms and doubts concerning his ability
to “ make good." The employment and service department finds it
advisable to have friendly and informal chats with every new em­
ployee the first, second, and third days, then at the end of a week and



ten days and two weeks, and so on until he has taken root and the
first difficulties of adjustment are over.
The primary objects of the interviews of the employment and
service department are not only to give information, but to establish
friendly contacts. We aim to impress the worker with the fact that
there are people in the organization who are definitely and vitally
interested in him as a human being, and that our services are at his
command if we can do anything to help him to secure steady and
good earnings and to further the development of himself and his
It is very important that a friendly attitude toward new workers
be developed in the entire personnel of an establishment. This
can best be done by individual and group educational work. We
have three valuable channels of communication through groups.
These are foremen’s meetings, employees’ advisory council, and heads
of tables’ conferences. Our foremen’s meetings are held once a week
and are attended by production, inspection, and instruction foremen,
and by superintendents and other executives. The foremen are made
responsible through these meetings for explaining individually to
their people the necessary instructions. The employees’ advisory
council, meeting also once a week, consists of one representative from
every section in the factory and takes up questions of general and
specific policy affecting the employees. The only group having the
power of decision is the employees’ advisory council, which often
assumes the functions of a jury when questions of general interest
come up. A Wellesley professor once told me that in examination
one of her students had said, “ The difference between mediaeval
trial by ordeal and trial by jury is that trial by jury rested on common
sense and trial by ordeal rested on the judgment of God, and was
wholly unsound.” If this is a valid distinction, then the judicial
methods of our advisory council are wholly sound. The heads of
tables in the men’s and women’s dining rooms are elected by the
people who sit at the tables and meet once in two weeks. These
heads of tables have an excellent opportunity to discuss inform­
ally with the people at their tables any question of general in­
terest. Frequently we find that it is much more effective to ask
the heads of tables to report to us what the opinion of the majority
is on a given subject than to attempt to have mass meetings. In
fact, we try to get the people’s viewpoint in every possible way, and
we find the reaching of each and every employee possible through
our individual contacts or through the medium of these groups. It is
only by “ putting it up to” bodies of responsible workers such as
these that an atmosphere of cordiality toward the new worker can be
created. By stirring the hearts and imaginations of all, by awakening
a spirit of fellowship, by arousing a genuine contempt for snobbery—




only by these methods can such results as, for instance, the kind
treatment of the newcomer be insured. The caste and clique systems
among the employees in the ordinary industrial organization have
contributed materially to the discouragement of new workers and the
consequent large labor turnover figures during the first few weeks of
employment. We are glad to say our office force and the clerical
workers throughout the factory have long since passed the milestone
of development which marked a feeling of superiority toward their
fellow men. They do not feel, as so many clerical workers in a manu­
facturing establishment do, that they belong to the Brahmin caste.
We have enumerated the principal details in the following up of
new workers. How about the great body of employees whose roots
are firmly established ? Do they not wish or require any manifesta­
tion of interest on the part of the firm and its representatives ? We
may honestly say they do. It is a matter of rejoicing, moreover, on
our part that our people have such a fine spirit of confidence in our
attitude toward them, that they do not hesitate to ask for help in the
solving of their problems. They are not like the old woman who
hurried up to the ticket window demanding a ticket “ at once,” and
when the ticket agent asked her where she was going, said petulantly,
“ Well, do I have to tell you all my personal affairs?” Our Clothcraft men and women are intelligent enough to know that they must
be frank with us if they wish our help and advice, and many a boy
or girl goes to the manager of our organization or to one of his rep­
resentatives as to his or her best friend, knowing there is no possi­
bility of finding in response anything but the deepest human interest
and that confidences will be jealously guarded. The follow-up work
of so many establishments has pitifully failed because of a confusion
of aims on the part of the management, because the management
does not assume responsibility for training as a natural sequence to
hiring. The lawyer does not say to his client, “ Now, I will go just
so far and no farther in inquiring into this case I have undertaken.”
He says, on the contrary, “ I will do everything in my power to benefit
you, but you must help me to do this by giving me your unreserved
confidence.” Why is this method, which is essential to the success­
ful results of the lawyer, the physician, and the minister, considered
by some people paternalistic when practiced by the industrial man­
ager ? Merely because these people do not think clearly on the sub­
ject. The physician, because of his wide experience, knows what
personal habits will prevent ill health. Similarly, the man who has
had wide experience in an industrial organization should know what
will make for success in that organization, and should be able and
willing to point out clearly and unhesitatingly the line of conduct
which will bring that success. With neither patient nor employee
can real results be attained if there are too many mental reservations



on the part of either. If a girl is deliberately forfeiting a good earn­
ing opportunity by late hours, improper diet, and an aversion to fresh
air, is it intrusive and impertinent for the man or woman of expe­
rience to call her attention to the outcome of her carelessness ? If a
man is plainly developing faults which will eventually cause him to
“ come a cropper," is it objectionably paternalistic to show him
clearly the trouble he is storing up for himself ? How many times we
have heard people say, “ If some one had only told me!" Our policy,
then, in the Clothcraft shops, is to be frank and open and aboveboard
with each other, the management with the employees and the em­
ployees with the management. Our philosophy is based on the hy­
pothesis that life is a school, and that no one, ourselves included, has
attained a sufficient degree of training and education to be considered
a graduate. Our philosophy is also based on the theory that justice
and fair play and the rights of the individual can in no other way be
so securely established as through human sympathy and under­
I am amused at the wide-eyed surprise of some of our business
friends when we tell them of the extent of our personal work in the
homes and at the factory. Some of them, convinced of the efficacy
of human interest but still not comprehending the methods, say,
teOh, well, of course you know you have a different class of people
from ours. Our people wouldn’t stand for that." I wish to say
right here that our men and women are even more independent and
self-respecting and devoted to personal liberty than the average, and
that they are not merely acquiescent but grateful for help and advice
and encouragement. As for the younger workers it is sheer ignorance
and selfishness to deny responsibility in connection with their train­
ing. I believe it has been estimated that 85 per cent of the boys and
girls of this country never see high school, and we know that, of these,
thousands never pass beyond the fifth grade. Vocational education
and vocational guidance are making big strides in preparing boys
and girls for the work they are to undertake, but I do not look for the
time ever to come when industry can afford to shift the entire respon­
sibility to the schools, either in the matter of vocational or of char­
acter training.
We find that the majority of boys and girls consider themselves
educated for life when they leave school. Should it not be one of
our plain duties to impress these young people with the actual neces­
sity of keeping up some form of mental training outside of working
hours? Our work itself requires mental effort, as our people are
engaged in very few operations which do not demand concentra­
tion and a careful adherence to our quality standards. Moreover,
they do their own bookkeeping and must be capable of understand­
ing and following instructions regarding routing of work, help outs,

1 44


etc. In connection with this I may melition that Dr. Scott, the
eminent psychologist, very recently conducted some tests in our
organization which have led us to deduce that the successful per­
formance of our factory work requires a higher standard of mentality
than of mere manual dexterity. Whether, however, any especial
kind of work, repetitive or nonrepetitive, requires mental effort is
beside the point; we assert that no industrial organization can afford
to let pass any possible opportunity for the continuous development
of the minds and characters of its members. The progressive man­
ager knows full well that a staff of workers without any incentive or
ambition is an expensive and losing proposition. It is not enough
to talk in glittering generalities about chances for advancement when
a worker is hired; far more important is the definite and specific
mapping out of the path upward, and this is a procedure, which to
bear fruit must stir both the mind and spirit of the worker. More
and more as functionalized management is adopted, people must be
trained for leadership, for the guidance and direction of others; and
more and more as employer and employee occupy a common ground
must there be, not the old stolid acquiescence or antagonistic sus­
picion, but an intelligent understanding of mutuality of interest, of
the joy and profit of team play. Each worker must be brought to
realize the part he performs in providing steady work for his fellow
workers by his promptness, his regularity of attendance, his everwilling spirit to coopera te with each and every member of the organi­
zation. Workers must realize their interdependence and the value of
mutual help. Above all each individual must realize that his per­
manent success can not be achieved apart from the success of the
entire body of workers; that the man who would “ make good” must
know the value of cleanliness of personal habits, of faithful response
to duty, of consideration of others, and of the accurate and honest
performance of his work. Women and girls must learn that thorough­
ness in business adds to their womanliness, and that they can not
profitably regard their work as unworthy of their best effort merely
because there is a probability of its being temporary. They must be
taught that industrial efficiency is an asset to them even though they
later elect to become wives and mothers; that assuming of responsi­
bility, that reliability and honesty count in any walk of life. All
these points of view can be brought about only by the development
of the general intelligence of the worker.
There are still, I regret to say, business men who hold that manual
dexterity is all they require in their workers, not realizing that it is
as important for the manual worker to preserve an even balance by
mental development as for the mental worker to preserve his by some
form of physical exercise. Aside from the harm which such managers
work to the community, they are too shortsighted to observe that it



is only by furnishing mental stimulus, by helping to develop each
worker in the organization, that the entire personnel becomes steadier
and more reliable, that wrorkers are more competent to observe the
laws of health, that they are more intelligent in the spending of their
time and money, and that, above all, you can “ get across” to the man
who uses his brain. The man who has been trained to think is amen­
able to reason; the man without mind follows brute instinct, and is a
menace to the well-being of any organization.
What, then, are the means most effective for the development of
workers? We have mentioned the instructor whose duty it is to
teach the worker the correct method of performing his operation.
It is very important that the superintendent of instruction and his
staff keep in close touch with the employment department, as the
instructors have unequaled opportunity for the observance of the
characteristics and aptitudes of the worker. If, after a reasonable
length of time, an employee does not evidence any progress, and the
instruction department advises a change in type of work, a transfer
is effected. This is not done, however, without a careful investiga­
tion by the service department to make sure the lack of success is not
due to physical condition, home worries, or to some subtle psycho­
logical attitude which, if discovered, can often be changed. Many
times most valuable light is thrown on a seemingly hopeless situation
by the instructor. It is obviously to the latter’s interest to aid in
reducing the list of quitters, so that he will have more time for thorough
instruction of old workers who are promoted, etc. Every effort is
made to awaken each worker to the value of attaining his full earning
capacity without driving, without coercion, but by a spirit of help­
fulness on the part of all. Many an opportunity offers here to point
out the relation of health and mental attitude and the cultivation of
right habits of work to earning power.
An excellent means of contact with the individual worker is
furnished by our daily absence report. Every absentee is visited
in his home, and cotmtless are the opportunities thus gained for
securing the good feeling and understanding of the home folks, who
are only too often inclined to make, matters worse by ill-timed
sympathy or positive antagonism due to lack of understanding. It
is not necessary to mention the innumerable chances thus presented
for instruction in the care of the sick, in preventive hygiene, and in
other subjects vitally affecting the well-being of the individual. A
fruitful as anything are the intimate friendly chats concerning plain
business dress, the advantage of Rosie’s being allowed to entertain
her friends in the little parlor at home instead of going on the streets
and into the dance halls, and a thousand and one home and business
108021°— 17— Bull. 227------ 10





h ir in g


problems which Rosie’s mother discusses with you, confident in your
genuine interest in her Rosie’s success and advancement.
Concise reports of home visits are sent to the production and
quality foremen in charge of the employees who are absent, and to
the superintendent and general manager, in order that they may
know briefly the cause of absence. If the home visit discloses a
personal grievance on the part of the worker he is asked to return and
“ have it out” with the offending party. We seldom find an em­
ployee unwilling to do this, and we invariably find that the open airing
of grievances is a successful cure. We do not belong to that school of
pacifists who hold that lasting and enduring peace can be secured by
the mere separation of offending parties, and we therefore never
transfer a worker from one section to another for reasons of personal
antipathy. This we believe is a method which only stores up trouble
for the future. We are glad to say that our foremen are the stamp
of men and women who would rather apologize if they owe an apology
than to have a worker transferred to another section still harboring
resentment against anyone in our organization. It is our policy in
cases of all complaints to hear the worker’s side first and then to call
in the foreman or superintendent or fellow worker and have a clear
understanding of both sides before attempting to do any bridging.
Above all, it is obvious that, in all cases of discipline, honest, straight­
forward dealing is the only policy, and the worker justly resents
deeply any attempt to smooth things over without cutting out the
root of the trouble.
It is now so thoroughly accepted ill the Clothcraft Shops that
discipline and discharge are functions of the service department that
both foremen and operators bring their disputes to the department
as a matter of course. No foreman, in truth, wishes to assume the
whole burden when a worker is “ down in the mouth,” or “ up in the
air,” or suffering any of the other maladies to which every human
being is occasionally subject. He is only too glad to have our help
in a ticklish situation. Moreover, an operator or a foreman may be
transferred from one section to another, and the foreman recognizes
fully that it is essential for one department in the factory to have all
the accumulated knowledge of the progress, the faults, and the virtues
of each individual in order to help him intelligently in his personal
contacts. The service department serves, then, as a clearing house
for the knowledge necessary to the proper adjustment of human
It is our aim to have every foreman and every superintendent in
our organization realize that his function is an educational one. The
employment and service department considers discipline to be one of
‘ its main functions, but it never permits entire responsibility in this
field to be shifted to it. I am reminded of the time when one of our



inspection foremen came to the service department in desperation
because he could not impress some of the operators with the magni­
tude of their carelessness. He was given some such ammunition as
this: “ Girls, our trade depends on giving satisfaction to our customers,
and you can not expect to have steady positions unless each one of
you does everything possible to turn out work of satisfactory quality.
It is only good work which brings a demand for our goods.” Still the
foreman begged some one else to do the talking for him, and it was
finally agreed that some one should go along and bolster him up if he
fell down in the points he wished to make. When he had summoned
his operators into the superintendent’s office he said vehemently,
“ Now, girls, this has got to stop. Youse know that we have to satisfy
our customers, and no customer ain’t goin’ to come back if his pants
is stitched crooked.” While the form of expression was not all that
was to be desired, he certainly “ got across,” and the girls went back
to work with a clearer idea of the connection between carelessness
and “ slack time.”
For the training of foremen we offer an apprenticeship course con­
sisting, among other things, of instruction in every operation in the
factory. College graduates, as well as others, have availed them­
selves of this course with the understanding that they are to have no
privileges nor favors extended to them, but are to share the common
lot. They are taken on probation, being started in on a regular
factory job, on the same basis as any other beginner, and their view­
points and capabilities are carefully observed during this probationary
period. Of course workers in the factory who have not had any
degree of formal education but who show promise of ability are given
the same opportunity.
It can not be too much emphasized that the members of a depart­
ment responsible for the hearing of complaints, for recommendations
concerning placing, transfers, and promotions, and for home visiting
and other personal follow-up work can not have too thorough a
knowledge of shop conditions and of what we now term “ the contents
of the job.” A home visit can be twice as effective if the visitor has
even a fair knowledge of the technicalities of the work.
All home-visit reports, telephone messages, and any other informa­
tion concerning absentees is placed on the desk of a member of the
employment and service department at the end of the day’s work in
order that she may have this information at hand when conferring
with people who return to work the next morning. No one who has
been absent is permitted to go to his place of work without first seeing
a member of the employment and service department. “ Tardies”
and absentees are interviewed each morning. Absentees who have
been out on account of sickness are referred to the doctor and nurse
and those who have been out for other reasons are handled as the



occasion demands. This morning interview has the added value of
furnishing an opportunity for a personal expression of sympathy
when the cause of absence requires this and for the discovery of many
chances for service in solving personal problems.
Other normal means of contact with the employees are furnished
by the library, the bank, the dispensary, the teaching of English to
foreign-born employees, and by noon games and recreations. I
think I may safely say that in conjunction with the records of work
these activities furnish us the most valuable means of determining
the fitness of a worker for advancement to positions of responsibility.
It is said that only responsibility itself fits for further responsibility.
It is presumably a common experience of all of us, that we never
know how much we can do until we do it. So it is with each and
every worker. We can see the person who is a natural leader assum­
ing responsibility in starting the noon-hour games, in managing the
shop parties, or in some other activity outside of working hours.
This assumption of responsibility is an evidence of qualities required
in supervisory positions.
The library is a whole chapter in itself. The reading of good
fiction is encouraged because we believe it is one of the greatest
means of furnishing a broader outlook on life and of bringing to
people a sympathetic understanding of their fellow men. Besides
the books of fiction, travel, biography, history, and poetry which are
lent us by the Cleveland Public Library, we have our own ever­
growing collection of books and pamphlets on management and
organization which are being read by an increasing number of our
people. The discussion of a book frequently gives an unexcelled
opportunity for getting close to a worker. Sometimes the most
reticent person will become expressive and responsive under the
stimulus of discussing a book he has enjoyed.
The Clothcraft Penny Bank also furnishes most vital means of
establishing human contacts. Arousing an interest in saving for
some specific purpose, such as a vacation or a new suit of clothes, is
often a step toward a worker’s becoming a regular depositor and
surprising himself with the amount he can lay by for the future.
Six per cent interest is paid as an inducement to save, and when a
worker has accumulated $100 he is asked to transfer his money to
one of the city banks. Anyone who has ever worked with girls
knows how few of them have the opportunity to learn how to spend
or to save. This furnishes us a good pretext for a home visit the
purpose of which is to persuade the parents to allow the daughter to
deposit in the bank all she earns over the base rate of her operation
which is in every case a more than fair wage. Frequently a formerly
unambitious operator when given the incentive of her own bank
account increases her earnings very materially. We have found the



average parent averse to consenting that her daughter pay board, as
this seems to signify too great independence.
Our foreign-born employees are given as much individual attention
and follow up as possible. Long ago we discovered what our Nation
has been only too slow in discovering, that men’s lack of under­
standing of one another is a real menace and that there can be no
understanding without the common currency of language. Some
years ago wTe established classes in English at the factory. During
the past year we have directed those few who still needed further
instruction to the evening schools, making arrangements with the
principals of these schools for a two-night instead of a four-night
a week attendance. This has been closely followed up by sending
post cards each week to the evening schools attended by our people
and obtaining by means of return cards a weekly record of attend­
ance. Our men who were preparing to take out their second papers
attended the citizenship classes in the public libraries. Even this
phase of our work required continuous follow up (chiefly along the
line of recommending books and giving monthly tests) and some
home visiting. For example, Sam B— reported that he could not
go to evening school because his wife would not let him. On visiting
Mrs. B— we found Sam’s story was only too true. Mrs. B— was
distinctly averse to Sam’s learning any more English. She knew
none and got along very well (it was necessary to converse with her
through an interpreter) and what was the use anyway ? After using
all the arguments at our disposal we finally said, “ Well, Sam is
continually having trouble at the factory because he can not speak
English, and he must go to school. That is all there is to it.” Then
with waving of arms and flashing of eyes Mrs. B— poured forth
expostulations, introducing the word "swoboda” in every sentence.
Now “ swoboda” in Bohemian means “ liberty,” so we told the
interpreter that Mrs. B— was the one who was depriving Sam of
his “ swoboda,” not we; that Sam wanted to go to school and she
would not let him. This seemed to bear conviction and Sam was
forthwith permitted to attend evening school, for which concession
on the part of his wife he now claims to be very grateful.
Our dispensary naturally provides more opportunities for dis­
covering and uprooting causes of failure than any other activity of
the employment and service department. Often a worker becomes
temporarily discouraged because of ill health, the reason for which
is, in most cases, ignorance and disregard of the first principles
of hygiene. Women are habitually imprudent in matters affecting
the health, but men and women alike need constant advice and help
in maintaining the human machine, as Dr. Sedgwick so aptly terms
this intricate, complex body of ours, at its full efficiency. I have
spoken of our preliminary physical examination; periodic examina-



tions are equally important. Owing to the nature of our industry
we feel that even small visual defects should have prompt attention.
Our oculist, one of the best in the State, visits us twice a week and
careful follow-up work is done with the aid of our nurse. The dentist
visits the factory once a week, his work consisting of prophylactic
work and examining. He is always willing to furnish estimates and
as his rates are low and his work good many of our employees prefer
him to another dentist, though of course they are free to choose any­
one they please. Our dental work has been of great value in awakening people to the importance of the oare of their teeth. Careful
record is kept of all absences due to sickness which, in addition to
other information medical and personal, aids us in preventive as well ^
as remedial work. Frequently dispensary cases lead us into the
solving of all kinds of intimate, personal problems which are destroy­
ing the mental peace, and, consequently, the bodily health and work­
ing efficiency of the individual.
Games, dancing, choral-club parties, all these and other activities
furnish a splendid method of demonstrating the real fun and the real
value of team play. More than all, activities of this kind are an
organized instrument for the expression of social instinct and the
development of group spirit. Many people regard such things as
fads and fancies in an industrial establishment, but I want to say
that if you could visit one of our parties and see Mike proudly intro­
ducing his wife and children, and Lily shyly nudging you so you will
turn around and “ meet my friend” ; if you could see us dancing
the Bohemian “ psenicka” and the Hungarian “ czardas” and the
Swedish clap dance, whether we are Bohemians or Hungarians or
Swedes or Italians or Americans, and if you could see some staid old
pressers taking part in the circus parade and their wives splitting
their sides at one of the few “ evenings out” they have had all winter,
you would be convinced that we are not only having a “ swell time,”
but we are getting results. We feel that everything which intensi­
fies an interest in life is worth while, that music, good books, and
wholesome fun are both legitimate and profitable.
But there are countless means of obtaining a normal approach to
and a continuous pontact with the individuals of an organization.
For example, weeks before vacation (which is always the first week
of September) we begin to interview people about their plans for
getting out of town. With the cooperation of the Cleveland Vacation
Bureau we are able to find farm houses, camps, and all types of
places in the country and on the lake shore where our people can
have an enjoyable vacation. But, as I have said, the opportunities
for service and for personal contact are innumerable and only the
physical limitation of time defines a boundary to the chances for
developing the individual through all these means of approach.



And by no other means can you adequately “ get under the skins”
of people sufficiently to learn not only their capabilities but their
aims and aspirations.
A careful recording and analysis of all reasons for quitting must be
kept, no quitter being taken off the pay roll without a personal inter­
view with a member of the employment and service department
staff. Such a record is the only tangible measurement of the value
of the work of the employment and service department.
And what is the object of all this follow-up work ? Let me repeat,
it is primarily for the purpose of developing men and women. More
and more are we coming to realize that the justification of industry
lies in the opportunity it offers to men and women to attain not only
material, but mental, moral, and spiritual advancement. And this
can not be secured unless the confidence of the worker is obtained,
unless he develops the right mental attitude toward the organization
for which he is working, including his fellow workers.
But his confidence must be built on right and lasting foundations.
Employment and service departments can follow up until doomsday
with no results unless the management, as a basis for its own success,
has a sincere, genuine interest in furthering the advancement of
workers, and unless it bends every effort toward the establishment
of sound, fair policies which will insure equal opportunity to all.
It is very important to emphasize that the wage problem must be
regarded as fundamental and that this problem must be approached
from the farseeing point of view that high wages are essential to the
interests of firm and employees alike. There must be a definite
system of promotion based on an intelligent classification of opera­
tions which recognizes differences in the valuation of skill and effort
and establishes steps by which a worker can advance from one to
another. There must be steady employment based on intelligent
sales policies, on proper methods of routing work, on the continuous
upkeep of machinery and other equipment, and on other funda­
If the system of an organization is so planned that the distribution
of work depends upon the personal favor of a foreman or clerk, or any
one who may happen to be in charge, if there is no clear and definite
method of keeping track of individual production, if there are all
kinds of opportunities for friction and misunderstandings, due to
chaos and disorder and general bad management, follow-up work
will be a farce. I therefore wish to emphasize that employment work
and follow-up work can not successfully be divorced from the general
and specific policies of organization and management. May I
rephrase an old proverb to read, 1‘A company is Known by the man­
ager it keeps.” When a manager realizes that training must begin
with himself, and that his next duty is to train his superintend­



ents and foremen to breadth of mind and heart, and a genuine
interest in human beings and their development, then, and then
only, can the general follow-up work in an organization legitimately
begin. Furthermore, an employment superintendent must have
inspiration and spirit derived from an all-absorbing sense of duty
toward the community and toward the Nation if he is to recognize
fully his great opportunity for service. He must realize that his
duty is preventive work, that if he is competent to hold his job he
must do his part toward preventing the wholesale waste which has
been inflicted upon employers and employees alike by the senseless
drifting of workers. He must prevent, by close and continuous
contact with his fellow workers and an intelligent and increasingly
sympathetic understanding of their aims and aspirations, the manu­
facture of ‘ ‘unemployables,” who can only too often be laid at the
door of incompetent business management.
[A paper on “ Analyses of reasons for leaving and their use” was
read at this time by Dudley R. Kennedy. This paper is omitted,
as it was not possible to obtain the manuscript.!


I feel that almost the last word has been said about service work
and I am not going to try to improve upon what we all recognize as
the highest principles and ideals of the work.
At our plant we are working along the same broad lines so ably
presented to you by Miss Gilson.
The Eastern Manufacturing Co., of Bangor, Me., is composed of a
pulp and paper mill and an electrochemical plant. There are also a
box shop and woodyard somewhat separate from the other depart­
ments. The mill employs in all 900 people, of whom 600 are men
and 300 women.
Scientific management has been in process of installation in the
Eastern Manufacturing Co. for the last three or four years, and it was
in the summer of 1915 that the need was especially felt for more
personal work with the employees. In October of that year, the
service department was organized.
Our chairman, Mr. Howard, has made the same error in introducing
me that our newspapers in Bangor made when I arrived in town.
The local papers lost no time in explaining to everybody just what we
were going to do in the way of “ social uplift/7 and also published my
name as “ Jane, ” so that by the time I reached the mill I was greeted
by hard suspicious glances and was immediately dubbed “ Sanitary
Jane.77 The first few weeks I spent in what might be called a social
survey of the plant, in becoming somewhat acquainted with the man­
agement and its policies, with the workers, and also, as far as practical,
with the actual operations in the plant. I was expected to carry the
employment as well as other activities, and the first thing for which
I felt the need was a set of record cards for filing purposes. There
were no records of the employees except a list in the paymaster’s
department consisting simply of the workers7 names and numbers.
A standard record form was drawn up and the information secured
by personal interviews with each employee. I interviewed each girl
at her work and in this way not only gathered material for records,
but also came in personal contact with each one. A young man who
was familiar with the men and the mill work was chosen to interview
the men.
In about two months the records were in very good working order,



For several years there had been a visiting doctor for accidents
and a so-called dispensary in charge of the head machinist, who was
very efficient in first-aid work. The dispensary room was rearranged,
the necessary equipment added, and in a few weeks a graduate nurse
was employed.
About the 1st of January the employment was centralized in the
service department, and has been carried on largely in the way that
other employment departments have been conducted, workers being
selected by human judgment, attention to previous work, references,
and perhaps a sprinkling of the other “ 57 varieties” spoken of by
Mr. Scott. One feature seems worth emphasizing, and that is the
close cooperation with department heads who up to this time had
done practically all of this work. Great effort was made to get their
ideas as to the kind of persons needed, and also their opinion of appli­
cants. Being in a small community, many were quite well known.
I made a point of asking the foremen to go over the list of applicants
on file and in a general way to express their opinion as to their qualifi­
cations for different work. This was a great help both in making
them more willing to turn over the employment and also in the
selection of workers.
Care was taken not to employ any boy or girl under 16, and because
of the unusually large number of older people already employed,
older men and women were also not taken. Follow-up work has also
been done systematically and records.kept.
The condition of the girls had up to this time been given very little
attention. Girls were working 10 hours a day for comparatively
small pay and were a sorry looking set. It was no unusual thing for
20 or 30 girls to whirl through the mill and rush into the superin­
tendent’s office demanding whatever came into their heads. They
were too dissatisfied to know what was wrong or how to go about
making things better. The past management had meant well but
had not sensed the situation.
When I arrived scientific management was about to be begun in
this department, and since then the two have gone along together
very successfully.
One of the first and most important matters was the reduction in
working hours from 10 to 9 per day, with a 10 per cent increase in pay.
Early in 1916 a circulating library was opened, books for which
were obtained from the State library free of charge. As the library
was in my office and not very accessible to the mass of the people, we
felt that our circulation of 500 books per month was very good.
Special attention has been given to the use of the library by younger
boys and girls of the neighborhood.
During the first year not much attention was given to recreation
because there were so many more serious things to work out. How­



ever, we had one gymnasium class at the Young Women's Christian
Association in Bangor, and two basket-ball teams.

The first deviation from routine work came with the 1915 Christ­
mas tree, ablaze with colored lights and in view of all the employees
as they came from the mill. Loud shouts were their token of appre­
ciation and the neighborhood children were delighted. This proved
to be really a community tree.
As the work progressed the matters of sanitation and hygiene were
taken up. Attention was paid to ventilation, toilets, lockers, instal­
lation of paper towels, drinking cups, etc., which I will not discuss.
Up to the time of centralizing of employment not much attention
had been given to the personnel— of the women particularly— the
general opinion being that anyone was good enough to work in a
paper mill.

I should like to emphasize one or two things which 'perhaps have
not been done in many places. Last spring a gentleman from the
German-American Button Co. came to see us about distribution
of water through the factory during working hours. I conceived the
idea of distributing milk in some similar way. This seemed worth
while, especially for the girls. As we all know many girls rush
off to work without breakfast, and a bottle of milk during the
morning rest period does mean quite a little nourishment. I had
also noticed the eight-hour-shift men eating lunches during their
working hours. No objection had been made to this custom because
of the necessity for irregular mealtimes for people on eight-hour
For the last eight months certified milk has been sold (one-third
quart bottles and two crackfers for 3 cents) in the finishing room
during the rest period, delivered to the workers in other departments
between 9 and 10 a. m., and sold from the storeroom any time during
the day and night.
Between 450 and 500 bottles are used daily. Two crackers and a
straw go with the milk, and if you were to pass though the finishing
department at 9 o'clock in the morning you might think it a day
Last spring after the snow, which had been on the ground all
winter, had melted, I noticed the dump we had at the entrance to
our grounds. This place had been used for years for old tin cans,
ashes, and other refuse. It was in this condition because it belonged
to our good neighbor, and if thought of at all, had not been con­
sidered our responsibility. Forty loads of rubbish were hauled away
and the rest buried under nice, clean earth. The little brook and cul­
vert were cleaned out, the town wagons and old water tank removed,
the trees trimmed, and grass seed and vines planted. Spaulding
playground apparatus was ordered, but arrived so late in the summer



that organized work in the playground was not attempted. Eight
playground patrols were appointed among the older boys and girls
and they were given metal badges. These children with the assist­
ance of one of the neighborhood women and the service secretary
supervised the playground. More supervision and systematic play­
ground work are planned for the coming year.
When I first arrived at the mill and was known as “ Sanitary
Jane” there was great opposition to any form of physical examination;
in fact, on one occasion 30 angry girls rushed into my office and told
me they were just as clean as I was, that they would not have physical
examination and would not take off their shoes and stockings for
anyone. I agreed with them and said I would not take my shoes
and stockings off for anyone either, and really was just as indignant
as they were. This rather took the wind out of their sails and gave
me the opportunity I needed to explain to them what I had come
for and to kill some of the ridiculous gossip going through the mill.
This all came about through some one in a blundering way trying
to force one girl to come to the service department. This, of course,
should not have been done, and I really felt the girls were right
when they explained how and why they felt as they did. The
necessary adjustment was made with the superintendent and the
girls returned to work.
This shows the necessity and importance of some reasonable
explanation for the introduction of this kind of work into a plant.
Personally, I think a worker should begin as employment manager,
developing other work later.
Since we were unfortunate enough to have aroused this feeling
about physical examinations no effort was made in this direction
until the following fall. The company is now examining all appli­
cants for positions before starting them at work. This is not done
with a view to excluding all but those who are absolutely sound in
health, but as a means of knowing the physical condition of the
employees in order to place them at suitable work and give them
such assistance, advice, and care as will help them to attain or con­
tinue in good health. At this time no opposition is found, and
entrance examinations are considered part of the usual routine. Not
infrequently employees themselves ask to see the doctor. The Life
Extension Institute, of New York City, is in charge of all work
being done along these lines.
One of the most beneficial outgrowths of the service work, in my
opinion, is the organization of the women in the community. In
November, 1916, one of the women from the town came into the
service department for advice as to whether South Brewer needed
and could support a “ charity society.” She and the wife of one
of our foremen were anxious to form some society of this kind, but



needed some encouragement and direction as to organization. As
South Brewer had no systematic relief organization of any kind, and
apparently no civic spirit, it seemed a splendid opportunity to de­
velop something unusually worth while.

A body of 20 women met the next week and the Social Service
League was organized. The methods and records of the Associated
Charities have been followed and the league has been so formed as to
include all kinds of civic improvement work as well. The club now
has 70 members and is composed of the women and men (so far
only the men in public work) of South Brewer. Practically all of
these women are associated in some way with the mill. Besides
helping those in need, the league has made Red Cross supplies and
has sewed for busy mothers.
A Saturday-night dancing class is being conducted by the wives
of four of the mill foremen. This class meets in the new service
department rooms and includes neighborhood boys and girls between
the ages of 14 and 17. There are about 30 members.
The league is also supervising the new service department rooms
during Sunday afternoons from 2 to 5 p. m., when they are thrown
open for the use of the neighborhood people. This large new depart­
ment with attractive girls* and men’s rest rooms, cafeteria, and
hospital rooms is on the third floor of the paper mill, overlooking
the Penobscot River, and has been open about one month.
The C h a ir m a n . We are going to have a paper on the question of
mutual aid associations, in which we are very much interested, by
Mr. W . L. Chandler, Dodge Sales & Manufacturing Co.


The employees’ benefit association is the result of evolution and has
apparently come about through a desire on the part of the men to
cooperate for their mutual benefit.
Capital has but recently awakened to the value of these organiza­
tions in steadying the force and in reducing some of the unmeasured
leaks of business.
No method has as yet been accepted as showing clearly the cost of
absenteeism, or the loss of both quality and quantity of production
due to workmen being harassed by debt incurred through sickness,
or to their dragging themselves around in an effort to fight off disease
without proper medical attention.
The presence of such losses is obvious on most casual consideration
of the subject. Consequently, the only problems are those of measur­
ing the amount of loss and of devising methods of Joss reduction.
We may utilize the employees’ benefit association for the mutual
relief of employees and employer from such conditions. This has
proven one very effective means of reducing some of these newly
recognized leaks.
Some employers for many years have been cooperating with associa­
tions among their employees. However, it is only in the last few
years that capital can claim to have frankly acknowledged the value
to the employer of these associations.
Recently various stock insurance companies have been “ sitting up
and taking notice” of the possibilities for them in this new era which
is developing.
In addition to the increased activity of the companies regularly writ­
ing sick and accident business, some of the larger companies are now
offering group insurance through employers in such forms that pre­
miums are paid to the insurance companies monthly by the employers.
The entire cost is absorbed by some corporations in connection
with their welfare work, while others collect from the employees
through the pay envelopes for part of the premiums.
Some of this group insurance embraces life insurance only. As a
stabilizer of labor, life insurance does not seem to me to embody
enough of the great essentials which attract the men. Any gratuity
receives a welcome, but the money spent by an employer for life in158



surance premiums might be used in other ways to greater advantage
to both employer and employee.
Group, health, and accident insurance is something which can more
readily be visualized by the average man and, as a stabilizer, pro­
duces more favorable results than group life insurance.
The greater the frequency with which a man feels the benefits de­
rived from a gratuity or an investment, the more he will appreciate it.
In an average working force of 1,000 men, seven will die each year.
In such a force, then, the group life insurance plan will demonstrate its
value to the employees less than once a month and then very few
employees hear about the payment of the benefits.
In such a force of 1,000 men some one is always either hurt or sick,
and frequent contact of the individual employee with the disability
benefits is secured either through his being a beneficiary himself, or
because he is serving on sick visiting committees or in other ways sees
benefits going far to relieve his friends in times of need.
Employees’ benefit associations usually operate without much
overhead expense. There is some expense of operation but the em­
ployer usually pays it. He does not always realize it, but he pays it
just the same.
In some few cases the secretary circulates among the members
collecting dues at regular intervals. It is probably safe to conclude
that this is always on company time, resulting in relatively heavy
cost to the employer.
However, in most cases, dues of the members are collected through
the paymaster as an accommodation to the organization. This plan
is far more effective for the association and costs the employer less
than the former method.
Having almost no overhead expense, the association can handle
business practically at cost and in many cases, through having out­
side income, for less than cost.
An employer who is aware of the value to him of having all em­
ployees become members of their benefit association may contribute
toward the cost of maintaining the association and thus foster the
organization operated by the men themselves, but his interest should
not lead him beyond the point of cooperation. The members should
know that they are operating their own association.
An employer’s dollar spent in this way will go much farther than
when part of it must be diverted from payment of losses to cover the
overhead expense of a stock company.
Stock companies have a wonderful field of usefulness, but they are
by force of circumstances unable to compete with the employees’
benefit associations.
No form of insurance will sell itself. In associations operated by
employees without the cooperation of the employers the percentage



of members to total number of employees varies from 2 per cent
upward, the average being about 30 per cent. In cases where the
employers cooperated in managing the associations, the average was
over 60 per cent, and where the employers managed the associa­
tions alone the average was over 75 per cent. This points to one
very important moral, and embraces one of the essential features of
organizing such an association. In addition to that, it shows very
forcefully the need for reorganizing a great many of the associations
now in existence. Consequently, I believe those features which are
essential when organizing will be equally essential when reorganizing
an association.
This was the condition that confronted the Dodge Manufacturing
Co.’s Mutual Relief Association two or three years ago. The asso­
ciation was about to celebrate its twenty-fifth anniversary. The
corporation had maintained the attitude of allowing the employees
an absolutely free rein. Some of our directors felt very strongly on
this subject. The result was that in attempting to allow the em­
ployees to exercise their own judgment without interference from the
corporation, we were, in reality, depriving them of the counsel and
benefits which they might receive from directors and officers. Efforts
had been made for several years to urge the officers of the benefit
association to campaign for new members, and quite a little stimulant
was thus administered. The membership continued, however, with
slight fluctuation, to include between 35 and 50 per cent of the em­
ployees. It seemed quite evident that something was lacking, that
this proposition must be studied just like any other problem of
product, equipment, or labor. We set out to do that, making up a
questionnaire which went to a number of corporations which we
believed might be operating benefit associations. We made nota­
tions of the various problems which suggested themselves, and which
we then set out to solve. It developed that we had 72 problems for
the solution of which we must secure data. We found that the De­
partment of Labor at Washington could give us a great volume of
data from which we were enabled to compile percentages and other
figures to aid in solving these problems. This, together with the
information received in answer to our questionnaire, gave us con­
siderably more data than we had anticipated when we started out.
Statistics themselves avail little in the brief consideration of so
important a subject; suffice it to say that data were secured covering
approximately 600 benefit associations, and copies of the by-laws
were received from 78. We digested the data as best we could.
For convenience in studying the various by-laws, we cut them up,
and where necessary made digerts of the individual provisions; so that
by means of a card file we were able to gather into one group the
various provisions for handling the numerous situations that arise,



such as the duties of officers, amounts of benefits, and administration
problems generally. From this card file we compiled a set of by­
laws which were then submitted to the members of our own associa­
tion, who were asked to appoint a committee to go over the matter
thoroughly; this committee, representing the different departments
in the plant, met on company time one afternoon a week for about
three months, with the result that our present by-laws include what,
to that committee, seemed to be the best features of the 78.
Thus the corporation was of benefit to the association; first, in
securing for them this volume of data that they might reorganize;
second, in being able to show them that above all their plan must be
attractive. The association is in the business of selling insurance;
it must have a proposition which can be readily sold to the em­
ployees.. We were able to show them some of the psychological
features of the proposition, not through a definite study of psychology,
but by bringing them to see the effect on prospective members of
certain methods of procedure. One point that was kept forcibly in
mind continuously, was this—the entire plan of reorganization must
be above suspicion. There must be nothing about it which would
permit the suggestion, by those of perverted mind, that the corpo­
ration had any motive other than the best interests of the employees.
All decisions were to be made by the employees. We took pains to
place before them, however, all of the facts, both for and against each
proposition on which they were to ballot, so that they were benefited
by the experience and judgment of those who had experience in in­
surance matters, sales promotion, and in addition, the facilities for
securing information.
One point stands out forcibly: No matter how good the plan, it
will not sell itself. It must have barbs on it; it must not work too
smoothly. There must be things happening to keep alive the
interest and enthusiasm of all the members. It is not sufficient to
depend upon the secretary or any other one man to secure all of the
members; all employees must be warmed up and kept warm so that
a new man coming into the plant will immediately feel that influence
and want to come in.
Instead of making outright donations to the treasury of such an
association, it is far better to offer bonuses to the members for the
accomplishment of certain definite results. Gratuities never develop
the enthusiasm which follows sustained effort made to reach a certain
goal and to earn a bonus prize.
Convert the campaign for members into a game wherein each
member may become a salesman watching for an opportunity to get a
new employee into the association.
103021°— 17— Bull. 227-------11



The effect of enthusiasm may be seen in the fact that the member­
ship of the association in the plants of the Dodge Manufacturing Co.
doubled in the month following the adoption of the new by-laws.
A number of different stimulants were tried for the effect upon
both members and prospective members, as evidenced by the per­
centage of employees in the organization. Our biggest stimulant so
far has been that of dividends. We brought to the attention of the
board of directors of the employees’ benefit association the fact that
their treasury was increasing very rapidly; that it was unfair to the
members to retain this money when it was not needed by the asso­
ciation; that they could and should declare a dividend equivalent to
two weeks’ dues. There was considerable hesitation, however, for
fear that the soundness of the organization might be jeopardized,
but, upon thorough consideration, and at the recommendation of the
officers of the corporation, they agreed that it looked perfectly safe.
To save bookkeeping, this dividend was declared in cash. Each
member received an envelope containing his dividend and bearing a
message stating that the organization was quite prosperous; hence the
dividend. The amusing part of the experience was that the member­
ship went up about 50 per cent in the next six months, and the initia­
tion fees from this influx of new members put into the treasury more
than the dividend had amounted to. Thus the organization not
only got its money back but increased its membership 50 per cent.
However, the greatest value came out of the fact that after the first
dividend was paid, as a surprise to the members, the solvency and
soundness of the association were most emphatically impressed upon
the minds of all the employees.
Successive dividends seem to be accepted more as a matter of
course. Nevertheless, demonstrations of strength and solvency
must be made at intervals to keep up the enthusiasm. This will
extend the influence of the association into the furthermost corners of
a plant.
As pointed out previously, it is very evident that the management
of such an organization should not be left entirely to the employees.
However, I do not favor a management exclusively of the corpora­
tion. In my opinion, a joint management secures the counsel of
the officers of the corporation and the interest, enthusiasm, and
experience of the employees; thus the organization is operated for the
best interests and secures the greatest enthusiasm of all concerned.
The average executive, being of the individualistic type, does not
clearly comprehend the viewpoint of the general employee who is of
the collectivistic type. In my opinion, the joint plan of management
is by far the best solution.
To revert to the discussion of ways and means of the employees’
benefit association in general, some by-laws of other organizations



provide that one-half of the board of directors must be appointed by
the corporation; the other half, by the employees. I believe it would
be better to provide that “ not more than one-half of the board of
directors shall be appointed from the corporation officers.” In fact,
I prefer to say nothing about this phase of the matter, allowing the
entire situation to rest upon its merits. The men will be very quick
to know who among the officers of the corporation are with them and
competent to advise them; and it will be noticeable that there will
be no attempt on the part of the men to “ railroad” anything through,
provided that the corporation officers who take an interest in the
work come clean with them and keep their ear to the ground.
Some one to act as an actuary should prove valuable in keeping an
association on a sound basis. One familiar with insurance problems,
who is interested in piloting the organization, may well be selected
and held responsible to the association for the business policy. Such
a man may be found among the executives of the corporation.
Another extremely important individual is the secretary. He
should be elected by popular vote and, like the actuary, should be
recognized primarily as representing the interests of members.
The employer may indicate a willingness that these men devote
the necessary time to association activities, but the final choice of
individuals should rest with the members.
One thing that struck me very forcibly is the desirability of volun­
tary membership. I found by investigation that in some of the
organizations where membership is compulsory for employees, in­
terest is absolutely lacking. The officers of such an association
very soon become dictatorial in their attitude, and so far as I have
been able to observe the members in most of these organizations look
upon membership as a burden which they must carry in order to hold
their jobs. Thus the value to the corporation is absolutely lost, and
while it has a value for the members, they can not see it, and there­
fore it ceases to exist for them. There may be some compulsory
organizations that are not subject to this criticism, but I have my
A chart was made showing the changes in five-year age groups
resulting from the influx of new members after the reorganization of
the association in. the plants of the Dodge .Manufacturing Co.
No old members dropped out but the new ones were of lower ages.
This decreased the average age. Where the peak of the membership
curve had been at 41 to 45 years, it moved down to 21 to 25.
It is generally considered that sickness may be greater among the
higher than among the lower ages. A set of charts is now being pre­
pared, which will show for the various age groups the relation between
membership and the number of days off due to sickness or accident



and the number of cases of each. Indicatipns lead to the conclusion
that some of my* previous ideas may be upset.
An important feature is that of ‘ *waiting time. ’ ’ Charts which I have
prepared on this point show that the majority of disability cases are
of short duration. The cases of six days' duration form 16 per cent
of the total cases of more than three days’ disability. I believe that
it would not be feasible to pay benefits for disability of less than
three days; first, because of the high cost; and second, because an
employee who is at all provident will have no difficulty in financing
himself for a three days’ sickness.
Much discussion was given to the matter of the total amount of
disability for which the employees’ benefit association should pay.
The most popular selection was 13 weeks. Some associations pay
for 26 weeks, while others have different provisions. As an illus­
tration of some of the features developed by charts I have prepared,
we will assume uniform dues of 10 cents per week for sick benefits.
With three days’ waiting time, it is possible to pay benefits of $1
per day for 13 weeks. If the waiting time were increased to seven
days, the benefits could be increased to 19 weeks without any change
in the dues. If the waiting time were made 13 days, as in most com­
pensation laws, the benefits could be paid for 26 weeks. This shows
the effect of waiting time and the relation between waiting time and
the duration of cases.
Many employees’ benefit associations provide what might be called
“ step-down” benefits, that is, $1 a day for the first 13 weeks; 75
cents a day for the next 13 weeks; 50 cents a day for the next 13
weeks, and 25 cents a day for the balance of the 12 months. Others
pay small benefits as long as one lives and continues disabled.
I have prepared a number of very interesting charts on these bene­
fits and rates. For example, step-down benefits throughout 52
weeks, mentioned above, of $1, 75 cents, 50 cents, and 25 cents,
would require dues of a trifle less than 14 cents per week per member;
other combinations in about that proportion. If it was desired to
extend these benefits as long as disability continued, it would be
necessary to add only 2 cents per week per member. These rates
are based on a factor of safety of one-third. In other words, experi­
ence should not exceed two-thirds of the rate. This, however, is a
necessary provision due to the fact that the statistics from which
these rates were made are taken from the Dodge employees’ benefit
association, and checked up against the rather crude figures com­
piled from the statistics of 600 organizations. They appear to be
perfectly safe. I very much favor the step-down benefits, but ex­
perience has shown that it is difficult to bring the employees to
realize the advantage of providing for a long-time sickness. They



are all so cocksure that continued sickness will be experienced only
by the other fellow.
There are two methods of collecting revenue. One plan is by
levying assessments. Psychologically, assessments are wrong, dead
wrong. It is true that no matter how you collect the money, the
amount needed is essentially the same, but to the average mind, an
assessment plan seems to be always working overtime. The men
imagine that they are paying twice the amount that is really being
collected, and that the assessments come twice as often as the facts
really show. Regular dues at regular intervals are much more satis­
factory from every standpoint. A member knows months in ad­
vance just how much his dues are to be, and when they are to be
collected. Therefore, he is never surprised when they are deducted
from his pay. In settling upon regular dues, it is naturally necessary
to make these dues sufficiently large to take care of the fluctuations
in benefits in order that the treasury may be kept intact, and the
need for assessments eliminated. Experience shows that the fluctu­
ations in benefits are not extreme; and with a fair-sized treasury,
the Organization is able to navigate successfully with dues very
slightly in excess of average requirements.
The question of dues appears to be a difficult problem, but in
reality is comparatively simple when one has access to the charts
prepared on the subject. The logical method is first to settle upon
the benefits that are to be paid, and then compute the necessary
dues to secure these benefits. It makes a big difference whether all
members pay the same dues, or whether one member may select
benefits that suit him and pay dues accordingly. For instance, the
dues above quoted for step-down benefits are based upon a plan
whereby all members of the employees' benefit association pay
the same dues, or, in a large organization, at least enough of the
members pay dues on a uniform plan to provide a satisfactory average
experience. Stock companies writing sick and accident insurance
policies find a policy paying $1 a day benefits with a premium of
$1 a month a ready seller. This furnishes us a guide by which to
work, although I have found it operates better to quote rates in
terms of weeks. The amounts look smaller, and the average em­
ployee is in the habit of thinking in terms of his weekly wage. It
is, therefore, desirable to employ a language which he can readily
understand. Ten cents a week seems to be quite popular, although
our experience shows conclusively that the men do not hesitate to
pay for anything in which they see value.
Another extremely desirable feature of this organization is that,
according to the by-laws, the organization may do anything to pro­
mote the general welfare of its members. Under this provision,
the association organized the Thrift Club. In this Thrift Club any



employee may authorize the association to deduct from his weekly
pay any multiple of 25 cent3. This must be left in the association
treasury for at least 14 weeks; if left 26 weeks or more, it will draw
4 per cent interest. This interest, like the dividends, for psychological
reasons, is paid in cash and not credited to the account. This acts
not only for the employee’s benefit, but as the following incidents
will show, is of great value to the organization. When this Thrift
Club was first started, the secretary of the employees’ benefit asso­
ciation made it a point to visit all of the spendthrifts throughout the
plant, making a special campaign with them first. Man after man
declared, “ If the company will raise my pay, I will be glad to go into
it, but I can’t live on my present wage, let alone allowing you to
deduct anything for your Thrift Club.” Each of these fellows was
appealed to further; he was urged to allow 25 cents to be deducted
from his weekly pay on the grounds that the secretary wanted the
moral effect of his name to influence other fellows who needed the
benefit of such a plan. All of these said that they believed in the
plan, and were finally induced to lend their influence that way. As
the weeks progressed, the secretary made it a point to see these
fellows whose wages were “ inadequate” and casually impressed
them with the fact that this amount was climbing. This, coupled
with the thought that they had induced so many others to join the
Thrift Club, brought about the result that they volunteered to
double the amounts, until within 10 weeks not one of them was
saving less than $2 a week, some as high as $10. Before the 14
weeks are up for any Thrift Club member, the secretary makes it a
point to see him and ascertain what he proposes to do with his money
when he gets it. One of the fellows who had been most decided in
the contention that he could not live on his wage, said that he was
going to have something that he had never before had in his life,
and that was a bank account. Another fellow said that he had been
married for 15 years and had been head over heels in debt all
that time, that he was going to spend $15 of his savings for new
clothes for his family, and that the balance would pay “ every debt
he had on earth,” so that by continuing in the Thrift Club he would
be able to “ look everybody square in. the eye,” and keep out of
debt in the future.
The corporation benefits in all of this from the very valuable fact
that these men who formerly considered their wages inadequate
have demonstrated to their satisfaction that it was not inadequacy
but carelessness that had prevented them from saving money.

One case is interesting. One member had accumulated $50;. his
14 weeks were not yet up, but his wife was operated upon, and the
doctor’s bill was $64. The doctor told him that if he would “ scare
up” the cash right away, he would make it $50. He came to the


secretary almost breathless to see if he could get his $50.
gladly given him, and he saved $i4.

It was

The boys are saving through this means to get married, for winter
clothing, for coal, and for all sorts of things they want and need,
including, in one case, a Ford. The man who saved for the Ford
is the warmest booster we have.
A man who is proud of the employees’ benefit association or of
the Thrift Club, or baseball team, or band, must unconsciously have
a good regard for the plant and organization behind it; which,
barring irritants of some form to disturb' the situation, will build
for a low labor turnover.
The C h a ir m a n : N o w we will have the pleasure of hearing from
Mr. Jackson, vice president of the Philadelphia Association for the
Discussion of Employment Problems.


The term “ mutual aid association” is most frequently used as refer­
ring to organizations formed within a plant where employees join
together to accomplish an object which is for general welfare and which
can be more efficiently carried on than by working through outside
agencies. The activities in which they may successfully work have'
varied widely in different organizations and what may be markedly
successful in one instance will be a total failure in another, due to
differing local conditions and sentiments. It is sometimes found
that several lines of work can be successfully carried on by one asso­
ciation, but I believe that the plan of having separate associations
to carry on distinctly different iines of work has been found the most
feasible one.
Some of the activities in which mutual aid associations have
succeeded are—
Sick and death benefit associations.
Cooperative saving funds, and
Building and loan associations.
Athletic associations for the promotion of health.
Musical associations for self-improvement, including choral,
orchestra, and band organizations.
Literary clubs, sometimes with library equipment.
Cooperative lunch rooms.
Cooperative buying of home supplies.
The mutual aid associations of our organization I shall outline in
the order of their formation.

The relief association for the payment of sick and death benefits
was organized January, 1880. At that time a small group of em­
ployees banded together for mutual help in case of sickness. The
plan was early brought to the attention of the firm, who expressed
a desire to help in the work, and so successfully was the plan of
organization drawn that it has remained without fundamental
change to the present day.
The administration of the affairs of the association has been
entirely in the hands of officers elected by the members. The sec­
retary and treasurer have been the only paid officers.



The visiting of the sick has been carried on by appointees from
the membership, and this friendly call from a fellow worker has been
a very valuable feature in creating a spirit of cooperation.
Benefits of $5 per week are paid, in case of sickness, for a period
not exceeding 15 weeks in any one year, and $100 is paid on the
death of a member. An emergency fund has also been created to
be drawn upon, at. the discretion of the board of managers, for
urgent cases not provided for by the regular plan and for cases of
prolonged sickness which justify extended aid.
Contributions from the firm supply about 50 per cent of the funds;
the balance is raised by assessment of 25 cents per member, usually
one assessment per month, but the cost per member per year has
varied from $1.25 in 1883 to $5.25 per member in 1897, the average
for 37 years being $3.10 per year.
The average payment on account of sickness has been $4.82 per
member per year or less than an average of one week’s benefits per
The average mortality has been about nine per annum per thousand
This has be*en carried on without requiring a medical examination
for admission to membership. Any employee from 16 to 60 years of
age and of good average health is admitted to membership, and
members are eligible to benefits after two months.
The distribution of more than a quarter of a million dollars in
benefits by this association carries its own message and leaves no
need of comment from me as to the usefulness of such work.

About three years after the relief association had been put in
operation (1883) a number of the employees conceived the idea of
cooperating to encourage systematic saving. From one of the original
members I have the following:
A member of the firm, being asked his opinion of the plan, said
that he thought it very excellent, but he did not see where they
could help, as it was a matter for the employees to do with what was
their own as they might decide.
“ Very true,” it was said, “ but you could care for the moneys for
us and perhaps you could allow us some interest on them.”
This was readily agreed to and a plan was formed for a saving fund
association. The plan is somewhat similar to the building and loan
association plan.
Collections are made weekly and deposited with the firm, who allow
legal interest thereon. At the end of the year the profits are divided
among those shareholders who have continued throughout the year.



A shareholder may discontinue during the year and withdraw the
amount deposited, but without profit.

The object is especially to encourage saving by the young and those
who can lay aside only a small sum each week; so the payments were
fixed as low as 25 cents per week, with a limit of $5 per week, to care
for those moderate savings. To many of you this may seem like a
very small and slow accumulation, but I assure, you it has been the
beginning of some very substantial savings. At the end of each year
when the amount is distributed there is opportunity for members to
deposit in a special permanent fund where the money can remain and
draw interest from year to year. While the association has paid to
its members a rate of profit more than twice that usually allowed by
savings banks, yet by far the most valuable feature is the spirit of
thrift inculcated and the strengthening of the self-respect in those
who systematically plan for their financial independence.
It will be noticed that these associations are conducted entirely by
officers elected by the members. Where matters of policy are con­
cerned there is consultation with the store management and with
members of the firm, thus establishing a community of interest, but
the administration of the affairs is in the hands of the officers, who
assume full responsibility.

The years of the early eighties seem to have been prolific in the
formation of cooperative store organizations. At that time the origi­
nal Strawbridge & Clothier Chorus was organized, and for a num­
ber of years it continued its rehearsals and gave several public con­
certs in this city.
The work of the chorus, however, was intermittent for several
years, but with the approach of the twenty-fifth anniversary of the
Strawbridge & Clothier Relief Association some suitable method of
celebrating that event was discussed, which resulted in a reorganiza­
tion of the chorus and the preparation for a public concert to be given
at the Academy of Music. This was given early in 1905. So suc­
cessful was this event that there was a demand for its repetition at
Willow Grove, in June of that year, and from that time to the present
it has been the -rule to give two public concerts each year, one at the
largest auditorium the city affords and the other at the music pavilion
at Willow Grove. In addition to this a number of concerts, to which
the public were invited, have been given within the store at Christmas
and at Easter time.
The 150 or more members of the chorus are recruited entirely from
within the store force, and the director of the chorus is also the gen­
eral manager of the store, Dr. Herbert J. Tily, on whom was conferred



the degree of doctor of music in honor of his work in this and other
musical lines.
The chorus meets regularly for rehearsals of one and one-half hours
once a week for six or seven months of the year. This regular appli­
cation, with the determination to produce a high-class musical work,
is counted well worth while by those who are so fortunate as to be
members of the chorus, and the associations which come to them by
reason of this, both from within and without the store, are among
the very pleasant features of their lives.

Another one of our musical organizations is the Strawbridge &
Clothier Orchestra. This has maintained its organization for a num­
ber of years, meets regularly for practice, and is always ready to par­
ticipate in organization meetings held within the store and also at
times, in cooperation, in other outside events.

Nearly 10 years ago an organization was formed among the girls
of the store for very brief classes to be held on their own time during
the noon hours. This was arranged to cover educational as well as
industrial features. Teachers were recruited from among the store
force, and about 30 minutes were devoted twice a week to mutual im­
provement. Classes were formed in English, French, German, elo­
cution, Bible history, current events, and piano; also, classes in plain
sewing, millinery, embroidery, and crochet.
Once a year it has been customary to hold an exhibit of the work
done in these classes; also, entertainments have been given at various
times by the members. As many as 300 girls have been members of
the club, and the work, as evidenced by their exhibits and by the en­
tertainments given, has been highly creditable.



The form of organization of the pension fund is based upon the
principle of cooperation between the employer and the employed and
the recognition of the necessity of making provisions for those who
nptay become incapacitated after long years of service.
It was believed that the element of mutuality was necessary to
insure the successful operation of such a fund, and that some por­
tion of it should be directly contributed by the members. The dues,
however, were fixed at a very low sum, so as not to be a burden to
anyone, the directors believing that the accumulation of these small
amounts, together with contributions from the firm, would insure a
sufficient principal sum, the income from which could be applied to
the payment of pensions.



Every employee over 20 years of age automatically becomes a mem­
ber of the pension fund after six months of service. The dues are 15
cents per month.
The principal sum to be raised before any of the income could be
applicable for pensions was fixed at $50,000. This seemed like a very
remote possibility with the small amount of dues required, but within
five years the principal had been raised, and a plan for paying pen­
sions, based upon term of service and salary received during the last
10 years of service, was put into operation. It has not been neces­
sary to apply all of the income to meet the payments, and the princi­
pal sum is being steadily increased, in order to meet the heavier
charges which must necessarily come with the increasing number
who will retire by reason of the age limit.

We believe that the group of employees’ mutual benefit associa­
tions would be incomplete without an athletic association. The tonic
of outdoor life and sports is one that can not be secured in any other
way. The cooperation of a large number of people from the same
organization and the healthy rivalry which is sure to be engendered
by outdoor sports must make for personal as well as organization
The Strawbridge & Clothier Athletic Association had a very small
beginning. For several years a number of the executives made a
practice of going to a near-by country club after business hours for
friendly games of baseball and tennis.
The interest increased to such an extent that later the firm felt
justified in acquiring a suitable property, covering an entire city
block, where a baseball field, running track, tennis courts, and other
outdoor features were fully provided.
This was placed at the disposal of the athletic association, which
was to organize and take charge of the sports. The annual dues are
$1 for men and 50 cents for women. The membership has been in
excess of 1,700, w~ho for this small sum are entitled not only to all
the athletic privileges, but to attendance at all baseball games
played on Saturday during the summer season.
Games are played by the athletic association team with the best
class of teams from colleges and industrial and mercantile institu­
tions. They have a large following from the section of the city where
the field is located, frequently drawing 3,000 people to a game.


The C h a ir m a n . A s each of the speakers wants at least 55 minutes
or an hour, the chairman does not propose to take any time of the
audience with any remarks 011 his own part. The first speaker on the
program is Mr. Williams'.


I wish to speak to-night of the need of an employment department
from the standpoint of the average employer; and, to make myself
entirely clear, I wish to point out conditions as they existed in our
factory, and it is safe to presume, in the average factory.
First, I want to state that our firm is over 60 years old, and has
built up a reputation for making high-quality tools during all of that
This is not intended as an advertising statement but is to give
you some idea of the class of work we do, the problems we must
solve, and, further, to make you feel that our employees, producing
such work, must be at least of average intelligence, so that you will
understand that the problems we met were not due to the fact that
we had a lot of underpaid, ignorant employees. In other words, our
problems are about the same as .the problems you have in your own
I also want to impress upon you the fact that while we are 60 years
old, we are also 60 years young.
I am the oldest man in the executive department of our organiza­
tion, and I am not much over 40 years old.
We have the reputation of being progressive along all lines of execu­
tive control and have established a record for efficiency along general
factory lines.
We have technical graduates who have been employed in our
various departments to keep us fully abreast of the times in all
branches of research work, especially in the development of steel.
We have a cost system in our factory that was installed at the
expense of thousands of dollars and is, to my mind, the most efficient




I have ever seen because it produces results and presents them to us
These points are brought out so that you will realize that we are not
held back by any “ old fogy” ideas on the part of our executives,
and to bring home to you the appalling fact that in an organization
such as ours, striving to be up to date, it has only been within the
past few years that we have fully realized what a terrible drain
excessive labor turnover makes on the pocketbook of the employer.

You have been instructed during the past two years by various
speakers, authorities in their line, as to the cost of labor turnover,
and I believe the fact is firmly fixed in your minds that there is such
a cost, but as the statement of such cost has been so general you are
more or less skeptical as to the actual amount involved.
I therefore propose to tell you about one of our departments and
will consider only the actual cost to us of bringing a man in off the
streets, placing him in a position that is only semiskilled, in fact,
in such a position that with average intelligence a man becomes an
effective worker in 12 weeks.
The department in question is run on a piecework basis and we
have a plan whereby we pay each workman a day rate, in addition
to a piece rate, until such time as he becomes efficient enough to
earn a fair week’s salary, which in this department is about 6 weeks,
although to reach the full pay of an expert worker takes 12 weeks.
Our basis is as follows:
First week we pay 30 cents per hour flat.
Second week we pay 20 cents per hour and in addition pay for
all production he turns out on the basis of regular piece rates
for such production.
Third week we pay 15 cents per hour on the same basis.
Fourth week we pay 12 cents per hour on the same basis.
Fifth week we pay 8 cents per hour on the same basis.
Sixth week we pay 5 cents per hour on the same basis.
At the end of that time the man should be self-supporting. We
credit this man with all work turned out, and yet our records show
that such a man costs us, in excess daywork charges, the sum of $42.
This, however, is only part of the cost, as in this particular depart­
ment the overhead expense is 130 per cent, or for every dollar we
pay in actual productive labor we pay $1.30 for unproductive ex­
pense, such as foreman’s wages, instructors’ wages, inspectors’ wages,
power, heat, and light, repairs to machinery and fixtures (belts, shaft­
ing, benches, frames, etc.), oils,grease and kindred items, and expense
materials that have no connection with the actual material in the
tools, such as emery, grindstone, files, hand tools, etc.



This brings into the question the loss to any employer that is not
realized, because it does not appear in the pay envelope, but is hid­
den in the cost of doing business and is assumed to be a necessary
evil in the expense of conducting such a business.
This is mighty hard to express in terms of dollars and cents, but
from our records I believe I have found a way to make it clear to
you. In this department a skilled employee makes $24 per week and
(on the basis of unproductive factory expense of 130 per cent) it
costs $31.20 additional expense for his production. Our records show
that a new man will have an average earning power of only $10 per
week over a period of the first six weeks. Please notice that for each
skilled man who turns out $24 worth of productive work per week
we have an overhead expense of $31.20 in this department. Now,
for this $31.20 we secure from a skilled worker a certain number of
pieces of productive work represented by his earnings of $24 per
week. From a new man the average for six weeks is less than onehalf the work turned out by a skilled worker, as shown by his average
earnings of $10 per week.
It is not fair to say that this man turning out only $10 of productive
labor will cost us as much in unproductive factory expense as the man
who turns out $24 of productive labor, but there are certain charges
that must be assumed that can properly be figured on the basis of
a man charge rather than a charge to a unit of production. The only
credit the new man would have would be in expense materials, that
is, materials such as emery, grindstones, and kindred items, where
the greater the production the greater the consumption of such ex­
pense materials should be. This is based on the assumption that the
learner will not use more of such expense materials in proportion
than the experienced man, although it is a well-known fact that this
is not correct. A learner always uses more expense material per unit
of production than an experienced man.
In this department the factory expense materials are 50 per cent
of the total factory expense charges, and in our figures we are going
to disregard any excess charge for the extra amount of materials used
by the inexperienced men. This, however, leaves us with 50 per cent
of the unproductive expense of $31.20 which we pay for the $24 pro­
duction of the experienced man, or $15.60, which we must charge to
the $10 production of the new man. This charge of $15.60 covers only
such expense as foreman's, instructors' and inspectors' wages, power,
heat, and light, repairs of all kinds, etc., or such expenses as must
be assumed by the man unit no matter what his production is. In
other words, it costs as much in such expenses for the $10 production
as it does for the $24 production.
On the basis of an expense of $15.60 for a $10 production, the per­
centage is 156 per cent instead of 130 per cent we pay for the $24



production, or a net excess cost to us of 26 per cent, or $2.60 per
week, or for six weeks an excess of $15.60.
During the following six weeks which complete the 12 weeks we
figure are necessary to produce an experienced man, this excess cost
becomes less due to increased production, but if we cut it in half, it
is six weeks at $1.30, or a tptal of $7.80.
These three amounts total an excess cost to us of $65.40 to break
in a new man in this one department.
These figures are based on the assumption that every man we hire
stays with us long enough to become an experienced man, but our
records show that we hire six men for this one job before we obtain
one who stays with us long enough to become skilled.
If we added to the $65.40 the actual cost of breaking in and train­
ing the five men who do not stay, the final cost to us of replacing an
experienced man with a green man whom we have to train would be
so much higher as to be staggering. As a matter of fact, our records
of total excess cost in this department, not analyzed as I have done
but taken in bulk and divided by the number of men trained over a
given period, show the final cost to us per experienced man to be
over $100.
In this analysis I have purposely left out of consideration all ex­
penses such as interviewing and hiring men, loss in defective work,
and have charged nothing for money invested in equipment which
we lose on account of low production. You may not have the same
plan of payment, but by taking any plan you have and figuring in
all collateral charges such as we have ignored, you will find that the
average of $40 per man, mentioned by various authorities, is ex­
tremely low.
This, cost is brought out to show you how great the reward is if
you can by any method reduce your labor turnover.

The work of this association opened our eyes to the importance of
a better system of hiring and firing men. Our system heretofore had
been the lack of system used by the average employer. When we
needed men our foremen hired what men they could get through
their friends, and the balance were picked up in the early morning
from the floaters found at the door of every factory daily, and it is
hard to conceive of a more undesirable source of supply.
This method is so bad in its results that I do not intend to dwell
upon it but will relate actual occurrences that crystallized our ideas
as to starting an employment department. We heard one of our fore­
men interview an applicant one day when our need of men was urgent,
and the way he handled him opened our eyes as to the possibilities
for evil under such a system.



We had at that time, when labor was plentiful, a scheme of partial
remuneration, different from that outlined above. When the fore­
man appeared on the scene, after the man had been waiting almost
an hour, he approached him with a belligerent attitude, with—
“ Do you want a job ?”
The answer was “ yes,” and an inquiry as to the kind of work.
This was answered in a monosyllable, and then the applicant asked
what the job paid.
With no attempt to explain the method of remuneration the
applicant was informed that we started men in and they could make
15 cents an hour but would soon learn and get more money.
The applicant said, “ I could not work for 15 cents an hour.”
The foreman snarled, “ Hell! You don’t want work,” and left the
applicant standing in the hallway, with a blank look on his face.
At about the same period we advertised for men, and our office was
filled daily in the early morning, and when the foremen had grabbed
off as many as they needed in point of numbers, they paid no atten­
tion to the balance, but instructed an office boy to tell the applicants
that all jobs were filled.
One day we received a letter from a workman who had noticed the
advertisement, and wrote relating his experience in answering a
previous advertisement from our factory. He stated that he did not
want to try it again. He pointed out the fact that he had spent an
hour and a half in the early morning to get to the factory, at a cost of
20 cents, a loss of an hour in waiting at the factory, and the fact that
he had eventually been dismissed by an office boy with no opportunity
to see an executive.
He was exceedingly bitter and deservedly so. We wrote him a
personal letter, apologized for such a condition, and promised him it
would never occur again to any applicant and I don’t believe it
ever has.
The injustice of such a method, coupled with the ruinous effect it
must have on our reputation* made such an impression that the whole
subject was taken up with the board of directors, and it was finally
decided to create an employment department.

When we had definitely decided to create this department, we
knew that we had to make haste slowly, but that there were certain
definite lines of policy that must be laid down at the beginning.
The first step was the selection of the heads of the department.
We finally decided that it must be in the hands of men with
knowledge of our factory processes, men big enough to analyze con1030210— 17— Bull. 227------ 12



ditions, and important enough in position to have at all times access
to, and the hearty cooperation of our executives, as we realized that
employment problem studies would eventually lead to numerous
changes in shop conditions.
We finally placed entire charge in the hands of our assistant super­
intendent, Mr. Wm. D. Plumb, together with our controller and
cost accountant, Mr. James A. Mellon. The reason we selected these
men was that we figured that the job had two sides. Yfe selected
our assistant superintendent because he was constantly in personal
touch with the men throughout the factory, was also through his
daily routine familiar with shop conditions, and in the best of positions
to investigate complaints at first hand. We selected the head of the
cost department, as this department was to be linked up with the
employment department and was to keep all records necessary to
take care of the information needed for a successful solution of our
employment problems. The cost department in our organization is
cold blooded as to figures, and we wanted them to show what progress
we were making in dollars and cents and at the same time to act as a
check on any proposed expenditure suggested by the employment
department that did not promise to bring results in dollars and cents.
The question of taking from the foremen the authority to hire and
fire workmen was carefully considered, but not definitely decided in
advance, as it seemed such a serious problem.
We finally called a conference of our officers, the new employment
managers whom we had selected, and our two superintendents, to
discuss fully all questions connected with the establishment of the
There was very little discussion as to matters of general policy,
until we approached the question of taking the hiring and firing out
of the hands of the foremen. Both of our superintendents were
opposed to doing this, and while they granted that we could possibly
solve the hiring part, they saw great obstacles in the way of taking
from the foremen the authority to fire men. The greatest objection
was raised on their honest conviction that taking this authority away
would weaken the foremen in the eyes of the men, and break down
all discipline.
We argued the matter for some time, raising hypothetical questions
of what could happen in a department where it would be necessary
for a foreman to exert his authority at once, or lose his hold on his
workmen. All cases were met with logical answers covering all
points brought up as far as we could foresee them, and we all finally
agreed that the advantages far outweighed the disadvantages, and
the employment department was created with the full consent of all
concerned. The work of the new department was outlined as follows:



M e m o r a n d u m , M a r c h 3 0 ,1 9 1 6 .
(1) The employment department is to examine and hire men. Requisitions
for men from various departments are to be sent to the employment department by
the foremen. From these requisitions the department is to get men to fill positions by
advertising or from other sources of supply which it will be necessary for the depart­
ment to create.
(2) The employment manager is to watch the men after they are employed, keeping
records of the work, and to see that the employee is brought up to the standard of the
department, one thought being that we should adopt an efficiency schedule, and if any
man can not make good in the time set for him he will either be discharged, or, if he
shows any adaptability for other work, placed in another department.
(3) After some discussion the general thought of the conference was that employees
could neither quit nor be discharged without the signature of the employment manager.
This would enable the employment manager to find out causes for men leaving, and
while he might not be able to retain the men it would show him our weakness if any
existed and enable him to eradicate it with future employees. The signature of the
employment manager on the discharge slip of an employee would likewise make
foremen more careful as to recommending the discharge of a man without a just cause.
(4) The employment department would keep records of absences of employees,
general efficiency, and all items of this kind bearing on a man’s value to the plant.
This will be worked out by this department and is entirely in their hands.
(5) It was definitely decided that requisitions for employees presented by foremen
must be O. K .’d by the superintendent in order to keep him in touch with the general


We at that time had nothing but an application blank on which to
start, and no place except the hallway of the main office to interview
applicants, but nevertheless we put the plan into effect at once and
notified the foremen of the new procedure.
Considering the effect of such a change to the foremen it was ac­
cepted with a better spirit than we expected.
From the foreman’s standpoint he was giving up a great deal more
than we perhaps realized. He had been accustomed to an auto­
cratic control of his department and he was rendered homage by his
acquaintances through being the man who could place them in posi­
tions when he so willed it. Adulation is incense to most men, and
our foremen were no exception. Suffice it to say at this point, how­
ever, that we have never had any real friction with the foremen on
either point.
One of the first benefits we derived was in freeing the foremen
from the daily necessity of looking over men they needed at the
factory door. Under the old system, the first hour of each morn­
ing, and the most critical hour from a departmental standpoint,
was signalized by the absence of foremen from their depart­
ments. The new system automatically changed this, and foremen
were free to supervise work in their own departments, rather than
lose hours daily in interviewing applicants for work. This has
worked out so well in actual practice that I question if we have in



our organization to-day a foreman who would go back to the old
method of hiring, and we unquestionably would not.
In addition to lost time, which can be more profitably spent in
their own work, foremen as a class have not a broad enough view­
point to select men dispassionately, nor have they the opportunity
to select them. Quite often you will find, on account of the foremen,
cliques built up within a department, due to nationality, creed, or
secret societies. This is not always intentional, but is created because
the foreman draws from his only source of supply, viz, his own friends
and associates.
As to the firing end of the proposition there are many arguments
against leaving this power with the foremen, but the following seems
to my mind pertinent enough to point out the weakness of the prac­
tice, viz, factory managers check up their foremen on all material
they use; watch them to see that the machinery is in good condition,
and save every penny they can by careful supervision; but when it
comes to firing men, they give the foremen full sway, because the
potential value of $50 to $100 invested in that man is not shown in
hard cash and is therefore overlooked.
The employment department found right at the start that they
were handicapped by lack of facilities for interviewing applicants,
and it was definitely decided that we should build an employment
office for the purpose of housing the new department. Their pre­
liminary studies had convinced the managers that valuable space
was taken up by lockers and departmental wash-room facilities, so
the suggestion was made that we combine with the building for the
employment department a service building for the men, with sanitary
lockers for each individual, good wash-room facilities and shower
baths. This was done, and the building has been in service since
July, 1916, and has undoubtedly had a great moral as well as physical
effect on our workmen, in addition to the valuable and much-needed
space which it has released for greater productive capacity in several
It was soon apparent that it was necessary to keep a system of
records of each individual from the time he made his application
until the time he left our employ for any reason, and time and study
have brought into daily use the forms herewith, which I shall try to
make clear to you.
The following are a set of forms which we find necessary to use in
our work. They are placed in order so that you can follow my
Requisition for help.—Sent to employment department signed by
foreman. On reverse side we have printed a new employee slip,
which gives a record of the man sent to fill the requisition.




Always use this form when in need of help and whenever possible notify Em ploym ent
Department one week ahead.
.............................?{{«•........................ 1917.

Em ploym ent Dept.:
Please em ploy for Dept.








with the following qualities: Some experience if possible or strong, sober man.

K ind of work wanted for: Polishing.
Chances of advancem ent: Piece work.

Wages to start: N ew rates.

W hen needed: A t once.

Steady or tem porary work : Steady.

John M cM ullin



Form I

Application blank.—All the questions we ask seem to us pertinent,
and the answers give us a line on the applicant’s desirability.
N o. 1831



^ m e . / ° ! [ n A obri!'A! . .

M ngled A ge


Address. A 6*3.* ™ ™ . ? ! : . .



H eight


R ead E n g .. . I . 0. ........


I-ast em ployed a t ? f ? r »



W rite .

A iu tu


H ow long® m.01} ths.

W h y r e le a s e d .^ ? ” ^ . ? ^ " ^ LAST 4 PLACES YOU WORKED

How long.'. ? f ? ! . . . .

Place?.*?1.'/?.’1.'!'! s p.r.‘ nf . s !,°p

P la c e d "6?

W h y quit?.™0/? W . .

How long*™.0.'??*

Why q u i t ? ^ !* /? ^ .........

P la ce ?™ ?5 °“'!\ Tool Co: How long?.™ ?"!?.

Why quit .T?°:faT. ...........

Place .FT^tte. R:.f,.l!1
:rab..... How l o n g W h y
Wa Ke








quit. T ?.9"!?.?eT!na!??!,!rt:

Wasesexpected.?.<??!.™ l...

Kind of work d o n e . f ^ .!^?li.s![in^
Kind of work desired.


Good polisher on edge tools. Quit because ice called him for smoking in grinding room.

Form II



Employee’s record card.—This gives an analysis of the man’s record
with us, and is used to make notes for future reference.
D e p t.___ D a t e f M ?
N o.........? ? { ; . . . .N a m e .. ?.°}.r} ! s.? ? :t ? } * . .A g e .


A ddress. . J.8.2.3. A ™ !10.7.
R ead Eng.

Nationality . . .

.. Languages spoken: E ng.........£

S ocieties............. 7™ ?;......................I n g l e * Children


. . . W rite Eng. / f ? ;
R ate per hr.

R ate

E m ploym ent ceased.5//? ^ !? ..................................... Quit—Layed oil— Discharged

To go t0 Detroit

®ave weeWs notice.

Good man—take Mm back if he comes.

A p p r o v e d .? ;. ?L*..........................................Signed


Vir. D . Plumb


Form III

Record card o f work done and hours worked.—This card shows not
only the kind of work done but the hours worked and the amount
earned; in other words, it is a continuous pay-roll record for each
particular man. This is valuable in our work as we are able to assort
these cards by classes of work done, and quite often settle disputes
as well as use them as a basis of records for the adjustment of wage
In one case we stopped what seemed to be a serious walkout of 12
men, all working on the same kind of tools. They sent a delegation
to the employment department with a request for more money, point­
ing out that the work was hard and that some men could make only
$14 to $16 per week; that the men who made high wages were excep­
tionally able workers, and that their pay was not a fair basis for com­
parison with the average men.
By taking the cards of all the men on this particular work, our
employment manager was able to show the delegation that the lowwage men were not working full time, but were the loafers of the



department, and that on the basis of the hours worked they were
earning as much per hour as the high-wage men on this class of work.
The delegation was so convinced of the fairness of our position that
the trouble died before it was born.
Name John Sobritski

Description of

w .o .

Reason for being

Hours Reason for
Pay Week Description
of work W. 0. being out Pay







A . E. Nail 1\
B . S. Hand 2


D ay rate

7 50

A . E. Nail lb

u «




D ay rate
Piece % 1.5
IS 15

Form IV

Pass issued to workmen to leave the factory and reasons given.
No workman can go out without a pass.
Dept. 18
Name John Sobritski

Date 5112(17
No. 1831

Pass out at 10.15 and excuse

Head John M cM ullin

Work caught up.

Supt. H. T. Jackson



Form V

184 ;


Leaving slip.—Slip for a man who is discharged or quits.
be signed by the employment manager.
D a te’ 7

K o ........
John SobrUski

Please pay to





wages for wee*: ending 51171IS
Dept. Head John McMullin



Left ^

Cause............. .


To go to Detroit to polish auto parts

William D . Plumb

Km pl. Agt.

This slip must be signed b y Em ploym ent A gt. if employee is leaving.
Form V I


While we have not gone far enough to indulge in psychological
tests in the selection of workmen, and we do not differentiate between
blondes and brunettes, we have found it necessary to have certain
standards for the use of our employment department, and from our
experience we have drafted a partial set of rules and specifications
to assist in selecting the right men for each particular job.
These rules are as follows:

ir in g

M en

Be courteous. Be patient; remember you have much to do with ‘ labor’s ” opinion
of the factory.
If we have the kind of work the applicant wants, give it to him, provided he is
3trong enough, does not seem to be a floater, and has no infirmity.
If we haven’t the kind of work he wants, try to interest him in something that is
similar to it.
When hiring men, do as follows:
I. Ask them what kind of work they have been doing. If they haven’t been
doing any work similar to ours, ask them the kind of work they want. If they say
labor, they are possible for following jobs, provided they come up to the requirements
necessary for the several jobs: Yard, trucking, grinding, tempering, polishing, and
If they ask for something in our line they are ready for application blank.
II. If applicant wants work in which we have no opening, or doesn’t want work
we have, do not bother with application blank unless he seems especially good.
III. Make out, or, if he is able to do it, have applicant make out application blank.
IV. If applicant wants work in our line, find out experience or reasons for wanting
V. If applicant comes up to requirements, explain to him carefully the job, the
pay, the bonus system, the card system, the hours, and the fact that he must give a



week’s notice before leaving to get pay in full, and that we hold back a week’s pay.
Finally tell him that the employment department is always ready to straighten out
any misunderstanding he may have.
For grinders, the best to draw from are— Nationality: Polish, Lithuanians, or
Americans, experienced grinders, or Americans who want to try it after being told
that the job is hard work, wet work, and that the majority of the men are Polish, but
the job pays good money. Ask them if they are ever troubled with their backs or
rheumatism. Physique: Generally strong and big boned. Some small wiry ones
make good, but not many of them. Explain: Must wear glasses, boots, and aprons
for wet grinding, which we furnish, and for which they pay at the rate of $1 per week.
Forgers in department 14— Boys for back of press; must be at least 18 years old,
big boned, either American or American Pole. Remember that we want one that
can work up to drop hammer.
Heaters.—Men over 21 years. Used to working in heat. A man that has worked
in a rolling mill or any forging shop. Either American or Polish.
Drop or pressmen.—Transfer good heater. No heaters available, get old forgers on
foreman’s list. No one available, take men over 25, with intelligence and strong
Handlers.—Americans over 21. Men accustomed to using a hammer preferred,
such as carpenter’s helper or chipper.
Finishers.— Girls 16 or over. Americans or Italian, former preferred. Some expe­
rience in factory work. Neat about clothing, without cheap finery. Better if they
are not “ flirty” and live at home.
Packers.— Americans, experienced packers preferred. In any case must be able
to read and write well, must be reasonably neat, enough to show carefulness.
Handle belters.—Americans or Italian. 18 to 25. Strong wrists and quick movers.

There a r e s i m i l a r instructions in r e g a r d to other G la sses of em­
ployees, but these will be sufficient to show the extent to which we
have gone thus f a r .

When I asked our employment department what they had accom­
plished, the answer was, “ Not much. We have hardly scratched
the surface as yet.” Realizing that they had only been in actual
working order in their new building since July, 1916, or a period of
eight months, a search of their records hardly bears out such an
answer, but when the problems to be solved are so many, they evi­
dently feel that what they have done is but a drop in the bucket.
I propose to point out some of the things they have accomplished
and leave it to your judgment if they are not at least on the way.
First.—A bonus system.
The employment department found that one of the greatest evils
from which we suffered was continued lateness, continued absence,
and workmen quitting at the drop of the hat. To discourage these
practices and reward good workmen, they proposed, and we adopted,
a bonus system as follows:

A workman receives an additional 5 per cent of his weekly
pay, providing he turns in a perfect weekly time card as to attend­



ance. Excused only if sent home by foreman or loses time due to
injury incurred at factory.
Receives another 5 per cent for maintaining the standard of a
good workman. It is assumed that all employees have maintained
this standard, unless they are reported to the contrary by their
foremen or the superintendents. This bonus is deducted in extreme
cases only.
While workman is credited with the bonus from the day he
starts, he must work 3 months before he obtains it. If he quits or
is discharged before this time he receives no bonus.
(<d)' The bonus is paid by check,, and a workman may leave his
bonus on deposit with the firm and receive 6 per cent annually,
payable semiannually.
We now have about 41 bonus books on deposit. We have greatly
improved the conditions and feel that it has been a wise expenditure,
but experience has proved that it needed stiffening, and we have
added a ruling that seems to be having the desired effect. The
ruling is as follows:
If an employee loses time three weeks in succession, except for reasons covered by
provided excuses, he forfeits his rights to his entire bonus until he shows a perfect
time card for one week. He is notified that if he continues this delinquency he is
not considered desirable.

By showing delinquents how much they are losing in cold cash
by being late and losing time they are made to realize that it does
not pay.
Second.—Reduction in hours from 57\ hours to 52% hours.
During the period when men were so hard to get we tried to ana­
lyze the cause for men either not hiring with us or not staying with
us and the employment department made the following report as to
one of the contributing causes :
Our work from its very nature is hard and laborious, tiring men out compared with
work in the average factory.
We figure that in order to hold our men and make our plant attractive to new men
it is necessary to reduce our week from 57J hours to 52£ hours, with no reduction
in pay.
We figure that it will not decrease our production but will raise it.

After some discussion their report was adopted and on December 4,
1916, all day rates were raised so that the pay equalled or slightly
bettered on a 52^-hour basis the old pay on a 57£-hour basis.
All piece rates were carefully analyzed and adjusted in every case
where the shorter hours affected the pay of the producers.
The results speak for themselves. The men felt better and appre­
ciated our action. It is much easier to hire men than before.



The weekly production in one of our worst departments, in spite of
the shorter hours, has increased 18.4 per cent and in the entire plant
10 per cent.
Third.— Reform within a department.
One of our departments demanded personal investigation, as we
found it impossible to keep men or to maintain production.
An analysis by the employment department showed poor shop
conditions in many phases:
(а) Inadequate artificial lighting at dusk, so bad that no one but
the individual workman bent over his work could tell what he was
doing. This part of room dark and cheerless.
(б) Bad drainage in the rear of the machines, which were fed with
water. The water collected in spots. This section of the depart­
ment had a dank unwholesome smell.
(c) The foreman was inefficient, had no control over his men, and
therefore none over his department. He wasted most of his time
doing clerical work that he dragged out almost over the entire day.
The men who worked under him were as a class heavy drinkers and
independent, worked when they wanted to and quit when they
wanted to.
The following remedies were suggested and adopted:
(a) Improved lighting. 100-watt Mazda lamps were installed
every 20 feet.
(&) Drain was put in which took care of all excess water, relieving
the discomfort and destroying the odor.
(c) The foreman was discharged and a capable man from another
department put in his place. This move stiffened up discipline and
improved personnel of department.
(d) The entire layout was inspected, safety guards put on all
machines where there was any chance of a workman getting injured.
Everything possible was done to make the operation of the machines
safe and convenient for the men.
(e) Two instructors were installed to teach new men.
(/) All piece rates were carefully analyzed and prices adjusted so
that there were no “ good jobs” and “ bad jobs.” They were all
made “ fair and square jobs.”
Rates were equalized and set so that men could make an average
sum per hour on any kind of work done in the department.
Since then there have been several adjustments and there are still
a few to make, but we keep in close touch with the work and “ raise
before we are compelled to.”

This is the department that increased production 18.4 per cent,
with 5 hours por week less running time, and last month had the
largest production in the past 3 years.



This attention to details has already proven it has paid, through
the reduction in overhead expense per unit of production in this
Fourth.— Interviews with men who quit.
As all men are paid off through the employment department even
the men who quit without notice must return to the department to
be paid wages due.
All others must secure the signature of the employment manager
if they give notice or are discharged, so we have a chance to interview
all dissatisfied men.
Some of the results are illtiminating. When men quit or are dis­
charged they have no reason for withholding information. Com­
plaints are heard of nagging foremen, lost time in waiting for work,
and other complaints bearing on shop efficiency. Those are investi­
gated and if the fault is with us it is remedied.
These complaints brought to light the weakness of one of our best
foremen. He always had a “ chip on his shoulder,” approached
his men with that attitude, and caused a great deal of friction before
this fault was discovered. A talk by our superintendent convinced
him that while that sort of attitude may have been all right 10 years
ago, “ it can’t be done” —not now.
Another case: A man quit and on being asked for reasons stated
that he had to lose too much time waiting for one indispensable tool
and for material for his work; also, he was advised that his work
was O.K. by one inspector only to finish it up and have half a day’s
work thrown back by another inspector. An investigation proved
that the man was justified, the case was settled, and the man is still
with us. As this man was an experienced hand in the department in
which, as I stated, it cost us $100 to “ break in” a new man, it looks
as though this was a fair day’s work.
Fifth.— Transfers in the factory.
This was something never attempted. If a man did not suit his
foreman he was fired and no questions asked.
Now we look into unsatisfactory cases, try to find the causes,
remedy them if we can, and if we can’t try to locate the unsatisfac­
tory man in another department.
Just a few cases of what we have done:
We have one young man of undoubted ability, good personality,
pleasant, and obliging. He beeame a regular Monday absentee, took
all that was said to him as a reprimand with a lackadaisical air, and
had evidently lost his “ pep.” We found upon investigation that he
was fast becoming disgusted with his outlook and felt that he was
up against a blank wall. We transferred him to a semiexecutive



position in another department, gave him larger responsibilities and
a larger salary, and he has more than made good.
Another man was a boss trucker* who made a flat failure of the job.
He was then made head inspector of one of our hardest departments
and has done wonders in bringing up the general efficiency of the
department. He was temperamentally unfitted for one job and
fitted for the other.
Sixth.—Actual accomi)lishments.
I will not inflict upon you any details of labor turnover, but will
simply point out the reduction in the number of men who have quit
since the department has been in operation. Taking April, 1916,
as a basis, during the month of July, one of our worst months on ac­
count of heat, the number of men who quit was reduced 25 per cent.
This work has been steadily improving and in January, 1917, the re­
duction on the same basis was 48 per cent.
Since the installation of the employment department we have
decreased our working force 10 per cent, reduced our working time
almost 9 per cent, and increased our total shop production 10 per
Seventh.— Indirect benefits.
When we first started the employment department our men looked
on it with suspicion, as being another one of the things the boss was
trying to “ put over” on them under the guise of service.
This attitude of mind is common, and is no more than is to be
expected through past relations of employee and employer. Vander­
bilt’s phrase, “ the public be damned,” has been paraphrased over
and over again with the ‘ 4men be damned ” and the “ boss be damned.”
Recollect that this feeling has been handed down from father to son
and is bred in the bone. It is the survival of the days when 41to the
victor belong the spoils” and “ might is right.”
We are now on the threshold of better things. Employers know
and workmen are learning that their interests are identical. One
can not be prosperous without the other. This, however, is the
new viewpoint and has only made headway within the past 10 years,
and we can not expect to wipe out generations of suspicion and mis­
understanding overnight.
Our employment department has adopted as its motto “ put your­
self in his place,” patiently listens to complaints, and does not make
the common error of believing that lack of education actually means
lack of knowledge. Workmen do not put their kicks in purest
English, although sometimes they adorn them with the strongest.
Our men have learned that the employment department is built for



them, that it is a place where they get a square deal, and that they
will be treated right on all occasions.
To show you how far we have goiie I will cite the way disputes were
handled before and have been since the creation of this department.
Formerly men would stop work in a bunch, demanding something,
and refuse to return to work until it was granted. In one case they
gave* us one hour to consider a question involving 50 men in one de­
partment, and before we had time even to digest the demand the hour
was up and they walked out. Since April 1 we have had no strikes
and no threats. We have had two requests, and the men have stayed
at work until a decision was reached.
I wish to say that if our employment department had done nothing
but produce this feeling of personal responsibility to each other on
the part of the men and on the part of the firm, it would have justified
its existence and its cost.
I n conclusion, I feel t ha t in t h e s t u d y of e m p l o y m e n t p r o b l e m s w e
are trying to solve issues ag es old, a n d w h i l e th e r e w a r d is gr eat f r o m
t h e s t a n d p o i n t of efficient f a c t o r y m a n a g e m e n t , t h e r e w a r d is still
greater if w e c a n b u t h el p to solve t h e principle of h u m a n i t y involved,
a n d so insure t h a t c o o p e r a t i o n w i t h o u t w h i c h w e c a n m a k e n o p r o g ­
ress, a n d w i t h w h i c h t h e w a t c h w o r d will b e “prosperity for a i r ’a n d
n o t “prospe ri ty for one .’

Note.— If you think you do not need an employment department,
find out—(1) How many of your present employees have been with you over
12 months.
(2) How many men you have hired during the last 12 months.
Count every name which has appeared on your pay roll.
At the Philadelphia plant of Fayette R. Plumb (Inc.) 500 men are
employed. All the work above described is carried on by the assistant
superintendent and the controller, appointed as employment man­
agers, whose other duties take more than one-half their time, and two
clerks. In a factory of 150 men or less an employment manager with
the rank of assistant superintendent, with the assistance of a clerk
for timekeeper, could do it all.

Question. I would like to ask Mr. Williams whether the policy of
hiring and firing was taken up with the foremen individually or col­
lectively before the thing was put into effect.
Mr. W i l l i a m s . N o ; it w a s p u t into effect first as a m a t t e r of
policy a n d t h e n told to t h e m .

Question. Has the matter of the advisability of presenting it to
your foremen first been discussed before your association ?
Mr. W i l l i a m s . No; I think that is a matter of shop policy in our
factory; any change is adopted by the board and becomes a factory
policy with which we expect our men to comply, whether they are
foremen or workmen. We adopted this system first and told the fore­
men afterwards. Of course we consulted with our superintendent,
but not with the foremen.
Mr. G o u l d , of the B. F. Goodrich Co., Akron, Ohio. I would like to
ask Mr. Williams how he keeps the record of absentees.
Mr. W i l l i a m s . Simply by taking every morning a report of ab­
sentees by departments and handing it to our pay-roll department
and our record department. That is all there is to it. We do that
each and every day, and tabulate it daily by departments. Our
system consists practically of a watchman who takes care of the cards
and turns them in, as a part of his duty, to the record department.
W. F. Win a n , of the National Carbon Co., Cleveland, Ohio. I would
like to ask Mr. Williams, if I may, this question: In your bonus for
regularity or promptness, do you dock in addition to your system of
paying additional, that is, do you dock for tardiness of, say, a half
an hour %
Mr. W i l l i a m s . Nothing but the loss of bonus.
Mr. Win a n . A man may come in fifteen minutes late; does he
lose anything but the fifteen minutes ?
Mr. W i l l i a m s . He loses the bonus and the fifteen minutes, but
he is not fined.
M r . G o u l d . I w o u l d like to a s k w h a t p e r c e n t a g e of t h e w o r k m e n
h a s received their b o n u s . I believe y o u said t h e y h a d to b e there
three m o n t h s be fo re t h e y received a n y b o n u s %


W illiams.

That would be mighty hard to say offhand.



M r . G o u l d . D o y o u find th at m a n y of t h e m leav e before t h e
three m o n t h s are u p , t h a t is, is t h e b o n u s a n i n d u c e m e n t for th e m e n
to r e m a i n w i t h y o u ?

Mr. W i l l i a m s . Yes, it helps, but it does not obviate that three
months’ trouble; we all have that. We find that it pays to offer
them that bonus, but what the percentage is I don't know.
Mr. G o u l d . D o you find that a group of men quit at the end of
three months after drawing the bonus ?
Mr. W i l l i a m s . Some do, yes, but we have cut down the percent­
age of quits 48 per cent in about a year, during the worst period I
have gone through in my life, and so it must come from somewhere,
and that is only one of the factors in the general situation.
Mr. J o h n s t o n , of Atlanta, Ga. Do you not attribute your changed
conditions in the factory, in the department you spoke of, to the
shorter hours having an effect upon steadying your labor ?
Mr. W i l l i a m s . Surely; that is why we did it.
Mr. J o h n s t o n . Y o u found good effects from it?
Mr. W i l l i a m s . We certainly did.
The C h a i r m a n . If there are no further questions we will now in­
troduce our next speaker, Mr. Wolf, who has come to us from Canada,


About three years ago I was asked by the committee on economic
administration of industrial establishments of the American Society
of Mechanical Engineers what I considered to be the “ new element
in the art of management.” At that time, while the general prin­
ciples of what I wish to present for your consideration to-day were
in my mind, they were more or less indefinitely formulated and I
hesitated to give them expression. Since then, however, I have had
ample opportunity to verify my earlier conclusions and have put
many of them into actual practice.
In presenting for your consideration my conception of progressive
industrial organization, I do not wish to have it understood that I
am attempting to elaborate on the methods of Mr. Taylor and others,
nor do I wish to detract in any way from the splendid work done by
these men. I hope that this paper, however, will show that there is
a relationship between the various methods and will point out how
they are all forward steps in the great movement which increases
man’s productiveness and his creative powers.
In order to give you my ideas more clearly, a general review of
present conditions in the industrial world seems to me necessary.
Many of you have undoubtedly had more or less opportunity to
observe the deplorable inefficiency of most of our large industrial
concerns, especially those commonly known as trusts, where a num­
ber of formerly independent plants have been united under one
common management. The plants are usually scattered over a con­
siderable area and the central offices located in some commercial
The first step in the organization of these corporations has usually
been the removal of the resident owners and managers from the
various localities to the central offices and the subsequent attempt
to carry on the functions of management by the superintendent and
heads of departments. These men, in most instances, not having
had any real knowledge of manufacturing costs and profits, are, of
course, incapable of conducting the business intelligently. It there1

This paper is com piled from three papers b y Mr. W olf, tw o of w hich were published in th e Bulletin
of the Taylor Society for August, 1915, and March, 1917, and the other in the Pulp and Paper Magazine
for Jan. 4,1917. A t th e tim e th e papers were written Mr. W olf was in the em ploy of the Burgess Sulphite
Fiber Co., Berlin, N. H .

103021°— 17— Bull. 227------ 13




for© becomes necessary for the central office to perform much of this
work for. the various plants.
As a rule no final manufacturing costs are made at the plant and
as a consequence those who are held directly responsible for the cost
of producing and who have the most intimate knowledge of operating
conditions have not a very intelligent basis upon which to work.
They can receive very little help from the former managers; in the
first place, because these managers are so far removed from the
actual conditions that their judgment is affected; and, in the second
place, their interest is divided among so many different plants that,
in the very nature of things, they can not give the various problems
the time required for intelligent consideration.
A realization of the impossibility of keeping close watch on details
at a distant plant is perhaps responsible for the removal to the cen­
tral offices of some of the vital functions of the individual plants,
such as purchasing, selling, construction and maintenance, cost
keeping, etc.
A central purchasing department has undoubtedly many advan­
tages, but as ordinarily conducted in large corporations these advan­
tages are almost entirely offset by the obstacles placed in the way
of free choice on the part of the mill organizations and the consequent
discouragement of individuality in making selections. The impossi­
bility of handling all of the purchases by one capable man necessitates
delegating a lot of minor purchases to subordinates, who have no real
knowledge of actual mill requirements. Even though they know
what is required in one mill, they can not know in others where con­
ditions are not the same.
The purchasing agent should have full power to build up an efficient
organization for keeping informed of the market conditions, so that
requisitions from the mills can be handled with promptness and dis­
patch. The department should be able to furnish full, cpmplete in­
formation to the individual plants whenever they need it, in order
to purchase supplies properly. It should encourage the mills to
furnish specifications, and welcome attempts on their part to keep
comparative records for the purpose of determining the best materials
to use. It should always conduct itself toward each separate organ­
ization as if it were an outside firm, employed to give advice and
assistance in every way possible to enable purchases to be made
economically. Each plant should receive frequent reports from the
purchasing department, giving complete information about materials
found to be giving good results in other places. This one feature
alone would make it immensely valuable to the parent corporation.
I have dwelt upon these details merely to show how greatly a
central purchasing department can aid if put in its proper relation­
ship to the various plants, namely, that of servant rather than the

inj> iv h > u a lit¥ m m u s m — r o b e b t b. w o l f .


equal of the manufacturing department. Certainly nothing can be
more important to manufacturing than the proper purchasing of
materials which are to be converted into the finished product or which
are needed to affect this conversion.
Let us take accounting next. Why are accounts kept and what is
their purpose? In the last analysis, accounts are records of the
progress of accomplishment and are used to enable those in charge
of the corporation’s affairs to decide upon the future policy to pursue.
Why, then, should any attempt be made by the central office to
keep accounts that are of strictly local interest to the individual
plants? And why even attempt to dictate how and when these
accounts should be kept ? In sof ar as comparisons between individual
plants are concerned, this is justified, but no further, and even in this
case it should not be pushed to a point where comparisons which local
conditions at the plants demand are not allowed.
The foregoing should not be misconstrued to mean that I believe
a central accounting system for corporations is not necessary or de­
sirable, for it most certainly is. The accounting department should
confine itself, however, to such accounting as is of interplant nature,
and not attempt to dip into local conditions, except in an advisory
One serious mistake often made is allowing the accounting depart­
ment practically to control the mill offices. These, for reasons to
be pointed out later, should be entirely under the control of the local
management, subject, of course, to frequent auditing by the accounting
The central office of the corporation needs only resultant figures
giving a, true record of the progress of each plant, and made in such
a way that comparisons can be easily made, the local plants being
required to furnish any figures called for at all times.
The selling, in most cases, can be handled by the central office
much better than any other function; indeed, the main purpose in
forming large corporations was primarily to stop ruinous competi­
tion between plants, especially in periods of slight demand. There
should, however, be much closer touch between the selling depart­
ment and the mills, and a much more intimate knowledge of operat­
ing conditions by the salesmen. The degree of this intimacy is, of
course, one of the important things to be decided by the chief exec­
“ Maintenance and construction” is another thing which should
be touched upon. There is usually much damage done to the indi­
vidual plants by decisions of “ absentee” engineers, whose knowledge
of the plant conditions can not be of such an intimate nature that
they can make intelligent decisions. This very often actually re­



tards progress in the organization and serves to discourage indi­
vidual effort upon the part of the local mill management.
A high-grade consulting engineer, employed to devote his entire
time to the corporation's affairs, would be a very valuable asset.
He should conduct himself toward each individual plant exactly as
he would if they were all independent establishments and his own
clients. There would be this very important difference, however,
which would mean much greater freedom of action—i. e., he would
be entirely free to give each plant the benefit of his experience in
others, and in this way would be a constant, highly intelligent means
of exchanging ideas of mutual interest and benefit.
Of course, I realize that most of this is a review of things already
known to many of you, but this review seems to me to be necessary
in order to present properly what, I hope, will be more constructive
in nature.
I am now going to make a plea for the development of plant indi­
viduality. This is not merely a return to old conditions existing
prior to amalgamation, but a regaining of all the advantages of the
old order of things with the additional advantages of the new.
To begin with, we must have managers in our plants who have
real executive ability and who are not selected because of their par­
ticular skill in certain manufacturing lines. These managers should
have power to select and form their own organizations, and for this
reason must be men who have a broad realization of their unity
with the parent corporation. They should be the kind of men who
are ready to receive suggestions and receive them gladly, and at the
same time have individuality' enough to reject those things which,
from their knowledge of conditions, it seems unwise to incorporate.
Having selected this type of manager, the work of developing the
organization’s individuality can begin.
A good organization must have the following elements:
1. A certain definite function to perform.
2. A definite central organization of control.
3. A thorough system of recording all events which take place in
the performance of the work.
4. Means for vitalizing certain subconscious functions of con­
trol so as to produce prompt, intelligent action without direction
from the conscious mind.
5. Means fpr making newly acquired accomplishments automatic.
In other words the question resolves itself into developing in the
plant as a unit all of the functions so wonderfully exemplified in the
human body.
Recognizing the principle that any organization to be progressive
must have individuality, let us see how this individuality can best be
built up. To do this we must have some knowledge of what con­



stitutes individuality, and I know of no better way to illustrate this
than by showing how unity of action is maintained in the organized
activities of the physical body.
The mechanism which enables the human body to act as a unit is
the nervous system, which controls, either consciously or subcon­
sciously, every bodily function.
In order to understand the reason for the simplicity and wonder­
ful unity of the nervous system in spite of its apparent infinite com­
plexity, it is necessary to describe its three great subdivisions:
The sympathetic system.
The spinal system.
The cortical system.
Take first the sympathetic system, which is the seat of those
almost entirely automatic functions over which the conscious mind
has only very indirect control. This consists principally of the
efferent (or outgoing) nerve cells, whose bodies are collected into
ganglia, or groups, located outside of the spinal cord, principally in the
head and in the body cavities. For instance, the nerves which stimu­
late the growth of the hair, the fingernails, and even the growth of the
body itself; the vasoconstrictor and vasodilator nerves controlling
the contraction and expansion of the blood vessels; the nerves con­
trolling the beating of the heart and thousands of other functions
are all a part of the sympathetic nervous system. This is so de­
signed that it constantly reminds and, in a sense, releases the forces
required to keep in motion the routine work necessary to our preser­
Next let us take the spinal system, which is located inside of and
protected by the backbone. This is the seat of those semiautomatic
functions over which the brain has a direcjb and constant control.
These functions—such, for instance, as walking or breathing—after
once being set in motion by the will, acting through the brain, or
conscious mind, are kept in motion by the nerves in the spinal cord
without the conscious effort of the individual. It is also the seat of
the so-called reflex muscular action, which causes the body to act
involuntarily for its own protection, when necessary.
The fundamental difference between the subconsciousness of the
sympathetic system and the subconsciousness of the spinal system is
that the stimulating nerve power of the latter is more or less directly
under the control of the conscious will, while the sympathetic system
performs its work independently of it.
Finally, let us describe the cortical system, which is really an out­
growth of the spinal system, surmounting it, coordinating and con­
trolling its action. The upper portion, or cortex of the brain, is the
seat of the memory, where all the sensory impressions from every
portion of the body are brought by the afferent (or ingoing) nerve



paths, and from which originate the efferent (or outgoing) impulses,
which keep the body functioning properly in accordance with its
environment. The will, having the power to recall and use the storedup records in the brain, can, by means of communicating nerve fibers
in the cortex, direct the organism through its outgoing nerves to
useful efforts of progressive accomplishment.
I could go on almost indefinitely with illustrations of this nature,
but enough have been given to bring out the point I wish to make,
namely, that the human body is an organization of many elements
(and I might say of many personalities, for each cell has individuality
of its own, and many can live outside of the body itself), all working
together in harmony, under the direction of the will, acting through
the nervous system.
Now, what I want to point out is that inasmuch as man’s progress
depends upon the perfect coordination of his forces to produce unity
of action, we have no right to expect an industrial organization to
make progress (which it must do as a unit) without the establishment
of a conscious coordinating mechanism similar to the nervous system
in the human body.
Is it not a fact, then, that the success of scientific management,
properly applied, is due to its action in building up the individuality
of the organization ? I think there is not the slightest doubt on this
point, nor is there any doubt that the failure of some organizations
to put their business on a scientific basis has been caused largely by
the fact that they have not used the mechanism of scientific manage­
ment for the purpose of perfecting its unity.
Recognizing, then, these various recording devices and instruments
which come in direct contact with the work as the end organs of
newly acquired senses, we must conduct the impulses resulting from
the instrumental contacts through suitable channels to the place
where all things affecting the organization are recorded.
We must have, in other words, an organization memory, which is
entirely apart and separate from the memory of the various indi­
viduals of the plant. It is only by having such a place of record,
where all things affecting the organization as a unit can be recorded,
that a proper perspective can be obtained.
A gradual development of such a memory by the addition of new
senses will tremendously accelerate the rate at which the organization
will progress, just as in the individual the addition of new concepts
to the brain tremendously increases its reasoning power.
In designing the recording mechanism, or plant memory, it is best
to use graphical methods in order that comparisons may be easily
made. Figures, it must be remembered, are static, while curves
show tendencies.



By the use of graphical records, things affecting each other can be
brought in close relationship, enabling those whose business it is to
control the manufacturing process to see at a glance what action is
necessary on their part to produce the best results, not only with
respect to their own department, but with respect to the whole plant.
Having described the memory part of the organization as corre­
sponding to the cerebrum of the brain, let us now consider the part
corresponding to the spinal cord, which is the seat of what we will
call the vital or intelligent subconscious action. In our industrial
organizations this corresponds to the control by the department
heads and foremen, who are constantly directing and setting in
motion corrective forces tending to keep the organization functioning
properly. This is analogous to what the anatomist calls “ reflex
Now, in the average organization much of the work is done in this
manner without direction from the central conscious mind. There
being no plant memory, this is the only way it can act and progress
is necessarily extremely slow, as it is, for instance, in the insect
world where the spinal system is not surmounted by a brain.
As the coordinating effect of a brain, however, enables the spinal
cord to do much better work, so does the addition of a plant memory
tremendously aid by intensifying the subconscious action; as, for
instance, when it acts through its executive branch to stimulate the
creative energy of a foreman, subforeman, and even individuals, by
giving them a record of the performance of their work and by making
comparisons with others. By this means a spirit of emulation is
built up which makes each man desire to do good work of his own
free will. The urge comes from within instead of from without. The
result of having this spirit permeate the organization means an
entire reversal of the old order of things, where the chief executive
uses his creative force to make his department heads carry on their
work and they in turn pass the impulse along to their foremen, and
so on until it reaches the last man in the organization, where it is
felt very faintly indeed.
The new order carried out to its ultimate point means that each
man in the organization is interested because those above him have
had brains enough to furnish him with the means of recording his
progress. He then feels that he is creating something and is happy.
His foreman, being released from the tedious work of making Ids
men work against their will, finds stimulation in directing the forces
he feels flowing upward for him to direct. As a consequence, he be­
comes creative in his work.
The department head has the same experience and finally the chief
executive finds himself directing the forces looking to him for leader­
ship and he himself becomes creative and no longer wears himself



out by trying to drive his own creative force into the men in his
organization, thereby depleting his own supply.
Finally, let us take that part of the organization corresponding to
the sympathetic nervous system, for it has a very important place
in our scheme of rounding out the organization’s individuality.*
Much of the organization’s activity must become automatic, other­
wise our capacity to acquire new accomplishments will be greatly
limited. Man’s progress in the world consists largely in the conscious
acquisition of new talents and making them subconscious or auto­
matic. We begin this when we, as children, consciously learn to walk
and later in life, perhaps, learn by dint of hard work to ride a bicycle.
Once having learned these things we no longer have to think about
them, but our minds, while we are doing them, are released for other
Now, in our plant organization there is no better method of
installing a subconscious control than by the use of a “ tickler”
system, as it is used in the Taylor system of scientific management.
This consists simply of a cabinet with a drawer for each month in
the year, containing substantially built folders for each day of the
month. In these drawers are placed the various memoranda, to be
taken out and distributed on the proper dates, reminding those to
whom they are addressed of certain routine work to be done. A
system so safeguarded as to keep the conscious mind of the organ­
ization informed when a departure is made from methods decided
upon as best or made so responsive to changes in plant conditions
as automatically to allow the executive branch to know when con­
ditions should be changed is fulfilling a long-felt want. I can
describe to you a thousand ways in which such a system is serving
a large industrial concern and enabling the conscious mind of its
executive, department heads, foremen, and others to do creative
work for its advancement.
I want now to state, in as few words as possible, what it seems
to me are the essentials of organization work. The first thing to
decide upon is what constitutes individuality. The units must be
no larger than they should be to function properly as units in the
performance of a common task. If the corporation ownership is
large, divide it into these units and make them come into the parent
organization as complete units.
Having determined your units, give them individuality in the
following manner:
Furnish them with means of becoming conscious of themselves
and of their environment by building up a system of scientific
registration and control similar to the nervous system of the human



2. Provide a definite central place for recording all of the various
sensory impressions furnished by the recording mechanisms, arranged
in such a way that comparisons of the whole progress of the plant
can be made with the least possible effort, exactly as it is done in
the brain of the human body.
3. Provide for the subconscious control of the newly acquired
accomplishments as exemplified by the spinal and sympathetic nerv­
ous systems in man, thereby liberating the conscious mind to deal
with new problems of a creative nature.
If these three functions of management are kept in mind there
will be no danger of becoming confused by the mechanism of con­
trol, for it will always be seen to be what it really is, namely, the
nervous system in progress of development in order to establish
greater unity of organization.
Furthermore, a thorough recognition of these three cardinal prin­
ciples for establishing unity of action is a perfect safeguard against
oversystematizing. The human nervous system is extremely flexi­
ble and always more or less under the control of the will and it is of
the utmost importance that the mechanism for controlling and uni­
fying an industrial organization be equally flexible apd capable of
being modified.
Any system so designed that it does not permit the intimate
contact of employer with employee and therefore does not fully
recognize the value of the human touch is doomed to failure.
With respect to the relations between manager and employee, I
have a feeling that there are certain things in the minds of some
members of this society that are somewhat contrary to my own
convictions. My convictions are based upon what we are actually
doing in our mills at Berlin and are also based upon my three or
four years7 experience immediately after graduating as an engineer
in 1896, when I was working at the paper trade in various mills in
New York State and New England.
While this practical knowledge is a great asset, I believe the most
valuable thing I learned was the workman's point of view, by direct
intimate contact with him; so that our method of organization
efficiency at the Burgess* plant takes this human factor into account
to the fullest extent.
It is necessary to build up an organization unity, but in order to
do this it is necessary to record the various elements that enter into
the manufacturing operations in such a way that the results can be
analyzed. These analyses can then be used as a basis for changing
plant conditions, so that the laws that are discovered can be special­
ized through the creation of conditions for their expansion. This,
as you can see, is a very definite, vital, human problem, and requires
a constant development of the intellect of the men in the organiza­



tion. In other words, it is an educational process and the function
of the management becomes primarily educational in nature. It is
more a question of leadership than of compelling obedience. In
other words, we have succeeded in getting every man in the organiza­
tion (I say this in its broadest sense) trying to produce the largest
quantity of the best quality of pulp at the lowest cost. It is not
because the department heads, superintendent, or myself are making
superhuman efforts to produce the results but because we have suc­
ceeded in getting everyone to cooperate with us. There is a desire
to get this result on the part of the workmen throughout the entire
To be more specific, we will take the digester building as an exam­
ple. You are undoubtedly familiar with the old methods of cooking,
where a man judged the cooking operations by the “ feel” of the
digester and the relief valve, and based his judgment as to when the
digester should be blown upon the color of the liquor and the smell.
You can easily imagine that with nine different men cooking our
digesters we got nine different kinds of pulp. It was necessary for
us to hit upon some standard method of cooking and then get every­
body to follow this method. We began by putting on the bottom of
the cooking records a graphical chart, upon which the cook plotted
the gauge pressure, the steam pressure (which corresponds to the
temperature in the digester), and the gas pressure, which was ob­
tained by subtracting the steam pressure from the gauge pressure.
By watching these curves our cook could tell whether the relief was
as it should be by noting the drop in his gas pressure. If it dropped
too rapidly, he would shut off the relief valve; if not rapidly enough,
he would open it up wider. By gradually determining the ideal
standard cooking ehart, the men began to take a keen interest in
their work, as they were in reality following an ideal which they
recognized to be the true ideal in order to get the best quality of pulp.
Through studying the effect of the maximum temperature upon the
quality of the fiber, especially the strength, and studying also the
effect of the acid strength upon the maximum temperature, we grad­
ually began to accumulate a lot of information which enabled us to
coordinate and bring together certain parts of the plant which had
been running more or less independently. There were hundreds of
variables, we found, entering into the different operations and we
soon began to accumulate an enormous amount of data which,
because of its volume, tended to confuse our minds as to what the
real facts were. In other words, by carrying the analytical process
to its extreme point, we found a definite necessity for starting a
synthetic process which tended to unify and bring together the various
factors, so that they would enable us to see the underlying principles
involved in our manufacturing operations. To make a long story



short, we began to record our operations graphically, adding one thing
after another until we now have a graphical chart room which con­
tains over 2,000 charts, all having to do with the manufacture of
bleached sulphite pulp. We have many other charts for our various
by-products, in addition to these, but these are handled more or less
as separate organizations.
The net result of a long series of experiments was an increase in.
our production from 225 tons per day of the poorest quality of fiber
to 400 tons per day of fiber which to-day is recognized as a standard
of excellence all over the world. This was done without adding a
single digester or putting in a single additional wet machine for
handling the finished product. Of course, the physical equipment
of the plant was changed very radically; in fact, with the exception*
of the digesters and wet machines just mentioned, there is hardly
anything left of the old equipment. *In our wood room practically
everything has been changed—the method of barking wood, chipping
wood, screening and sorting it; our entire bleaching plant has been
rebuilt, a different method of bleaching being used; our entire acid
plant has been changed so completely that anyone who has not seen,
it since seven or eight years ago would not recognize it at all.
Of course, it goes without saying that we were obliged to put into
control of our manufacturing processes technically trained men, and
this was done by gradually working these men into the plan through
our chemical and engineering departments. By putting men of this
caliber in as department heads, after they were thoroughly familiar
with the practical part of the business, and putting the responsibility
for the operation of the department up to them, we were able to main­
tain, in spite of the rapid growth of the organization, the human rela­
tionship and contact with our men which is so essential to the welfare
of the workman.
We make it a policy to record the operations of the individual
workmen in such a way that they have some means for recording
their progress and are thereby able to realize just what their efforts
are producing. This brings out what we call the creative faculty of
the man to the fullest extent; he is able to really enjoy his work by
being given opportunity for self-expression. In all of our operations
we work to produce this result, realizing that we are primarily develop­
ing human beings and that plant efficiency is not an end in itself, but
that the real aim is the development of men. I could tell you some
very interesting things that have happened to men in our employ
who have changed their habits of living, decidedly for the better,
simply because they were being given opportunity to find joy in their
work, and have changed from men doing negative, destructive work
to men doing positive, constructive work. It is a fact that is begin­
ning to be recognized to-day by men who are thinking deeply along



these lines that a man is internally purified by doing work which is
fundamentally creative in nature. The desire for self-expression is
one of the most fundamental instincts in human nature, and unless it
is satisfied it is bound to manifest itself in all sorts of abnormal ways
which to-day are working such havoc in society.
I would like to call your attention here to the fact that we do not
use any of the so-called efficiency methods of payment, such as task
or bonus and piecework. Our men are all paid by the hour, except
those who are on a salary basis. In other words, we have enabled
our men to forget that the dollar is the most important thing in life
and by paying them liberally (much more than in any other sulphite
mill) enable them to devote their energy entirely to the task and are
actually doing their work well for its own sake. This brings back, as
you can readily see, somewhat the old artisan idea, where the work­
man took pride in the execution of his work because he had means for
realizing himself in it; only in our case the man does not create the
complete finished article, but does create and form a more or less
definite record, and realizes its relationship to the finished product
in which he takes a personal interest and pride.
In answer to Mr. Green’s statement at the October meeting that
“ We on the management side have the means of directing in detail
the treatment of every batch of stock in every beater, day and night,
and of taking the full responsibility which belongs to us for the
results,” I replied:
Our efforts, ever since we began to realize the workman’s point of view, have been
not to take responsibility from him. It is our plan to increase his responsibility, and
we feel that it is our duty to teach him to exercise his reasoning power and intelli­
gence to its fullest extent. There is no advantage gained by stimulating a man’s
reasoning power, and through this means his creative faculty, if the management
relieves the man of the responsibility for each individual operation. The opportunity
for self-expression, which is synonymous with joy in work, is something that the
workman is entitled to, and we employers who feel that management is to be'come
a true science must begin to think less of the science of material things and think
more of the science of human relationships. Our industries must become humanized;
otherwise there will be no relief from the present state of unrest in the industries of
the world.
In this connection it might be well to observe that our experience in the pulp
industry has been that instructions which go too much into detail tend to deaden
interest in the work. We realize fully the value of sufficient instructions to get uni­
form results, but we try to leave as much as possible to the judgment of the individual
operator, making our instructions take more the form of constant teaching of prin­
ciples involved in the operation than of definite fixed rules of procedure. It is nec­
essary to produce a desire in the heart of the workman to do good work. No amount
of coercion will enlist him thoroughly in the service.

The more knowledge a man has of the laws that he is working with
the more he is able to create conditions for the expanrion of these
laws. As I have said before, man does not create matter nor force,



but he does create conditions for the specializing of the natural
process, and, as this is the basic instinct in all mankind, the progress
that is made in any organization depends upon the amount of oppor­
tunity given to the human units, of which it is composed, to do
creative work.
Of course, the great problem of management is how this can be
done and at the same time blend all of the various individuals into
one great harmonious whole.
I should like to define what it seems to me we can classify as three
great fields or forces which we managers are working with and their
relationship to one another.
The first we may call the field of nature, and in this field the
natural or generic laws are the great dominating factor. It is the
function of scientific research to discover and. record these laws,
which have to do with the character of our raw materials and the
effect of the various conditions of manufacturing upon the conver­
sion of these raw materials into the finished products. These laws
in the field of nature are recorded in such sciences as chemistry,
physics, and mechanics. Mr. Taylor's classic analysis of the factors
entering into the art of cutting metals was clearly an exploration
into this field.
The second field has to do with what has been designated “ the
will of m an/' This will is essentially free and creative in essence,
and has dominion, as it were, over the generic law in proportion to
its intelligence. In other words, man's power to change the destiny
of nature depends upon his knowledge of the laws of nature and his
wisdom and intelligence in creating conditions for the specializa­
tion of these laws: It is our failure to recognize this “ originating,
choosing, and adapting" power and to direct it scientifically into
positive constructive channels that has caused it to turn into a nega­
tive, destructive force, retarding the spiritual development of the
human race.
The third field, or power, is much more difficult to define, but it no
less than the other two is a distinct aspect of life. We might define
it as the great universal, unifying principle of which the self-con­
scious faculty of man is a particular manifestation. In our indus­
trial organizations its emanation shows as what we call “ esprit de
corps," and it is generated by instilling into the minds of the men
in the organization a consciousness of their place in the great scheme
of things and a willing desire to cooperate with their associates. In
other words, we must plan to develop not only the self-conscious
faculty of our men but also a consciousness of their unity with the
whole; a sort of universal consciousness, as it were. Organization
consciousness, or plant individuality, can be genuinely obtained only
when this power is thoroughly recognized.



If we make sure that at the same time the self-conscious faculty is
developed a cosmic or universal consciousness is also developed,
thereby enabling each man to realize his place in the organization,
there is little danger of interferences which will cause trouble. In
other words, that great power which we may call “ the will of man,”
operating in the natural or generic field, can not destroy itself if
it becomes conscious of the great unity of the whole and its particular
place in the universal scheme of things. It is necessary to teach
men their place in the parent organization, as well as to teach them
how they can become more intensely creative in their own particular
sphere of operation.
I sincerely hope that, in outlining this philosophy of management,
I have indicated to you how an organization can be made so conscious
of itself as to realize at once when the human units, of which it is
composed, are not being given the proper opportunity for selfexpression; or to realize as well when these same human units are
not receiving the sympathetic help they need for their own indi­
vidual development.
Men can be productive only when they take an interest in their
work, and they will not take this interest unless those intrusted
with the direction of their efforts realize that they must teach them
constantly how to exercise their creative powers.

Mr. T y l e r . I want to ask two simple questions of Mr. Wolf. Do
you consider that superimposing premium or bonus methods on your
methods would vitiate them to any extent ?
Mr. W o l f . I d o n o t k n o w t h a t it w o u l d .
Mr. T y l e r . I m i g h t s a y t h a t I h a v e a prejudice in f a v o r of n o t
h a v i n g t ha t s y s t e m if it is n o t necessary.


W olf.

In other words, you do not think it would be


benefit ?

Mr. T yler . I would rather reward the men liberally, take away
from them the economic pressure, and then let them do the work
for the joy of doing it.

Mr. W o l f . Do you think where the task and bonus system was
already in operation the introduction of your methods would still
further increase production ?
Mr. T y l e r . I h a v e n o d o u b t of it.
Mr. H o w a r d . Do you consider that in your work character work
is your highest product ?
Mr. W o l f . Unquestionably the man product seems to be the most
Mr. W e l l s . Y o u know the methods of Mr. Babcock at the Franklin
Motor Car Co. ?
Mr. W o l f . Yes; I am familiar with them.
Mr. W e l l s . D o you think that the element he has introduced of
presenting his men with a period record of their performance along
with his task and bonus system is perhaps part of the secret of the
wonderful results he is getting there ?
Mr. W o l f . Yes, I do, and I will tell you something that confirms
that. I gave this talk to the boys at Ann Arbor once while the Taylor
Society was having a meeting there. Mr. Carl Barth was sitting in
the audience, and when I made the statement that I thought the fine
results came largely from the record system and not from the bonus I
thought Mr. Barth would chase me off the stage; but he did not,
strange to say, and afterwards I saw him at a dinner at Prof. Some­
body’s house, and he said, “ You are dead right; fully 80 per cent
comes through the system in regard to the record and only 20 per
cent from the bonus he gets.” I was glad to have Mr. Barth say that.
A man said the same thing after a talk I gave in New Haven out­
lining this method, and he added that this explained to him why, in




certain task and bonus payment, methods he knew about, results were
obtained, and in others no such results were secured.
Mr. P l a c e , of the National Civil Service Reform League. I wanted
to ask Mr. Wolf whether he had ever talked to Prof. Irving Fisher,
of Yale University.
Mr. W o l f . We are very good friends.
Mr. P l a c e . He gave me quite a little lecture on this same subject,
and I thought you must have talked with him, because your views
seem to be so identical.
Mr. W o l f . Last summer I went to Silver Bay, on Lake George, to
the Y. M. C. A. summer training school, and at Mr. Dennison's
request I gave this talk. Mr. Fisher, who was there in the audience,
came up to me and shook hands, and said, “ I have been waiting
for 20 years to hear somebody say that could be done. I have always
maintained that the creative instinct was the basis for human
Mr. W e l l s . There are other fundamental instincts besides the
creative instinct. Have you given your mind at all to the instincts
that make the joy of life ?
Mr. W o l f . Oh, yes.
Mr. W e l l s . What are they ?
Mr. W o l f . There are a great many of them.
Mr. W e l l s . What is the strongest one ?
Mr. W o l f . The creative instinct, because it is the reason for exist­
ence. That is what we are here for. A man never creates matter,
never creates force, but he creates. The law of the conservation of
energy teaches us that, and that must be the reason for man’s exist­
ence, because that is what he is doing with that choosing, adapting
power which is the basis of the whole thing. In the old days, of course,
before the advent of civilization, man had to struggle to exist; he
used all of his energies simply to surmount his environment; but now
he has been able to do that, he is on an entirely different plane; he
has to create mentally, and unless we give him an outlet for mental
creation this power is going to go into physical excess and dissipa­
tion; his nervous energy has to be dissipated somewhere.
Mr. M a r k e r t . Any man that is working because he desires to do
it and not because he is driven to do it is working creatively. The
normal man will begin to work from within, out, if he gets the oppor­
tunity. As an illustration, we had three men doing lime slaking. In
this lime-slaking work we mix a certain amount of lime with a certain
amount of water. Now, we have a refrigerating plant there to keep
down our temperatures. That is all brand new, and we have many
things that are new, that do not exist anywhere else. In this par­



ticular case we did not want these men to put any more steam into that
lime than could be helped, because we had to take the heat out again
by refrigeration if we put in more than was necessary. A fellow named
Fagan said, “ I have a way to make the fellows want to keep that
temperature down.” Now, there was a case where imitation, if it was
pure imitation, would do just as well. But they did not have the
desire to keep it down. So what did Fagan do ? He put a record­
ing instrument in the pipe line so that every batch of lime would be
recorded in temperature. He found that 4 degrees’ rise above normal
was all that was necessary to slake the lime. He went down and said,
“ Here, we are up against it; let’s see what we can do; see if we can
not find out what the biggest riss is that you have to have to get
results,” and they all worked on that and they were interested in
doing it. One of them was a Syrian, one a Russian, one a Cana­
dian Frenchman, and two of them could hardly talk English. They
were the ordinary type. Having found that 4 degrees was the ordi­
nary rise, Jimmy said, “ Let's call that 100 per cent; 4 degrees more
than that we will call zero.” They thought that was a great scheme.
He posted the records, and he has not had any trouble since, and those
fellows are having a bully good time doing it. Now, there is that
creative faculty. The desire is there because they are forming this
record; it is the formation of this record and the feeling every day
that when a man comes in he can know the result of his efforts.
Mr. H o w a r d . I was going to ask you a question right there.
Don’t you think that when you go to those men in a fellowship way
and put your hand on them that that has as much to do with it as
the record %
Mr. W o l f . That is very good, but we discovered that part of it
afterwards. The first thing we did was to put these records out in
sort of an arbitrary way. But finally, in order to get the maximum
results, it wants to be that other thing. But you can not help get­
ting those results if you keep teaching your men all the time.
Mr. F i l e n e . If we are still anxious to keep on talking I will ask
Mr. Wolf a question: What is the population of the town where
your factory is located ?
Mr. W o l f . Fifteen thousand.
Mr. F i l e n e . And how many employees do you have %
Mr. W o l f . Twelve hundred.
Mr. F i l e n e . Y o u have nearly 10 per cent, or about 8 per cent of
the population of the town, then ?
M r . W o l f . Yes.
103021°— 17— Bull. 227-------14



Mr. F i l e n e . N o w , don’t you really— and I suppose there is no
doubt but that you do—lay down as a fundamental that if your
plan is worth while finally you are going to build the kind of a town
there—that is, you are going to build the kind of citizen that will make
a town there— that will stand out as the kind of community we should
have in a 15,000 population: that is the test, is it not?
Mr. W o l f . That is the test.
Mr. F i l e n e . That is, you hold that up as the final test ?
Mr. W o l f . Yes.
Mr. F i l e n e . If you simply build a creative power in man to pro­
duce his weekly wage you have not built the right kind of creative
power ?


W olf.


Mr. W e l l s . I am sure that is your object. It is the all-round
man that you think your plan is going to develop ?
Mr. W o l f . Yes. It may interest you to know that it has had
a far-reaching effect on the civic life of the community.
Mr. K r a m e r , of Dayton, Ohio. I have not heard discussed in the
two days’ conference anything about the new Federal law for voca­
tional education. In my estimation it is very important, because I
believe that it will have much to do with the decrease in our instruc­
tion expense to new employees. I do not want to take up any time at
this late hour, but I suggest that if you are not familiar with the law,
when you get back to your respective homes you make an effort to
find out just what that law is. I think myself that it is a very good
law. It is the teaching of various industrial trades, also agriculture
and commercial interests, and I think it will have a great deal to do
with our turnover.
Mr. H o w a r d . I s that the Smith-Hughes bill ?
Mr. K r a m e r . Yes.
Mr. F i l e n e . 1 think the bill referred to is the bill by which the
Government is going to give national aid to the State for agricul­
tural education and also domestic science. I think that that will no
doubt be discussed at length at the other conference that is now in
session in Philadelphia.
Mr. W e l l s . I move we adjourn.
[The motion was seconded, and the question being taken, the con­
ference closed at 11.20 p. m.]