It is clear, then, that in carrying out the task idea after the required knowledge has been obtained through a study of unit times, each of the four systems, (a) day work, (b) straight piece work, (c) task work with a bonus, and (d) differential piece work, has its especial field of usefulness, and that in every large establishment doing a variety of work all four of these plans can and should be used at the same time. Three of these systems were in use at the Bethlehem Steel Company when the writer left there, and the fourth would have soon been started if he had remained.

Before leaving this part of the book which has been devoted to pointing out the value of. the daily task in management, it would seem desirable to give an illustration of the value of the differential rate piece work and also of the desirability of making each task as simple and short as practicable.

The writer quotes as follows from a paper entitled "A Piece Rate System," read by him before The American Society of Mechanical Engineers in 1895:

"The first case in which a differential rate was applied during the year 1884, furnishes a good illustration of what can be accomplished by it. A standard steel forging, many thousands of which are used each year, had for several years been turned at the rate of from four to five per day under the ordinary system of piece work, 50 cents per piece being the price paid for the work. After analyzing the job, and determining the shortest time required to do each of the elementary operations of which it was composed, and then summing up the total, the writer became convinced that it was possible to turn ten pieces a day. To finish the forgings at this rate, however, the machinists were obliged to work at their maximum pace from morning to night, and the lathes were run as fast as the tools would allow, and under a heavy feed. Ordinary tempered tools 1 inch by 1 1/2 inch, made of carbon tool steel, were used for this work.

"It will be appreciated that this was a big day's work, both for men and machines, when it is understood that it involved removing, with a single 16-inch lathe, having two saddles, an average of more than 800 lbs of steel chips in ten hours. In place of the 50 cent rate, that they had been paid before, the men were given 35 cents per piece when they turned them at the speed of 10 per day; and when they produced less than ten they received only 25 cents per piece.

"It took considerable trouble to induce the men to turn at this high speed, since they did not at first fully appreciate that it was the intention of the firm to allow them to earn permanently at the rate of $3.50 per day. But from the day they first turned ten pieces to the present time, a period of more than ten years, the men who understood their work have scarcely failed a single day to turn at this rate. Throughout that time until the beginning of the recent fall in the scale of wages throughout the country, the rate was not cut.

"During this whole period, the competitors of the company never succeeded in averaging over half of this production per lathe, although they knew and even saw what was being done at Midvale. They, however, did not allow their men to earn from over $2.00 to $2.50 per day, and so never even approached the maximum output.

"The following table will show the economy of paying high wages under the differential rate in doing the above job:

"COST OF PRODUCTION PER LATHE PER DAY

ORDINARY SYSTEM OF PIECE WORK—Man's wages $2.50 Machine cost 3.37 Total cost per day 5.87 5 pieces produced; Cost per piece $1.17

DIFFERENTIAL RATE SYSTEM—Man's wages $3.50 Machine cost 3.37 Total cost per day 6.87 10 pieces produced; Cost per piece $0.69

"The above result was mostly though not entirely due to the differential rate. The superior system of managing all of the small details of the shop counted for considerable."

The exceedingly dull times that began in July, 1893, and were accompanied by a great fall in prices, rendered it necessary to lower the wages of machinists throughout the country. The wages of the men in A. the Midvale Steel Works were reduced at this time, and the change was accepted by them as fair and just.

Throughout the works, however, the principle of the differential rate was maintained, and was, and is still, fully appreciated by both the management and men. Through some error at the time of the general reduction of wages in 1893, the differential rate on the particular job above referred to was removed, and a straight piece work rate of 25 cents per piece was substituted for it. The result of abandoning the differential proved to be the best possible demonstration of its value. Under straight piece work, the output immediately fell to between six and eight pieces per day, and remained at this figure for several years, although under the differential rate it had held throughout a long term of years steadily at ten per day.

When work is to be repeated many times, the time study should be minute and exact. Each job should be carefully subdivided into its elementary operations, and each of these unit times should receive the most thorough time study. In fixing the times for the tasks, and the piece work rates on jobs of this class, the job should be subdivided into a number of divisions, and a separate time and price assigned to each division rather than to assign a single time and price for the whole job. This should be done for several reasons, the most important of which is that the average workman, in order to maintain a rapid pace, should be given the opportunity of measuring his performance against the task set him at frequent intervals. Many men are incapable of looking very far ahead, but if they see a definite opportunity of earning so many cents by working hard for so many minutes, they will avail themselves of it.

As an illustration, the steel tires used on car wheels and locomotives were originally turned in the Midvale Steel Works on piece work, a single piece-work rate being paid for all of the work which could be done on a tire at a single setting. A fixed price was paid for this work, whether there was much or little metal to be removed, and on the average this price was fair to the men. The apparent advantage of fixing a fair average rate was, that it made rate-fixing exceedingly simple, and saved clerk work in the time, cost and record keeping.

A careful time study, however, convinced the writer that for the reasons given above most of the men failed to do their best. In place of the single rate and time for all of the work done at a setting, the writer subdivided tire-turning into a number of short operations, and fixed a proper time and price, varying for each small job, according to the amount of metal to be removed, and the hardness and diameter of the tire. The effect of this subdivision was to increase the output, with the same men, methods, and machines, at least thirty-three per cent.

As an illustration of the minuteness of this subdivision, an instruction card similar to the one used is reproduced in Figure 1 on the next page. (This card was about 7 inches long by 4 inches wide.)

[Transcriber's note — Figure 1 not shown]

The cost of the additional clerk work involved in this change was so insignificant that it practically did not affect the problem. This principle of short tasks in tire turning was introduced by the writer in the Midvale Steel Works in 1883 and is still in full use there, having survived the test of over twenty years' trial with a change of management.

In another establishment a differential rate was applied to tire turning, with operations subdivided in this way, by adding fifteen per cent to the pay of each tire turner whenever his daily or weekly piece work earnings passed a given figure.

Another illustration of the application of this principle of measuring a man's performance against a given task at frequent intervals to an entirely different line of work may be of interest. For this purpose the writer chooses the manufacture of bicycle balls in the works of the Symonds Rolling Machine Company, in Fitchburg, Mass. All of the work done in this factory was subjected to an accurate time study, and then was changed from day to piece work, through the assistance of functional foreman ship, etc. The particular operation to be described however, is that of inspecting bicycle balls before they were finally boxed for shipment. Many millions of these balls were inspected annually. When the writer undertook to systematize this work, the factory had been running for eight or ten years on ordinary day work, so that the various employees were "old hands," and skilled at their jobs. The work of inspection was done entirely by girls—about one hundred and twenty being employed at it—all on day work.

This work consisted briefly in placing a row of small polished steel balls on the back of the left hand, in the crease between two of the fingers pressed together, and while they were rolled over and over, with the aid of a magnet held in the right hand, they were minutely examined in a strong light, and the defective balls picked out and thrown into especial boxes. Four kinds of defects were looked for—dented, soft, scratched, and fire cracked—and they were mostly 50 minute as to be invisible to an eye not especially trained to this work. It required the closest attention and concentration. The girls had worked on day work for years, ten and one-half hours per day, with a Saturday half-holiday.

The first move before in any way stimulating them toward a larger output was to insure against a falling off in quality. This was accomplished through over-inspection. Four of the most trustworthy girls were given each a lot of balls which had been examined the day before by one of the regular inspectors. The number identifying the lot having been changed by the foreman so that none of the over-inspectors knew whose work they were examining. In addition, one of the lots inspected by the four over-inspectors was examined on the following day by the chief inspector, selected on account of her accuracy and integrity.

An effective expedient was adopted for checking the honesty and accuracy of the over-inspection. Every two or three days a lot of balls was especially prepared by the foreman, who counted out a definite number of perfect balls, and added a recorded number of defective balls of each kind. The inspectors had no means of distinguishing this lot from the regular commercial lots. And in this way all temptation to slight their work or make false returns was removed.

After insuring in this way against deterioration in quality, effective means were at once adopted to increase the output. Improved day work was substituted for the old slipshod method. An accurate daily record, both as to quantity and quality, was kept for each inspector. In a comparatively short time this enabled the foreman to stir the ambition of all the inspectors by increasing the wages of those who turned out a large quantity and good quality, at the same time lowering the pay of those who fell short, and discharging others who proved to be incorrigibly slow or careless. An accurate time study was made through the use of a stop watch and record blanks, to determine how fast each kind of inspection should be done. This showed that the girls spent a considerable part of their time in partial idleness, talking and half working, or in actually doing nothing.

Talking while at work was stopped by seating them far apart. The hours of work were shortened from 10 1/2 per day, first to 9 1/2, and later to 8 1/2; a Saturday half holiday being given them even with the shorter hours. Two recesses of ten minutes each were given them, in the middle of the morning and afternoon, during which they were expected to leave their seats, and were allowed to talk.

The shorter hours and improved conditions made it possible for the girls to really work steadily, instead of pretending to do so. Piece work was then introduced, a differential rate being paid, not for an increase in output, but for greater accuracy in the inspection; the lots inspected by the over-inspectors forming the basis for the payment of the differential. The work of each girl was measured every hour, and they were all informed whether they were keeping up with their tasks, or how far they had fallen short and an assistant was sent by the foreman to encourage those who were falling behind, and help them to catch up.

The principle of measuring the performance of each workman against a standard at frequent intervals, of keeping them informed as to their progress, and of sending an assistant to help those who were falling down, was carried out throughout the works, and proved to be most useful.

The final results of the improved system in the inspecting department were as follows:

(a) Thirty-five girls did the work formerly done by one hundred and twenty.

(b) The girls averaged from $6.50 to $9.00 per week instead of $3.50 to $4.50, as formerly.

(c) They worked only 8 1/2 hours per day, with Saturday a half-holiday, while they had formerly worked 10 1/2 hours per day.

(d) An accurate comparison of the balls which were inspected under the old system of day work with those done under piece work, with over-inspection, showed that, in spite of the large increase in output per girl, there were 58 per cent more defective balls left in the product as sold under day work than under piece work. In other words, the accuracy of inspection under piece work was one-third greater than that under day work.

That thirty-five girls were able to do the work which formerly required about one hundred and twenty is due, not only to the improvement in the work of each girl, owing to better methods, but to the weeding out of the lazy and unpromising candidates, and the substitution of more ambitious individuals.

A more interesting illustration of the effect of the improved conditions and treatment is shown in the following comparison. Records were kept of the work of ten girls, all "old hands," and good inspectors, and the improvement made by these skilled hands is undoubtedly entirely due to better management. All of these girls throughout the period of comparison were engaged on the same kind of work, viz.: inspecting bicycle balls, three-sixteenths of an inch in diameter.

The work of organization began in March, and although the records for the first three months were not entirely clear, the increased output due to better day work amounted undoubtedly to about 33 per cent. The increase per day from June on day work, to July on piece work, the hours each month being 10 1/2 per day, was 37 per cent. This increase was due to the introduction of piece work. The increase per day from July to August (the length of working days in July being 10 1/2 hours, and in August 9 1/2 hours, both months piece work) was 33 per cent.

The increase from August to September (the length of working day in August being 9 1/2 hours, and in September 8 1/2 hours) was 0.08 per cent This means that the girls did practically the same amount of work per day in September, in 8 1/2 hours, that they did in August in 9 1/2 hours.

To summarize: the same ten girls did on an average each day in September, on piece work, when only working 8 1/2 hours per day, 2.42 times as much, or nearly two and one-half times as much, in a day (not per hour, the increase per hour was of course much greater) as they had done when working on day work in March with a working day of 10 1/2 hours. They earned $6.50 to $9.00 per week on piece work, while they had only earned $3.50 to $4.50 on day work. The accuracy of inspection under piece work was one-third greater than under day work.

The time study for this work was done by my friend, Sanford E. Thompson, C. E. who also had the actual management of the girls throughout the period of transition. At this time Mr. H. L. Gantt was general superintendent of the company, and the work of systematizing was under the general direction of the writer. It is, of course, evident that the nature of the organizations required to manage different types of business must vary to an enormous extent, from the simple tonnage works (with its uniform product, which is best managed by a single strong man who carries all of the details in his head and who, with a few comparatively cheap assistants, pushes the enterprise through to success) to the large machine works, doing a miscellaneous business, with its intricate organization, in which the work of any one man necessarily counts for but little.

It is this great difference in the type of the organization required that so frequently renders managers who have been eminently successful in one line utter failures when they undertake the direction of works of a different kind. This is particularly true of men successful in tonnage work who are placed in charge of shops involving much greater detail.

In selecting an organization for illustration, it would seem best to choose one of the most elaborate. The manner in which this can be simplified to suit a less intricate case will readily suggest itself to any one interested in the subject. One of the most difficult works to organize is that of a large engineering establishment building miscellaneous machinery, and the writer has therefore chosen this for description.

Practically all of the shops of this class are organized upon what may be called the military plan. The orders from the general are transmitted through the colonels, majors, captains, lieutenants and noncommissioned officers to the men. In the same way the orders in industrial establishments go from the manager through superintendents, foremen of shops, assistant foremen and gang bosses to the men. In an establishment of this kind the duties of the foremen, gang bosses, etc., are so varied, and call for an amount of special information coupled with such a variety of natural ability, that only men of unusual qualities to start with, and who have had years of special training, can perform them in a satisfactory manner. It is because of the difficulty—almost the impossibility of getting suitable foremen and gang bosses, more than for any other reason, that we so seldom hear of a miscellaneous machine works starting in on a large scale and meeting with much, if any, success for the first few years. This difficulty is not fully realized by the managers of the old well established companies, since their superintendents and assistants have grown up with the business, and have been gradually worked into and fitted for their especial duties through years of training and the process of natural selection. Even in these establishments, however, this difficulty has impressed itself upon the managers so forcibly that most of them have of late years spent thousands of dollars in re-grouping their machine tools for the purpose of making their foremanship more effective. The planers have been placed in one group, slotters in another, lathes in another, etc., so as to demand a smaller range of experience and less diversity of knowledge from their respective foremen.

For an establishment, then, of this kind, starting up on a large scale, it may be said to be an impossibility to get suitable superintendents and foremen.

The writer found this difficulty at first to be an almost insurmountable obstacle to his work in organizing manufacturing establishments; and after years of experience, overcoming the opposition of the heads of departments and the foremen and gang bosses, and training them to their new duties, still remains the greatest problem in organization. The writer has had comparatively little trouble in inducing workmen to change their ways and to increase their speed, providing the proper object lessons are presented to them, and time enough is allowed for these to produce their effect. It is rarely the case, however, that superintendents and foremen can find any reasons for changing their methods, which, as far as they can see, have been successful. And having, as a rule, obtained their positions owing to their unusual force of character, and being accustomed daily to rule other men, their opposition is generally effective.

In the writer's experience, almost all shops are under-officered. Invariably the number of leading men employed is not sufficient to do the work economically. Under the military type of organization, the foreman is held responsible for the successful running of the entire shop, and when we measure his duties by the standard of the four leading principles of management above referred to, it becomes apparent that in his case these conditions are as far as possible from being fulfilled. His duties may be briefly enumerated in the following way. He must lay out the work for the whole shop, see that each piece of work goes in the proper order to the right machine, and that the man at the machine knows just what is to be done and how he is to do it. He must see that the work is not slighted, and that it is done fast, and all the while he must look ahead a month or so, either to provide more men to do the work or more work for the men to do. He must constantly discipline the men and readjust their wages, and in addition to this must fix piece work prices and supervise the timekeeping.

The first of the four leading principles in management calls for a clearly defined and circumscribed task. Evidently the foreman's duties are in no way clearly circumscribed. It is left each day entirely to his judgment what small part of the mass of duties before him it is most important for him to attend to, and he staggers along under this fraction of the work for which he is responsible, leaving the balance to be done in many cases as the gang bosses and workmen see fit. The second principle calls for such conditions that the daily task can always be accomplished. The conditions in his case are always such that it is impossible for him to do it all, and he never even makes pretence of fulfilling his entire task. The third and fourth principles call for high pay in case the task is successfully done, and low pay in case of failure. The failure to realize the first two conditions, however, renders the application of the last two out of the question.

The foreman usually endeavors to lighten his burdens by delegating his duties to the various assistant foremen or gang bosses in charge of lathes, planers, milling machines, vise work, etc. Each of these men is then called upon to perform duties of almost as great variety as those of the foreman himself. The difficulty in obtaining in one man the variety of special information and the different mental and moral qualities necessary to perform all of the duties demanded of those men has been clearly summarized in the following list of the nine qualities which go to make up a well rounded man:

Brains.

Education.

Special or technical knowledge; manual dexterity or strength.

Tact.

Energy.

Grit.

Honesty.

Judgment or common sense and

Good health.

Plenty of men who possess only three of the above qualities can be hired at any time for laborers' wages. Add four of these qualities together and you get a higher priced man. The man combining five of these qualities begins to be hard to find, and those with six, seven, and eight are almost impossible to get. Having this fact in mind, let us go over the duties which a gang boss in charge, say, of lathes or planers, is called upon to perform, and note the knowledge and qualities which they call for. First. He must be a good machinist—and this alone calls for years of special training, and limits the choice to a comparatively small class of men.

Second. He must be able to read drawings readily, and have sufficient imagination to see the work in its finished state clearly before him. This calls for at least a certain amount of brains and education.

Third. He must plan ahead and see that the right jigs, clamps, and appliances, as well as proper cutting tools, are on hand, and are used to set the work correctly in the machine and cut the metal at the right speed and feed. This calls for the ability to concentrate the mind upon a multitude of small details, and take pains with little, uninteresting things.

Fourth. He must see that each man keeps his machine clean and in good order. This calls for the example of a man who is naturally neat and orderly himself.

Fifth. He must see that each man turns out work of the proper quality. This calls for the conservative judgment and the honesty which are the qualities of a good inspector.

Sixth. He must see that the men under him work steadily and fast. To accomplish this he should himself be a hustler, a man of energy, ready to pitch in and infuse life into his men by working faster than they do, and this quality is rarely combined with the painstaking care, the neatness and the conservative judgment demanded as the third, fourth, and fifth requirements of a gang boss.

Seventh. He must constantly look ahead over the whole field of work and see that the parts go to the machines in their proper sequence, and that the right job gets to each machine.

Eighth. He must, at least in a general way, supervise the timekeeping and fix piece work rates. Both the seventh and eighth duties call for a certain amount of clerical work and ability, and this class of work is almost always repugnant to the man suited to active executive work, and difficult for him to do; and the rate-fixing alone requires the whole time and careful study of a man especially suited to its minute detail.

Ninth. He must discipline the men under him, and readjust their wages; and these duties call for judgment, tact, and judicial fairness.

It is evident, then, that the duties which the ordinary gang boss is called upon to perform would demand of him a large proportion of the nine attributes mentioned above; and if such a man could be found he should be made manager or superintendent of a works instead of gang boss. However, bearing in mind the fact that plenty of men can be had who combine four or five of these attributes, it becomes evident that the work of management should be so subdivided that the various positions can be filled by men of this caliber, and a great part of the art of management undoubtedly lies in planning the work in this way. This can, in the judgment of the writer, be best accomplished by abandoning the military type of organization and introducing two broad and sweeping changes in the art of management:

(a) As far as possible the workmen, as well as the gang bosses and foremen, should be entirely relieved of the work of planning, and of all work which is more or less clerical in its nature. All possible brain work should be removed from the shop and centered in the planning or laying-out department, leaving for the foremen and gang bosses work strictly executive in its nature. Their duties should be to see that the operations planned and directed from the planning room are promptly carried out in the shop. Their time should be spent with the men, teaching them to think ahead, and leading and instructing them in their work.

(b) Throughout the whole field of management the military type of organization should be abandoned, and what may be called the' "functional type" substituted in its place. "Functional management" consists in so dividing the work of management that each man from the assistant superintendent down shall have as few functions as possible to perform. If practicable the work of each man in the management should be confined to the performance of a single leading function. Under the ordinary or military type, the workmen are divided into groups. The men in each group receive their orders from one man only, the foreman or gang boss of that group. This man is the single agent through which the various functions of the management are brought into contact with the men. Certainly the most marked outward characteristic of functional management lies in the fact that each workman, instead of coming in direct contact with the management at one point only, namely, through his gang boss, receives his daily orders and help directly from eight different bosses, each of whom performs his own particular function. Four of these bosses are in the planning room and of these three send their orders to and receive their returns from the men, usually in writing. Four others are in the shop and personally help the men in their work, each boss helping in his own particular 'line or function only. Some of these bosses come in contact with each man only once or twice a day and then for a few minutes perhaps, while others are with the men all the time, and help each man frequently. The functions of one or two of these bosses require them to come in contact with each workman for so short a time each day that they can perform their particular duties perhaps for all of the men in the shop, and in their line they manage the entire shop. Other bosses are called upon to help their men so much and so often that each boss can perform his function for but a few men, and in this particular line a number of bosses are required, all performing the same function but each having his particular group of men to help. Thus the grouping of the men in the shop is entirely changed, each workman belonging to eight different groups according to the particular functional boss whom he happens to be working under at the moment.

The following is a brief description of the duties of the four types of executive functional bosses which the writer has found it profitable to use in the active work of the shop: (1) gang bosses, (2) speed bosses, (3) inspectors, and (4) repair bosses.

The gang boss has charge of the preparation of all work up to the time that the piece is set in the machine. It is his duty to see that every man under him has at all times at least one piece of work ahead at his machine, with all the jigs, templates, drawings, driving mechanism, sling chains, etc., ready to go into his machine as soon as the piece he is actually working on is done. The gang boss must show his men how to set their work in their machines in the quickest time, and see that they do it. He is responsible for the work being accurately and quickly set, and should be not only able but willing to pitch in himself and show the men how to set the work in record time.

The speed boss must see that the proper cutting tools are used for each piece of work, that the work is properly driven, that the cuts are started in the right part of the piece, and that the best speeds and feeds and depth of cut are used. His work begins only after the piece is in the lathe or planer, and ends when the actual machining ends. The speed boss must not only advise his men how best to do this work, but he must see that they do it in the quickest time, and that they use the speeds and feeds and depth of cut as directed on the instruction card In many cases he is called upon to demonstrate that the work can be done in the specified time by doing it himself in the presence of his men.

The inspector is responsible for the quality of the work, and both the workmen and speed bosses must see that the work is all finished to suit him. This man can, of course, do his work best if he is a master of the art of finishing work both well and quickly.

The repair boss sees that each workman keeps his machine clean, free from rust and scratches, and that he oils and treats it properly, and that all of the standards established for the care and maintenance of the machines and their accessories are rigidly maintained, such as care of belts and shifters, cleanliness of floor around machines, and orderly piling and disposition of work.

The following is an outline of the duties of the four functional bosses who are located in the planning room, and who in their various functions represent the department in its connection with the men. The first three of these send their directions to and receive their returns from the men, mainly in writing. These four representatives of the planning department are, the (1) order of work and route clerk, (2) instruction card clerk, (3) time and cost clerk, and (4) shop disciplinarian.

Order of Work and Route Clerk. After the route clerk in the planning department has laid out the exact route which each piece of work is to travel through the shop from machine to machine in order that it may be finished at the time it is needed for assembling, and the work done in the most economical way, the order of work clerk daily writes lists instructing the workmen and also all of the executive shop bosses as to the exact order in which the work is to be done by each class of machines or men, and these lists constitute the chief means for directing the workmen in this particular function.

Instruction Card Clerks. The "instruction card," as its name indicates, is the chief means employed by the planning department for instructing both the executive bosses and the men in all of the details of their work. It tells them briefly the general and detail drawing to refer to, the piece number and the cost order number to charge the work to, the special jigs, fixtures, or tools to use, where to start each cut, the exact depth of each cut, and how many cuts to take, the speed and feed to be used for each cut, and the time within which each operation must be finished. It also informs them as to the piece rate, the differential rate, or the premium to be paid for completing the task within the specified time (according to the system employed); and further, when necessary, refers them by name to the man who will give them especial directions. This instruction card is filled in by one or more members of the planning department, according to the nature and complication of the instructions, and bears the same relation to the planning room that the drawing does to the drafting room. The man who sends it into the shop and who, in case difficulties are met with in carrying out the instructions, sees that the proper man sweeps these difficulties away, is called the instruction card foreman.

Time and Cost Clerk. This man sends to the men through the "time ticket" all the information they need for recording their time and the cost of the work, and secures proper returns from them. He refers these for entry to the cost and time record clerks in the planning room.

Shop Disciplinarian. In case of insubordination or impudence, repeated failure to do their duty, lateness or unexcused absence, the shop disciplinarian takes the workman or bosses in hand and applies the proper remedy. He sees that a complete record of each man's virtues and defects is kept. This man should also have much to do with readjusting the wages of the workmen. At the very least, he should invariably be consulted before any change is made. One of his important functions should be that of peace-maker.

Thus, under functional foremanship, we see that the work which, under the military type of organization, was done by the single gang boss, is subdivided among eight men: (1) route clerks, (2) instruction card clerks, (3) cost and time clerks, who plan and give directions from the planning room; (4) gang bosses, (5) speed bosses, (6) inspectors, (7) repair bosses, who show the men how to carry out their instructions, and see that the work is done at the proper speed; and (8) the shop disciplinarian, who performs this function for the entire establishment.

The greatest good resulting from this change is that it becomes possible in a comparatively short time to train bosses who can really and fully perform the functions demanded of them, while under the old system it took years to train men who were after all able to thoroughly perform only a portion of their duties. A glance at the nine qualities needed for a well rounded man and then at the duties of these functional foremen will show that each of these men requires but a limited number of the nine qualities in order to successfully fill his position; and that the special knowledge which he must acquire forms only a small part of that needed by the old style gang boss. The writer has seen men taken (some of them from the ranks of the workmen, others from the old style bosses and others from among the graduates of industrial schools, technical schools and colleges) and trained to become efficient functional foremen in from six to eighteen months. Thus it becomes possible with functional foremanship to thoroughly and completely equip even a new company starting on a large scale with competent officers in a reasonable time, which is entirely out of the question under the old system. Another great advantage resulting from functional or divided foremanship is that it becomes entirely practicable to apply the four leading principles of management to the bosses as well as to the workmen. Each foreman can have a task assigned him which is so accurately measured that he will be kept fully occupied and still will daily be able to perform his entire function. This renders it possible to pay him high wages when he is successful by giving him a premium similar to that offered the men and leave him with low pay when he fails.

The full possibilities of functional foremanship, however, will not have been realized until almost all of the machines in the shop are run by men who are of smaller calibre and attainments, and who are therefore cheaper than those required under the old system. The adoption of standard tools, appliances, and methods throughout the shop, the planning done in the planning room and the detailed instructions sent them from this department, added to the direct help received from the four executive bosses, permit the use of comparatively cheap men even on complicated work. Of the men in the machine shop of the Bethlehem Steel Company engaged in running the roughing machines, and who were working under the bonus system when the writer left them, about 95 per cent were handy men trained up from laborers. And on the finishing machines, working on bonus, about 25 per cent were handy men.

To fully understand the importance of the work which was being done by these former laborers, it must be borne in mind that a considerable part of their work was very large and expensive. The forgings which they were engaged in roughing and finishing weighed frequently many tons. Of course they were paid more than laborer's wages, though not as much as skilled machinists. The work in this shop was most miscellaneous in its nature.

Functional foremanship is already in limited use in many of the best managed shops. A number of managers have seen the practical good that arises from allowing two or three men especially trained in their particular lines to deal directly with the men instead of at second hand through the old style gang boss as a mouthpiece. So deep rooted, however, is the conviction that the very foundation of management rests in the military type as represented by the principle that no workman can work under two bosses at the same time, that all of the managers who are making limited use of the functional plan seem to feel it necessary to apologize for or explain away their use of it; as not really in this particular case being a violation of that principle. The writer has never yet found one, except among the works which he had assisted in organizing, who came out squarely and acknowledged that he was using functional foremanship because it was the right principle.

The writer introduced five of the elements of functional foremanship into the management of the small machine shop of the Midvale Steel Company of Philadelphia while he was foreman of that shop in 1882-1883: (1) the instruction card clerk, (2) the time clerk, (3) the inspector, (4) the gang boss, and (5) the shop disciplinarian. Each of these functional foremen dealt directly with the workmen instead of giving their orders through the gang boss. The dealings of the instruction card clerk and time clerk with the workmen were mostly in writing, and the writer himself performed the functions of shop disciplinarian, so that it was not until he introduced the inspector, with orders to go straight to the men instead of to the gang boss, that he appreciated the desirability of functional foremanship as a distinct principle in management. The prepossession in favor of the military type was so strong with the managers and owners of Midvale that it was not until years after functional foremanship was in continual use in this shop that he dared to advocate it to his superior officers as the correct principle.

Until very recently in his organization of works he has found it best to first introduce five or six of the elements of functional foremanship quietly, and get them running smoothly in a shop before calling attention to the principle involved. When the time for this announcement comes, it invariably acts as the proverbial red rag on the bull. It was some years later that the writer subdivided the duties of the "old gang boss" who spent his whole time with the men into the four functions of (1) speed boss, (2) repair boss, (3) inspector, and (4) gang boss, and it is the introduction of these four shop bosses directly helping the men (particularly that of the speed boss) in place of the single old boss, that has produced the greatest improvement in the shop.

When functional foremanship is introduced in a large shop, it is desirable that all of the bosses who are performing the same function should have their own foreman over them; for instance, the speed bosses should have a speed foreman over them, the gang bosses, a head gang boss; the inspectors, a chief inspector, etc., etc. The functions of these over-foremen are twofold. The first part of their work is to teach each of the bosses under them the exact nature of his duties, and at the start, also to nerve and brace them up to the point of insisting that the workmen shall carry out the orders exactly as specified on the instruction cards. This is a difficult task at first, as the workmen have been accustomed for years to do the details of the work to suit themselves, and many of them are intimate friends of the bosses and believe they know quite as much about their business as the latter. The second function of the over-foreman is to smooth out the difficulties which arise between the different types of bosses who in turn directly help the men. The speed boss, for instance, always follows after the gang boss on any particular job in taking charge of the workmen. In this way their respective duties come in contact edgeways, as it were, for a short time, and at the start there is sure to be more or less friction between the two. If two of these bosses meet with a difficulty which they cannot settle, they send for their respective over-foremen, who are usually able to straighten it out. In case the latter are unable to agree on the remedy, the case is referred by them to the assistant superintendent, whose duties, for a certain time at least, may consist largely in arbitrating such difficulties and thus establishing the unwritten code of laws by which the shop is governed. This serves as one example of what is called the "exception principle" in management, which is referred to later.

Before leaving this portion of the subject the writer wishes to call attention to the analogy which functional foremanship bears to the management of a large, up-to-date school. In such a school the children are each day successively taken in hand by one teacher after another who is trained in his particular specialty, and they are in many cases disciplined by a man particularly trained in this function. The old style, one teacher to a class plan is entirely out of date.

The writer has found that better results are attained by placing the planning department in one office, situated, of course, as close to the center of the shop or shops as practicable, rather than by locating its members in different places according to their duties. This department performs more or less the functions of a clearing house. In doing their various duties, its members must exchange information frequently, and since they send their orders to and receive their returns from the men in the shop, principally in writing, simplicity calls for the use, when possible, of a single piece of paper for each job for conveying the instructions of the different members of the planning room to the men and another similar paper for receiving the returns from the men to the department. Writing out these orders and acting promptly on receipt of the returns and recording same requires the members of the department to be close together. The large machine shop of the Bethlehem Steel Company was more than a quarter of a mile long, and this was successfully run from a single planning room situated close to it. The manager, superintendent, and their assistants should, of course, have their offices adjacent to the planning room and, if practicable, the drafting room should be near at hand, thus bringing all of the planning and purely brain work of the establishment close together. The advantages of this concentration were found to be so great at Bethlehem that the general offices of the company, which were formerly located in the business part of the town, about a mile and a half away, were moved into the middle of the works adjacent to the planning room.

The shop, and indeed the whole works, should be managed, not by the manager, superintendent, or foreman, but by the planning department. The daily routine of running the entire works should be carried on by the various functional elements of this department, so that, in theory at least, the works could run smoothly even if the manager, superintendent and their assistants outside the planning room were all to be away for a month at a time.

The following are the leading functions of the planning department:

(a) The complete analysis of all orders for machines or work taken by the company.

(b) Time study for all work done by hand throughout the works, including that done in setting the work in machines, and all bench, vise work and transportation, etc.

(c) Time study for all operations done by the various machines.

(d) The balance of all materials, raw materials, stores and finished parts, and the balance of the work ahead for each class of machines and workmen.

(e) The analysis of all inquiries for new work received in the sales department and promises for time of delivery.

(f) The cost of all items manufactured with complete expense analysis and complete monthly comparative cost and expense exhibits.

(g) The pay department.

(h) The mnemonic symbol system for identification of parts and for charges.

(i) Information bureau.

(j) Standards.

(k) Maintenance of system and plant, and use of the tickler.

(l) Messenger system and post office delivery.

(m) Employment bureau.

(n) Shop disciplinarian.

(o) A mutual accident insurance association.

(p) Rush order department.

(q) Improvement of system or plant.

These several functions may be described more in detail as follows:

(a) THE COMPLETE ANALYSIS OF ALL ORDERS FOR MACHINES OR WORK TAKEN BY THE COMPANY.

This analysis should indicate the designing and drafting required, the machines or parts to be purchased and all data needed by the purchasing agent, and as soon as the necessary drawings and information come from the drafting room the lists of patterns, castings and forgings to be made, together with all instructions for making them, including general and detail drawing, piece number, the mnemonic symbol belonging to each piece (as referred to under (h) below) a complete analysis of the successive operations to be done on each piece, and the exact route which each piece is to travel from place to place in the works.

(b) TIME STUDY FOR ALL WORK DONE BY HAND THROUGHOUT THE WORKS, INCLUDING THAT DONE IN SETTING THE WORK IN MACHINES, AND ALL BENCH AND VISE WORK, AND TRANSPORTATION, ETC.

This information for each particular operation should be obtained by summing up the various unit times of which it consists. To do this, of course, requires the men performing this function to keep continually posted as to the best methods and appliances to use, and also to frequently consult with and receive advice from the executive gang bosses who carry out this work in the shop, and from the man in the department of standards and maintenance of plant (j) beneath. The actual study of unit times, of course, forms the greater part of the work of this section of the planning room.

(c) TIME STUDY FOR ALL OPERATIONS DONE BY THE VARIOUS MACHINES.

This information is best obtained from slide rules, one of which is made for each machine tool or class of machine tools throughout the works; one, for instance, for small lathes of the same type, one for planers of same type, etc. These slide rules show the best way to machine each piece and enable detailed directions to be given the workman as to how many cuts to take, where to start each cut, both for roughing out work and finishing it, the depth of the cut, the best feed and speed, and the exact time required to do each operation.

The information obtained through function (b), together with that obtained through (c) afford the basis for fixing the proper piece rate, differential rate or the bonus to be paid, according to the system employed.

(d) THE BALANCE OF ALL MATERIALS, RAW MATERIALS, STORES AND FINISHED PARTS, AND THE NUMBER OF DAYS' WORK AHEAD FOR EACH CLASS OF MACHINES AND WORKMEN.

Returns showing all receipts, as well as the issue of all raw materials, stores, partly finished work, and completed parts and machines, repair parts, etc., daily pass through the balance clerk, and each item of which there have been issues or receipts, or which has been appropriated to the use of a machine about to be manufactured, is daily balanced. Thus the balance clerk can see that the required stocks of materials are kept on hand by notifying at once the purchasing agent or other proper party when the amount on hand falls below the prescribed figure. The balance clerk should also keep a complete running balance of the hours of work ahead for each class of machines and workmen, receiving for this purpose daily from (a), (b), and (c) above statements of the hours of new work entered, and from the inspectors and daily time cards a statement of the work as it is finished. He should keep the manager and sales department posted through daily or weekly condensed reports as to the number of days of work ahead for each department, and thus enable them to obviate either a congestion or scarcity of work.

(e) THE ANALYSIS OF ALL INQUIRIES FOR NEW WORK RECEIVED IN THE SALES DEPARTMENT AND PROMISES AS TO TIME OF DELIVERY. The man or men in the planning room who perform the duties indicated at (a) above should consult with (b) and (c) and obtain from them approximately the time required to do the work inquired for, and from (d) the days of work ahead for the various machines and departments, and inform the sales department as to the probable time required to do the work and the earliest date of delivery.

(f) THE COST OF ALL ITEMS MANUFACTURED, WITH COMPLETE EXPENSE ANALYSIS AND COMPLETE MONTHLY COMPARATIVE COST AND EXPENSE EXHIBITS.

The books of the company should be closed once a month and balanced as completely as they usually are at the end of the year, and the exact cost of each article of merchandise finished during the previous month should be entered on a comparative cost sheet. The expense exhibit should also be a comparative sheet. The cost account should be a completely balanced account, and not a memorandum account as it generally is. All the expenses of the establishment, direct and indirect, including the administration and sales expense, should be charged to the cost of the product which is to be sold.

(g) THE PAY DEPARTMENT.

The pay department should include not only a record of the time and wages and piece work earnings of each man, and his weekly or monthly payment, but the entire supervision of the arrival and departure of the men from the works and the various checks needed to insure against error or cheating. It is desirable that some one of the "exception systems" of time keeping should be used.

(h) THE MNEMONIC SYMBOL SYSTEM FOR IDENTIFICATION OF PARTS AND FOR CHARGES.

Some one of the mnemonic symbol systems should be used instead of numbering the parts or orders for identifying the various articles of manufacture, as well as the operations to be performed on each piece and the various expense charges of the establishment. This becomes a matter of great importance when written directions are sent from the planning room to the men, and the men make their returns in writing. The clerical work and chances for error are thereby greatly diminished.

(i) INFORMATION BUREAU.

The information bureau should include catalogues of drawings (providing the drafting room is close enough to the planning room) as well as all records and reports for the whole establishment. The art of properly indexing information is by no means a simple one, and as far as possible it should be centered in one man.

(j) STANDARDS.

The adoption and maintenance of standard tools, fixtures, and appliances down to the smallest item throughout the works and office, as well as the adoption of standard methods of doing all operations which are repeated, is a matter of importance, so that under similar conditions the same appliances and methods shall be used throughout the plant. This is an absolutely necessary preliminary to success in assigning daily tasks which are fair and which can be carried out with certainty.

(k) MAINTENANCE OF SYSTEM AND PLANT, AND USE OF THE TICKLER.

One of the most important functions of the planning room is that of the maintenance of the entire system, and of standard methods and appliances throughout the establishment, including the planning room itself. An elaborate time table should be made out showing daily the time when and place where each report is due, which is necessary to carry on the work and to maintain the system. It should be the duty of the member of the planning room in charge of this function to find out at each time through the day when reports are due, whether they have been received, and if not, to keep bothering the man who is behind hand until he has done his duty. Almost all of the reports, etc., going in and out of the planning room can be made to pass through this man. As a mechanical aid to him in performing his function the tickler is invaluable. The best type of tickler is one which has a portfolio for each day in the year, large enough to insert all reminders and even quite large instruction cards and reports without folding. In maintaining methods and appliances, notices should be placed in the tickler in advance, to come out at proper intervals throughout the year for the inspection of each element of the system and the inspection and overhauling of all standards as well as the examination and repairs at stated intervals of parts of machines, boilers, engines, belts, etc., likely to wear out or give trouble, thus preventing breakdowns and delays. One tickler can be used for the entire works and is preferable to a number of individual ticklers. Each man can remind himself of his various small routine duties to be performed either daily or weekly, etc., and which might be otherwise overlooked, by sending small reminders, written on slips of paper, to be placed in the tickler and returned to him at the proper time. Both the tickler and a thoroughly systematized messenger service should be immediately adjacent to this man in the planning room, if not directly under his management.

The proper execution of this function of the planning room will relieve the superintendent of some of the most vexatious and time-consuming of his duties, and at the same time the work will be done more thoroughly and cheaper than if he does it himself. By the adoption of standards and the use of instruction cards for overhauling machinery, etc., and the use of a tickler as above described, the writer reduced the repair force of the Midvale Steel Works to one-third its size while he was in the position of master mechanic. There was no planning department, however, in the works at that time.

(l) MESSENGER SYSTEM AND POST OFFICE DELIVERY.

The messenger system should be thoroughly organized and records kept showing which of the boys are the most efficient. This should afford one of the best opportunities for selecting boys fit to be taught trades, as apprentices or otherwise. There should be a regular half hourly post office delivery system for collecting and distributing routine reports and records and messages in no especial hurry throughout the works.

(m) EMPLOYMENT BUREAU.

The selection of the men who are employed to fill vacancies or new positions should receive the most careful thought and attention and should be under the supervision of a competent man who will inquire into the experience and especial fitness and character of applicants and keep constantly revised lists of men suitable for the various positions in the shop. In this section of the planning room. an individual record of each of the men in the works can well be kept showing his punctuality, absence without excuse, violation of shop rules, spoiled work or damage to machines or tools, as well as his skill at various kinds of work; average earnings, and other good qualities for the use of this department as well as the shop disciplinarian.

(n) THE SHOP DISCIPLINARIAN.

This man may well be closely associated with the employment bureau and, if the works is not too large, the two functions can be performed by the same man. The knowledge of character and of the qualities needed for various positions acquired in disciplining the men should be useful in selecting them for employment. This man should, of course, consult constantly with the various foremen and bosses, both in his function as disciplinarian arid in the employment of men.

(o) A MUTUAL ACCIDENT INSURANCE ASSOCIATION.

A mutual accident insurance association should be established, to which the company contributes as well as the men. The object of this association is twofold: first the relief of men who are injured, and second, an opportunity of returning to the workmen all fines which are imposed upon them in disciplining them, and for damage to company's property or work spoiled.

(p) RUSH ORDER DEPARTMENT.

Hurrying through parts which have been spoiled or have developed defects, and also special repair orders for customers, should receive the attention of one man.

(q) IMPROVEMENT OF SYSTEM OR PLANT.

One man should be especially charged with the work of improvement in the system and in the running of the plant.

The type of organization described in the foregoing paragraphs has such an appearance of complication and there are so many new positions outlined in the planning room which do not exist even in a well managed establishment of the old school, that it seems desirable to again call attention to the fact that, with the exception of the study of unit times and one or two minor functions, each item of work which is performed in the planning room with the superficial appearance of great complication must also be performed by the workmen in the shop under the old type of management, with its single cheap foreman and the appearance of great simplicity. In the first case, however, the work is done by an especially trained body of men who work together like a smoothly running machine, and in the second by a much larger number of men very poorly trained and ill-fitted for this work, and each of whom while doing it is taken away from some other job for which he is well trained. The work which is now done by one sewing machine, intricate in its appearance, was formerly done by a number of women with no apparatus beyond a simple needle and thread.

There is no question that the cost of production is lowered by separating the work of planning and the brain work as much as possible from the manual labor. When this is done, however, it is evident that the brain workers must be given sufficient work to keep them fully busy all the time. They must not be allowed to stand around for a considerable part of their time waiting for their particular kind of work to come along, as is so frequently the case.

The belief is almost universal among manufacturers that for economy the number of brain workers, or non-producers, as they are called, should be as small as possible in proportion to the number of producers, i.e., those who actually work with their hands. An examination of the most successful establishments will, however, show that the reverse is true. A number of years ago the writer made a careful study of the proportion of producers to non-producers in three of the largest and most successful companies in the world, who were engaged in doing the same work in a general way. One of these companies was in France, one in Germany, and one in the United States. Being to a certain extent rivals in business and situated in different countries, naturally neither one had anything to do with the management of the other. In the course of his investigation, the writer found that the managers had never even taken the trouble to ascertain the exact proportion of non-producers to producers in their respective works; so that the organization of each company was an entirely independent evolution.

By non-producers the writer means such employees as all of the general officers, the clerks, foremen, gang bosses, watchmen, messenger boys, draftsmen, salesmen, etc.; and by "producers," only those who actually work with their hands.

In the French and German works there was found to be in each case one non-producer to between six and seven producers, and in the American works one non-producer to about seven producers. The writer found that in the case of another works, doing the same kind of business and whose management was notoriously bad, the proportion of non-producers to producers was one non-producer to about eleven producers. These companies all had large forges, foundries, rolling mills and machine shops turning out a miscellaneous product, much of which was machined. They turned out a highly wrought, elaborate and exact finished product, and did an extensive engineering and miscellaneous machine construction business.

In the case of a company doing a manufacturing business with a uniform and simple product for the maximum economy, the number of producers to each non-producer would of course be larger. No manager need feel alarmed then when he sees the number of non-producers increasing in proportion to producers, providing the non-producers are busy all of their time, and providing, of course, that in each case they are doing efficient work.

It would seem almost unnecessary to dwell upon the desirability of standardizing, not only all of the tools, appliances and implements throughout the works and office, but also the methods to be used in the multitude of small operations which are repeated day after day. There are many good managers of the old school, however, who feel that this standardization is not only unnecessary but that it is undesirable, their principal reason being that it is better to allow each workman to develop his individuality by choosing the particular implements and methods which suit him best. And there is considerable weight in this contention when the scheme of management is to allow each workman to do the work as he pleases and hold him responsible for results. Unfortunately, in ninety-nine out of a hundred such cases only the first part of this plan is carried out. The workman chooses his own methods and implements, but is not held in any strict sense accountable unless the quality of the work is so poor or the quantity turned out is so small as to almost amount to a scandal. In the type of management advocated by the writer, this complete standardization of all details and methods is not only desirable but absolutely indispensable as a preliminary to specifying the time in which each operation shall be done, and then insisting that it shall be done within the time allowed.

Neglecting to take the time and trouble to thoroughly standardize all of such methods and details is one of the chief causes for setbacks and failure in introducing this system. Much better results can be attained, even if poor standards be adopted, than can be reached if some of a given class of implements are the best of their kind while others are poor. It is uniformity that is required. Better have them uniformly second class than mainly first with some second and some third class thrown in at random. In the latter case the workmen will almost always adopt the pace which conforms to the third class instead of the first or second. In fact, however, it is not a matter involving any great expense or time to select in each case standard implements which shall be nearly the best or the best of their kinds. The writer has never failed to make enormous gains in the economy of running by the adoption of standards.

It was in the course of making a series of experiments with various air hardening tool steels with a view to adopting a standard for the Bethlehem works that Mr. J. Maunsel White, together with the writer, discovered the Taylor-White process of treating tool steel, which marks a distinct improvement in the art. The fact that this improvement was made not by manufacturers of tool steel, but in the course of the adoption of standards, shows both the necessity and fruitfulness of methodical and careful investigation in the choice of much neglected details. The economy to be gained through the adoption of uniform standards is hardly realized at all by the managers of this country. No better illustration of this fact is needed than that of the present condition of the cutting tools used throughout the machine shops of the United States. Hardly a shop can be found in which tools made from a dozen different qualities of steel are not used side by side, in many cases with little or no means of telling one make from another; and in addition, the shape of the cutting edge of the tool is in most cases left to the fancy of each individual workman. When one realizes that the cutting speed of the best treated air hardening steel is for a given depth of cut, feed and quality of metal being cut, say sixty feet per minute, while with the same shaped tool made from the best carbon tool steel and with the same conditions, the cutting speed will be only twelve feet per minute, it becomes apparent how little the necessity for rigid standards is appreciated.

Let us take another illustration. The machines of the country are still driven by belting. The motor drive, while it is coming, is still in the future. There is not one establishment in one hundred that does not leave the care and tightening of the belts to the judgment of the individual who runs the machine, although it is well known to all who have given any study to the subject that the most skilled machinist cannot properly tighten a belt without the use of belt clamps fitted with spring balances to properly register the tension. And the writer showed in a paper entitled "Notes on Belting" presented to The American Society of Mechanical Engineers in 1893, giving the results of an experiment tried on all of the belts in a machine shop and extending through nine years, in which every detail of the care and tightening and tension of each belt was recorded, that belts properly cared for according to a standard method by a trained laborer would average twice the pulling power and only a fraction of the interruptions to manufacture of those tightened according to the usual methods. The loss now going on throughout the country from failure to adopt and maintain standards for all small details is simply enormous.

It is, however, a good sign for the future that a firm such as Messrs. Dodge & Day of Philadelphia, who are making a specialty of standardizing machine shop details, find their time fully occupied.

What may be called the "exception principle" in management is coming more and more into use, although, like many of the other elements of this art, it is used in isolated cases, and in most instances without recognizing it as a principle which should extend throughout the entire field. It is not an uncommon sight, though a sad one, to see the manager of a large business fairly swamped at his desk with an ocean of letters and reports, on each of which he thinks that he should put his initial or stamp. He feels that by having this mass of detail pass over his desk he is keeping in close touch with the entire business. The exception principle is directly the reverse of this. Under it the manager should receive only condensed, summarized, and invariably comparative reports, covering, however, all of the elements entering into the management, and even these summaries should all be carefully gone over by an assistant before they reach the manager, and have all of the exceptions to the past averages or to the standards pointed out, both the especially good and especially bad exceptions, thus giving him in a few minutes a full view of progress which is being made, or the reverse, and leaving him free to consider the broader lines of policy and to study the character and fitness of the important men under him. The exception principle can be applied in many ways, and the writer will endeavor to give some further illustrations of it later.

The writer has dwelt at length upon the desirability of concentrating as much as possible clerical and brain work in the planning department. There is, however, one such important exception to this rule that it would seem desirable to call attention to it. As already stated, the planning room gives its orders and instructions to the men mainly in writing and of necessity must also receive prompt and reliable written returns and reports which shall enable its members to issue orders for the next movement of each piece, lay out the work for each man for the following day, properly post the balance of work and materials accounts, enter the records on cost accounts and also enter the time and pay of each man on the pay sheet. There is no question that all of this information can be given both better and cheaper by the workman direct than through the intermediary of a walking time keeper, providing the proper instruction and report system has been introduced in the works with carefully ruled and printed instruction and return cards, and particularly providing a complete mnemonic system of symbols has been adopted so as to save the workmen the necessity of doing much writing. The principle to which the writer wishes to call particular attention is that the only way in which workmen can be induced to write out all of this information accurately and promptly is by having each man write his own time while on day work and pay when on piece work on the same card on which he is to enter the other desired information, and then refusing to enter his pay on the pay sheet until after all of the required information has been correctly given by him. Under this system as soon as a workman completes a job and at quitting time, whether the job is completed or not, he writes on a printed time card all of the information needed by the planning room in connection with that job, signs it and forwards it at once to the planning room. On arriving in the planning room each time card passes through the order of work or route clerk, the balance clerk, the cost clerk, etc., on its way to the pay sheet, and unless the workman has written the desired information the card is sent back to him, and he is apt to correct and return it promptly so as to have his pay entered up. The principle is clear that if one wishes to have routine clerical work done promptly and correctly it should somehow be attached to the pay card of the man who is to give it. This principle, of course, applies to the information desired from inspectors, gang bosses and others as well as workmen, and to reports required from various clerks. In the case of reports, a pay coupon can be attached to the report which will be detached and sent to the pay sheet as soon as the report has been found correct.

Before starting to make any radical changes leading toward an improvement in the system of management, it is desirable, and for ultimate success in most cases necessary, that the directors and the important owners of an enterprise shall be made to understand, at least in a general way, what is involved in the change. They should be informed of the leading objects which the new system aims at, such, for instance, as rendering mutual the interests of employer and employee through "high wages and low labor cost," the gradual selection and development of a body of first class picked workmen who will work extra hard and receive extra high wages and be dealt with individually instead of in masses. They should thoroughly understand that this can only be accomplished through the adoption of precise and exact methods, and having each smallest detail, both as to methods and appliances, carefully selected so as to be the best of its kind. They should understand the general philosophy of the system and should see that, as a whole, it must be in harmony with its few leading ideas, and that principles and details which are admirable in one type of management have no place whatever in another. They should be shown that it pays to employ an especial corps to introduce a new system just as it pays to employ especial designers and workmen to build a new plant; that, while a new system is being introduced, almost twice the number of foremen are required as are needed to run it after it is in; that all of this costs money, but that, unlike a new plant, returns begin to come in almost from the start from improved methods and appliances as they are introduced, and that in most cases the new system more than pays for itself as it goes along; that time, and a great deal of time, is involved in a radical change in management, and that in the case of a large works if they are incapable of looking ahead and patiently waiting for from two to four years, they had better leave things just as they are, since a change of system involves a change in the ideas, point of view and habits of many men with strong convictions and prejudices, and that this can only be brought about slowly and chiefly through a series of object lessons, each of which takes time, and through continued reasoning; and that for this reason, after deciding to adopt a given type, the necessary steps should be taken as fast as possible, one after another, for its introduction. The directors should be convinced that an increase m the proportion of non-producers to producers means increased economy and not red tape, providing the non-producers are kept busy at their respective functions. They should be prepared to lose some of their valuable men who cannot stand the change and also for the continued indignant protest of many of their old and trusted employees who can see nothing but extravagance in the new ways and ruin ahead. It is a matter of the first importance that, in addition to the directors of the company, all of those connected with the management should be given a broad and comprehensive view of the general objects to be attained and the means which will be employed. They should fully realize before starting on their work and should never lose sight of the fact that the great object of the new organization is to bring about two momentous changes in the men:

First. A complete revolution in their mental attitude toward their employers and their work.

Second. As a result of this change of feeling such an increase in their determination and physical activity, and such an improvement in the conditions under which the work is done as will result in many cases in their turning out from two to three times as much work as they have done in the past.

First, then, the men must be brought to see that the new system changes their employers from antagonists to friends who are working as hard as possible side by side with them, all pushing in the same direction and all helping to bring about such an increase in the output and to so cheapen the cost of production that the men will be paid permanently from thirty to one hundred per cent more than they have earned in the past, and that there will still be a good profit left over for the company. At first workmen cannot see why, if they do twice as much work as they have done, they should not receive twice the wages. When the matter is properly explained to them and they have time to think it over, they will see that in most cases the increase in output is quite as much due to the improved appliances and methods, to the maintenance of standards and to the great help which they receive from the men over them as to their own harder work. They will realize that the company must pay for the introduction of the improved system, which costs thousands of dollars, and also the salaries of the additional foremen and of the clerks, etc., in the planning room as well as tool room and other expenses and that, in addition, the company is entitled to an increased profit quite as much as the men are. All but a few of them will come to understand in a general way that under the new order of things they are cooperating with their employers to make as great a saving as possible and that they will receive permanently their fair share of this gain.

Then after the men acquiesce in the new order of things and are willing to do their part toward cheapening production, it will take time for them to change from their old easy-going ways to a higher rate of speed, and to learn to stay steadily at their work, think ahead and make every minute count. A certain percentage of them, with the best of intentions, will fail in this and find that they have no place in the new organization, while still others, and among them some of the best workers who are, however, either stupid or stubborn, can never be made to see that the new system is as good as the old; and these, too, must drop out. Let no one imagine, however, that this great change in the mental attitude of the men and the increase in their activity can be brought about by merely talking to them. Talking will be most useful—in fact indispensable—and no opportunity should be lost of explaining matters to them patiently, one man at a time, and giving them every chance to express their views.

Their real instruction, however, must come through a series of object lessons. They must be convinced that a great increase in speed is possible by seeing here and there a man among them increase his pace and double or treble his output. They must see this pace maintained until they are convinced that it is not a mere spurt; and, most important of all, they must see the men who "get there" in this way receive a proper increase in wages and become satisfied. It is only with these object lessons in plain sight that the new theories can be made to stick. It will be in presenting these object lessons and in smoothing away the difficulties so that tile high speed can be maintained, and in assisting to form public opinion in the shop, that the great efficiency of functional foremanship under the direction of the planning room will first become apparent.

In reaching the final high rate of speed which shall be steadily maintained, the broad fact should be realized that the men must pass through several distinct phases, rising from one plane of efficiency to another until the final level is reached. First they must be taught to work under an improved system of day work. Each man must learn how to give up his own particular way of doing things, adapt his methods to the many new standards, and grow accustomed to receiving and obeying directions covering details, large and small, which in the past have been left to his individual judgment. At first the workmen can see nothing in all of this but red tape and impertinent interference, and time must be allowed them to recover from their irritation, not only at this, but at every stage in their upward march. If they have been classed together and paid uniform wages for each class, the better men should be singled out and given higher wages so that they shall distinctly recognize the fact that each man is to be paid according to his individual worth. After becoming accustomed to direction in minor matters, they must gradually learn to obey instructions as to the pace at which they are to work, and grasp the idea, first, that the planning department knows accurately how long each operation should take; and second, that sooner or later they will have to work at the required speed if they expect to prosper. After they are used to following the speed instructions given them, then one at a time they can be raised to the level of maintaining a rapid pace throughout the day. And it is not until this final step has been taken that the full measure of the value of the new system will be felt by the men through daily receiving larger wages, and by the company through a materially larger output and lower cost of production. It is evident, of course, that all of the workmen in the shop will not rise together from one level to another. Those engaged in certain lines of work will have reached their final high speed while others have barely taken the first step. The efforts of the new management should not be spread out thin over the whole shop. They should rather be focused upon a few points, leaving the ninety and nine under the care of their former shepherds. After the efficiency of the men who are receiving special assistance and training has been raised to the desired level, the means for holding them there should be perfected, and they should never be allowed to lapse into their old ways. This will, of course, be accomplished in the most permanent way and rendered almost automatic, either through introducing task work with a bonus or the differential rate.

Before taking any steps toward changing methods the manager should realize that at no time during the introduction of the system should any broad, sweeping changes be made which seriously affect a large number of the workmen. It would be preposterous, for instance, in going from day to piece work to start a large number of men on piece work at the same time. Throughout the early stages of organization each change made should affect one workman only, and after the single man affected has become used to the new order of things, then change one man after another from the old system to the new, slowly at first, and rapidly as public opinion in the shop swings around under the influence of proper object lessons. Throughout a considerable part of the time, then, there will be two distinct systems of management in operation in the same shop; and in many cases it is desirable to have the men working under the new system managed by an entirely different set of foremen, etc., from those under the old.

The first step, after deciding upon the type of organization, should be the selection of a competent man to take charge of the introduction of the new system. The manager should think himself fortunate if he can get such a man at almost any price, since the task is a difficult and thankless one and but few men can be found who possess the necessary information coupled with the knowledge of men, the nerve, and the tact required for success in this work. The manager should keep himself free as far as possible from all active part in the introduction of the new system. While changes are going on it will require his entire energies to see that there is no falling off in the efficiency of the old system and that the quality and quantity of the output is kept up. The mistake which is usually made when a change in system is decided upon is that the manager and his principal assistants undertake to make all of the improvements themselves during their spare time, with the common result that weeks, months, and years go by without anything great being accomplished. The respective duties of the manager and the man in charge of improvement, and the limits of the authority of the latter should be clearly defined and agreed upon, always bearing in mind that responsibility should invariably be accompanied by its corresponding measure of authority.

The worst mistake that can be made is to refer to any part of the system as being "on trial." Once a given step is decided upon, all parties must be made to understand that it will go whether any one around the place likes it or not. In making changes in system the things that are given a "fair trial" fail, while the things that "must go," go all right.

To decide where to begin is a perplexing and bewildering problem which faces the reorganizer in management when he arrives in a large establishment. In making this decision, as in taking each subsequent step, the most important consideration, which should always be first in the mind of the reformer, is "what effect will this step have upon the workmen?" Through some means (it would almost appear some especial sense) the workman seems to scent the approach of a reformer even before his arrival in town. Their suspicions are thoroughly aroused, and they are on the alert for sweeping changes which are to be against their interests and which they are prepared to oppose from the start. Through generations of bitter experiences working men as a class have teamed to look upon all change as antagonistic to their best interests. They do not ask the object of the change, but oppose it simply as change. The first changes, therefore, should be such as to allay the suspicions of the men and convince them by actual contact that the reforms are after all rather harmless and are only such as will ultimately be of benefit to all concerned. Such improvements then as directly affect the workmen least should be started first. At the same time it must be remembered that the whole operation is of necessity so slow that the new system should be started at as many points as possible, and constantly pushed as hard as possible. In the metal working plant which we are using for purposes of illustration a start can be made at once along all of the following lines:

First. The introduction of standards throughout the works and office.

Second. The scientific study of unit times on several different kinds of work.

Third. A complete analysis of the pulling, feeding power and the proper speeding of the various machine tools throughout the place with a view of making a slide rule for properly running each machine.

Fourth. The work of establishing the system of time cards by means of which ultimately all of the desired information will be conveyed from the men to the planning room.

Fifth. Overhauling the stores issuing and receiving system so as to establish a complete running balance of materials.

Sixth. Ruling and printing the various blanks that will be required for shop returns and reports, time cards, instruction cards, expense sheets, cost sheets, pay sheet, and balance records; storeroom; tickler; and maintenance of standards, system, and plant, etc.; and starting such functions of the planning room as do not directly affect the men.

If the works is a large one, the man in charge of introducing the system should appoint a special assistant in charge of each of the above functions just as an engineer designing a new plant would start a number of draftsmen to work upon the various elements of construction. Several of these assistants will be brought into close contact with the men, who will in this way gradually get used to seeing changes going on and their suspicion, both of the new men and the methods, will have been allayed to such an extent before any changes which seriously affect them are made, that little or no determined opposition on their part need be anticipated. The most important and difficult task of the organizer will be that of selecting and training the various functional foremen who are to lead and instruct the workmen, and his success will be measured principally by his ability to mold and reach these men. They cannot be found, they must be made. They must be instructed in their new functions largely, in the beginning at least, by the organizer himself; and this instruction, to be effective, should be mainly in actually doing the work. Explanation and theory Will go a little way, but actual doing is needed to carry conviction. To illustrate: For nearly two and one-half years in the large shop of the Bethlehem Steel Company, one speed boss after another was instructed in the art of cutting metals fast on a large motor-driven lathe which was especially fitted to run at any desired speed within a very wide range. The work done in this machine was entirely connected, either with the study of cutting tools or the instruction of speed bosses. It was most interesting to see these men, principally either former gang bosses or the best workmen, gradually change from their attitude of determined and positive opposition to that in most cases of enthusiasm for, and earnest support of, the new methods. It was actually running the lathe themselves according to the new method and under the most positive and definite orders that produced the effect. The writer himself ran the lathe and instructed the first few bosses. It required from three weeks to two months for each man. Perhaps the most important part of the gang boss's and foreman's education lies ill teaching them to promptly obey orders and instructions received not only from the superintendent or some official high in the company, but from any member of the planning room whose especial function it is to direct the rest of the works in his particular line; and it may be accepted as an unquestioned fact that no gang boss is fit to direct his men until after he has learned to promptly obey instructions received from any proper source, whether he likes his instructions and the instructor or not, and even although he may be convinced that he knows a much better way of doing the work. The first step is for each man to learn to obey the laws as they exist, and next, if the laws are wrong, to have them reformed in the proper way.