In order to illustrate the general principles of the Reward System, an individual case was taken and one particular relation between reward and standard times was selected—namely, 75 per cent.

The sewing on of buttons, the laying of bricks, ploughing, shipbuilding, etc., would have served just as well, and the same general results would have been obtained.

The relation between reward and standard times has given rise to much discussion and experiment, and the relation selected in Part II. is one that appeals most strongly to the worker as he gets paid for all the time he saves. If reward begins earlier and the worker gets a proportion of the time he saves instead of the whole, reward at standard time should be just the same, or nearly so. It only means that the worker has a better chance of getting a higher reward when he is below the 100 per cent. line, and a smaller one when he is above it.

The following diagrams show the relation between reward and efficiency according to the principal methods in use at the present time, some of them being used in the same factory for different classes of work. A complete diagram is illustrated on p. 88, but, for convenience, only a portion of this is used in most of the other diagrams.

It must be noted that reward at standard time must be never less than 25 per cent. of the job rate, while 30 per cent. to 35 per cent. is fairer.

In order to find the amount of reward at any efficiency, read off the efficiency on the bottom line, run a pencil along the line corresponding to this efficiency until it touches the graph, then run the pencil along horizontally until it reaches the vertical scale. Read off the percentage of reward on the vertical scale.

It will be seen at once that any efficiency below the reward point means that no reward is earned, but that there is no reduction of day wages. (The Taylor and Gantt methods are exceptions to this rule.)

The diagram on p. 88 is a descriptive one. The first column shows wages plus reward on a wage basis of 8d. per hour.

The second column shows wages plus reward on a wage basis of 10d. per hour.

The third column shows the proportion of the reward to the day wage for any efficiency, the day wage being considered 100 per cent.

The efficiencies are shown along the bottom line, and the 100 per cent. efficiency line is dotted.

Two methods of wage payment are plotted on this diagram, the full line being Reward System No. 1, and the dotted line the Taylor System.

For convenience the following diagrams are enlarged: Nos. 1, 2, 3, 4, and the Emerson diagrams consist of the rectangle ABCD, and the Taylor and Gantt diagrams consist of the rectangle EFGH. The Rowan diagram is to the same scale as the Taylor and Gantt diagrams. The relation between the vertical and horizontal scales has also been altered to make the readings clearer.

(a) Reward System No. 1.

In this method, reward begins at 62·5 per cent., and half the time saved is paid for until standard time is reached. At that point and above it two-thirds of the time saved is paid for.

Reward begins early, and increases definitely until standard time is reached. Then there is a considerable jump, and after that the reward goes on regularly at a higher rate than before.

This method is, in the opinion of the writer, the best of all reward payments, and carries out the spirit of reward principles better than any other.

The worker gets some reward, however little, and there is a direct incentive to reach 100 per cent. efficiency owing to the rapid increase of reward at that point. If he gets nothing, then he either feels ashamed of his laziness, or, what is more likely, he inquires into the reason why he has received no reward. This is just what the employer wants, as it discovers inefficiencies in connection with machinery or supplies or with other processes or routines.

At the same time, an inaccurate time study neither penalises the worker too much on the one hand, nor causes excessive reward on the other.

Yet again, the worker always gets his day rate even though his efficiency falls below the reward point.

It is eminently suitable for both employer and worker.

(b) Reward System No. 2.

In this case the reward consists of payment for half the time saved, and reaches 30 per cent. increase on the wage rate at 100 per cent. efficiency.

It is suitable for many classes of work, and neither worker nor employer suffer too much in the event of an inaccurate time study.

Reward begins early and is a direct incentive to efficiency, but there is not the same urge towards the 100 per cent. line as in the case of System No. 1. Usually there is an extra bonus given, say 5 per cent., to those reaching standard time, and this takes the form of a lump sum, so that the angle of the line of increase is not interfered with.

(c) Reward System No. 3.

Reward in this case begins at 80 per cent. efficiency and all the time saved is paid for.

It is a method suitable for high-class workers and necessitates a very accurate time study. It needs a decided effort to get reward, but once reward begins it increases rapidly. An inaccurate time study means either little or no reward if the inaccuracy results in increasing the difficulty of the job; while if it makes the job easy, then excessive rewards are earned.

There is usually an extra bonus of 10 per cent. when standard time is reached.

The system is suitable for automatic work where there cannot be a great variation in efficiency, and where the operations are to a large extent taken out of the hands of the worker.

This method of payment is now adopted by Mr. Allingham after conference with trade-union officials, as it gives the worker the whole of the time saved.

(d) Reward System No. 4.

This is a diagram illustrating the example given in the foregoing description of the reward system.

Reward begins at 75 per cent. efficiency, and when standard efficiency is reached the proportion of reward to job rate is 33? per cent. At this point a bonus of 5 per cent. is given, and the line of reward above this point is parallel to the line below it, but 5 per cent. higher.

All the time saved is paid for, and from this point of view it is more satisfactory to the worker.

Diagrams 1 to 4 are similar in principle to the Halsey bonus method, the vital difference being that Halsey bases his standard time on the average time taken under ordinary day or piece work conditions instead of on a time study.

(e) The Taylor System.

This is the system advocated by Mr. Taylor, the originator of scientific management, and hence of the Reward System.

A certain piece rate is paid until standard time is reached. At that point there is a jump to another higher rate, say from 10d. to 14d., a jump of 40 per cent. The worker gets this increase for all the work done, and the increased rate is paid on the rest of the work.

The worker makes strenuous efforts to reach 100 per cent. efficiency because of the great increase, and also because he suffers directly when he fails to obtain it.

The task set is so high that only highly skilled and rapid workers can reach it, but the reward is also high. A good man can earn as much as from 60 per cent. to 100 per cent. of his wages.

The system is one that weeds out the inefficient and the moderately efficient. It is only satisfactory to highly skilled men, the Élite of the workers, and its use is therefore limited as most men will not work under it. Its greatest fault is that it penalises the worker too much for inefficiency. A man who regularly attains 90 per cent. efficiency would be considered a fair worker in most shops, but under this system he would not only receive no reward, but he would only receive 90 per cent. of his day wages.

The rate must jump at least 40 per cent. at 100 per cent. efficiency, otherwise the method is not so advantageous as some of the other methods, while it is much more difficult to earn reward.

(f) The Gantt System.

This method is very similar to the Taylor System, except that the worker is not penalised so much if he fails to reach standard time.

A large increase in the piece rate is given when 100 per cent. efficiency is reached. For all time taken in excess of standard the worker gets three-quarters of his wage rate instead of the whole of it. As an example, suppose the standard time of a job be 10 hours and the worker takes 12 hours. He is paid full-day rate on 10 hours, and three-quarters the day rate on 2 hours. At 10d. per hour this amounts to—

for 12 hours' pay, which is equal to 9½d. per hour. The efficiency is (10/12) × 100 = 83·3 per cent.

The sloping line below the day rate line shows the hourly rate at various efficiencies.

After 100 per cent. efficiency is reached, the reward is just the same as in the Taylor System.

The advantage of this system over the Taylor System is that the loss for inefficiency is not heavy, yet it is enough to make the worker endeavour to reach standard time. This, again, is a method only suitable for highly skilled workers.

(g) The Emerson System.

In order to arrive at a gradually increasing bonus line, Mr. Emerson took a point on the wage line at 66·6 per cent. efficiency, and another on the 100 per cent. efficiency line at 20 per cent. bonus. The bonuses between these two efficiencies were then arranged so that for each 1 per cent. increase in efficiency the bonus increased in greater proportion. The resulting diagram is a curve which is approximately a parabola. Beyond 20 per cent. efficiency the worker gets paid for all time saved.

By this method reward begins fairly early, so that all workers should be able to get some reward. It progresses very slowly from 66·6 per cent., and at 80 per cent. is about 3¼ per cent. of the wage rate. Then it increases more quickly, and at 90 per cent. efficiency it is 10 per cent. of the wage rate, at 95 per cent. efficiency it is about 15 per cent., and at 100 per cent. efficiency it is 20 per cent.

One thing must be noticed: The reward above 100 per cent. efficiency is based on standard time, and not on reward time. This means that the worker gets a bonus of 20 per cent. on the time worked, and in addition to that the full rate of wages for the time he saves above standard time. As an example, take a job with a standard time of 20 hours:

This method enables the worker to get reward at a comparatively low efficiency. The reward is not much to begin with, but it is enough to induce the worker to try and get a higher efficiency. When standard time is reached, the reward is not enough, but beyond that it increases rapidly.

(h) The Rowan System.

This method differs from all others in the variation of reward earned.

It is extremely simple in calculation, as the worker gets 10 per cent. increase in wages for every 10 per cent. of time saved. He cannot save more than, say, 99 per cent. of the time on the job, because when 100 per cent. is saved it means that the job is done in no time at all.

Suppose the time allowed is 10 hours. If it be done in 5 hours, 50 per cent. of the time has been saved, and the worker gets 50 per cent. increase of wages for the 5 hours he has worked. If the job be done in over 10 hours, day wage, say 10d. per hour, is paid for all the time taken. If done in 9 hours, 11d. per hour is paid; if in 8 hours, 1s. per hour; if in 7 hours, 13d. per hour; and so on.

The efficiency is the standard time (time allowed) divided by the time taken. If a line be plotted of efficiencies and rates-paid, the line is not a straight one, as in other cases, but a curve as shown in the diagram.

Reward rises rapidly at first, but it gets less and less as efficiency increases, which is in direct opposition to reward principles.

The method has little to recommend it except the simplicity of reckoning the reward payment.

It will be seen that the employer cannot possibly overpay the worker, no matter what his efficiency.

No. 1 is the ordinary diagram, 100 per cent. efficiency being the point where bonus begins. This point is based on an estimated time, not on a time study.

No. 2 is a diagram drawn to compare the Rowan System with the Reward System. Assuming that the worker under the Rowan System will usually earn 20 per cent. in excess of his day wages, this has been used to determine the 100 per cent. efficiency line, and the curve has been drawn as before.

(i) Day Rate.

The thick horizontal line marks the day rate of payment for work done. It is the same at all efficiencies, and there is no inducement whatever for a worker to increase his efficiency. Under such conditions the average worker will only do enough work to enable him to keep his job, and will resist all attempts to find out whether the work may be done more efficiently.

(j) Piece Work.

The straight piece work system means that the worker gets so much for each piece produced no matter how long it takes to produce it. Therefore the faster the work is done the more money is earned.

Efficiency is based on the quantity a worker ought to do in order to earn the standard rate of wages. Assuming he gets 10d. an hour, then the payment for the work done ought to equal 10d. when working at the normal rate—namely, 100 per cent. efficiency. If less than this is earned, efficiency falls below 100 per cent.; if more is earned, efficiency is over 100 per cent.

The sloping line shows the earnings per hour at different efficiencies.

There is no scientific basis on which to determine the proper time of the job, and there is great inequality in the prices of different jobs, some being easy, some very difficult. For the disadvantages of the system, see p. 6.

(k) The Ford System.

The Ford System is illustrated in the diagram on p. 108. The amount received by the worker is the same no matter what his efficiency may be, but wages are 50 per cent. higher than the standard day rate. For this reason the firm adopting this system has a far greater choice of workers than other firms, all the best labour gravitating to the firm. The worker is, of course, expected to submit to the conditions prevailing in the factory, and to do the work allotted to him in the stated time and with the degree of accuracy stipulated. Needless to say, the amount of work expected is far greater than under ordinary day work conditions.

This system has two serious disadvantages, the first being that it is of extremely limited application, and the second that it necessitates an exceptionally high degree of organisation if it is to be satisfactory.

With regard to the first point, the system depends entirely on paying wages considerably higher than the average of the district or country in which the factory is situated. This high wages inducement gives the firm the pick of the workers and holds the men to their positions. It is obvious that only one or two firms in each trade can do this. If the system became general, it would mean that wages would be increased all round and that men need no longer be afraid of being discharged. They could leave and get equally high wages elsewhere. Under such circumstances all the advantages of the system would disappear, and wages would be reduced all round until some firm began again.

Dealing with the second point, production will not be increased, or will be increased very little, if the men are left to themselves, and therefore a high degree of organisation is necessary. It means time study, planning, constant improvement in methods and machines, and all those incidentals described herein under Reward System, but with an overhanging threat of dismissal that is absent from the Reward System. The firm must have a standard product if the system is to be economically successful, and each man must do one job only and do it in the manner indicated. Team work is the essence of the system. It is quite impossible to obtain any beneficial result from the Ford System if applied to an average factory. Men cannot produce anything approaching their maximum capacity unless the work is thoroughly well organised, and waste of time, labour, and material, eliminated. And no matter how much the men desire to be worthy of the increased wages, they cannot be blamed if the organisation fails. The only incentive to high production is, of course, the threat of dismissal.

If the Ford System is to be successful, therefore—

1. The organisation must be as keen as, or even keener than, that of the Reward System.

2. The firm must have a highly specialised business.

3. Efficiency must be maintained under threat of dismissal.

4. The system must be adopted by only one or two firms in each trade.

Where these conditions prevail the system should be highly successful.