Henry Laurence Gantt.

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INDUSTRIAL MANAGEMENT LIBRARY



WORK, WAGES, AND
PROFITS

SECOND EDITION
REVISED AND ENLARGED

BY

H. L. GANTT




NEW YORK

THE ENGINEERING MAGAZINE CO.

1919



Copyright, 1913,
By THE EXGIXEEEING MAGAZINE CO.



INTEODUCTION TO SECOND EDITION

The first edition of Mr. Gantt's book appeared in
1910 as a volume of 194 pages, with seven charts,
the graphic illustrations and most of the specific
examples being drawn from results secured in the
textile industries. Since that date a rapid rise has
taken place in public attention to the methods used
and the results secured, and in the active effort (evi-
denced by inquiry and undertaking) to obtain ad-
vantages corresponding to those so substantially
realized in the cases cited.

This interest and inquiry have been the principal
influence inspiring the enlargement of this book, not
only by inclusion of additional instances, but by
more detailed development of some features of the
work, and the summation of the argument into a
comprehensive and entire (even if broadly sketched)
outline of a plan of systematic management, based
on the policies and methods defined by Mr. Gantt.
His experience in the field of labor management
covers a quarter-century of close practical applica-
tion. His special methods, which even yet are but
partially and imperfectly understood by many, have
been identified with his name for at least half this
period. These methods are sometimes incorrectly
supposed to be summed up in the bonus system of
wage payment; but the inducement of increased
earnings is only one factor, and almost the last fac-
tor, in the complete statement of Mr. Gantt's meth-

3



4 INTRODUCTION TO SECOND EDITION

ods. His whole concept of scientific investigation,
careful standardization, individual instruction, and
interconnected reward to both instructor or super-
visor and workman, must be clearly grasped before
any adequate idea of task work with bonus can be
obtained.

This full concept is set forth in the present vol-
ume, multiplied by ample exhibition of practical re-
sults. The added material is drawn from the me-
chanical industries, from machine-shop, metal-work-
ing and locomotive-building plants. The colored
charts, which have been received with so much in-
terest, are increased in number from six to twelve,
the whole number of illustrations being brought up
to twenty-seven, and the original nine chapters being
enlarged by expansion and supplement to twelve.

The larger portion of the first edition was gath-
ered by compilation of a series of articles published
in The Engineering Magazine from February to
June, 1910, with incorporation of three of Mr.
Gantt's important earlier contributions on the same
subject. To this are now added a new chapter on
"The Task Idea," adapted from Mr. Gantt's paper
before the Tuck School Conference; an enlargement
of the discussion on "Fixing Habits of Industry,''
based upon results observed since the former volume
was issued; a new chapter on "Eesults," inspired by
comment and inquiry addressed to the author dur-
ing the last three years; and a concluding chapter,
condensed from an article on "A Practical Example
of Scientific Management," published in The Engi-
neering Magazine for April, 1911.

It is natural, and indeed inevitable, in the present
active development of the philosophy of efficiency
and the practice of scientific management, that such
revisions should be made. The underlying ideas are



INTRODUCTION TO SECOND EDITION 5

vital; and, like all live things, they are still grow-
ing, and will continue to grow. Growth means ex-
pansion, if not change of form, and this makes final
definition impossible, because definition means limi-
tation. In the following pages, however, Mr. Gantt
gives the fullest exposition ever put forth of his ma-
ture thought and work. He gives to the world here
the latest word (though happily far from the last
word) on his principles and practice. His grasp
of fundamentals is scientific. His association of ef-
fects with their causes is philosophic. In its entirety
the work offers an interpretation of industrial con-
ditions and a promise for betterment that make it
a classic — a classic of optimism — in the literature of
industry.

Charles Buxton Going.



PEEFACE TO SECOND EDITION

The law of development is evolution. Revolution
is justified only when evolution is impossible.

If the most complete system of scientific manage-
ment which has ever been devised could be installed
in a manufacturing plant over night, it would prob-
ably be impossible to operate that plant at all the
next day, and for weeks, perhaps months, it would
be operated in such an inefficient manner as un-
doubtedly to cause very serious losses.

A system of management especially designed for
economical production is a mechanism which is suc-
cessful only when all parts work in harmony. The
men who form a part of this mechanism must be
trained individually and collectively.

At the battle of Santiago, individually capable
men, serving good guns, under high-class officers,
made an average of three per cent in their hits, at
an average distance of not over two miles. These
same men, under the same officers, properly trained
to use the best scientific knowledge and methods of
today, would easily score in hits eighty per cent of
the shots at the same range, at the same time firing
five times as rapidly.

To attempt to operate a new system of gun-fire
control from rules and instructions, without train-
ing the men, would result in the loss of even the
three per cent efficiency which existed before the
introduction of the new system.

7



8 PREFACE TO SECOND EDITION

While I do not believe that, in an ordinary manu-
facturing establishment, a sudden change of manage-
ment would be quite as disastrous as such a change
would have been in the navy, yet it would unques-
tionably be very detrimental to the business, per-
haps for a long time.

The principles of modern industrial organization,
popularly known as "Scientific Management," are
getting to be pretty well understood by those who
have studied the subject thoroughly. Even the meth-
ods of operating the various mechanisms used for
this purpose are becoming more clear to people who
are in the habit of investigating new methods and
ideas. These methods, however, can never be util-
ized properly until the rank and file have been trained
to operate under them. This training necessarily
takes time; but, if it is properly done, I have yet
to find anybody more enthusiastic than the workmen
themselves operating under it. They have the same
kind of enthusiasm that the gunner in the navy has
acquired since he learned that shooting is no longer
guess-work.

The man who undertakes to introduce scientific
management and pins his faith to rules, and the use
of forms and blanks, without thoroughly compre-
hending the principles upon which it is based, will
fail. Forms and blanks are simply the means to an
end. If the end is not kept clearly in mind, the use
of these forms and blanks is apt to be detrimental
rather than beneficial.

This book is an effort to explain the principles of
"Modern Industrial Organization," and to give some
idea of how to utilize the methods of evolution in
the introduction of a system of management based
on these principles.



PREFACE TO SECOND EDITION V

A system of management is an asset, and a good
system is a valuable asset.

The cost of acquiring such an asset cannot be
legitimately charged to operating expenses.

H. L. Gantt.
April, 1913.



CONTENTS

"Chapter I. The Application of the Scientific
Method to the Labor Problem

Economical Utilization of Labor the Great
Modern Problem for Engineers and Managers —
Limitation of Output by Workers — Limitation
of Workmen's Allowable Earnings by Employ-
ers—How These Tendencies Militate against the
Common Good — Permanently Successful Man-
agement Must Be Beneficial to both Employer
and Employee — The Inefficiency of Ordinary
Management Systems — ^The Ineflficiency of Ordi-
nary Labor — The Possible Betterment Obtaina-
ble through Scientific Study — The Attainable
Output Generally Three Times the Present
Average — Realization of This Large Possible
Productivity Depends on the Manager — His
Guide Is Scientific Investigation— The Three
Parts of the Problem Defined — The Benefits
Secured. 19

Chapter II. The Utilization of Labor

The Commercial Axiom that Good Bargains
Benefit both Parties — The Same Principle now
Realized in Industrial Relations — Eflicient
Work Goes with High Wages — Inefficient Plant
Design or Equipment Makes Efficient Labor
Impossible — Common-Sense Methods in Improv-
ing Plant Efficiency — Scientific Study Necessary
to Determine the Efficiency of Operations — In-
stances of Uneconomical Methods — The Ele-
ments of Operation Study — How Operation
Times are Standardized — How the Workman Is
Induced to Reach Standard Times — The Four

11



12 CONTENTS

Conditions Necessary to Secure Best Results —
Exact Knowledge of the Best Way of Doing
the Worlv — Instructing the Worlcnien how to
Do It — Wages as an Inducement — Loss of
Bonus as a Preventive of Failure — Manage-
ment and Wages. 33

Chapter III. The Compensation of Workmen
The Passing of the Age of Force — The Con-
flict between Employer and Employee — ^Trade
Unions ; Why They Exist — Collective Bargain-
ing the Inevitable Accompaniment of a Class
Wage Rate — Its Disadvantage to the Employer
— Its Disadvantage to the Progressive Work-
man — Possibility of Offering the Individual
Worker Something Better than the Union —
Ordinary Methods of Wage Payment and Their
Tendencies. 51

Chapter IV. Day Work

Day Work Defined — What Regulates Day
Wages — The Class Wage Rate Destructive to
the Efficiency of Labor — Keeping Individ!ual
Efficiency Records — The Difficulties and the Pos-
sibilities — Practical Methods Outlined — The Re-
sults Secured in Practice — The Suggestion of
a System that can Supplant the Union 65

Chapter V. Piece Work

How It Differs from Day Work — How Ordi-
nary Piece Work Involves the Same Evils as
the Day Wage — Why Ordinary Piece Work Pro-
duces Labor Troubles — Unreliability of Ordi-
nary Time Records and Foremen's Estimates —
How the Efficient Worker under the Ordinary
Piece-Rate System Is Penalized — A New and
Better System Proposed — Its Essentials — Ex-
pert Investigation, Standard Methods, Capable
Workers, Proper Instruction, Sufficient Com-
pensation — Why the Ordinary Foreman can not
Do the Work of the Expert — Ordinary Shop
Difficulties in Introducing the System — How
They may Be Overcome — Training of Work-
men — Compensation of Workmen and of Train-



CONTENTS 13

ers — Keeping Good Faith with the Men — The
Value of the Efficient Man to His Employer —
A Modern Counterpart of the Apprentice Sys-
tem 77

Chapter VI. Task Work with a Bonus

A Review of the Wage Conditions That Lead
to Labor Unions and Labor Conflicts — A Survey
of What Has Been Accomplished in Reward-
ing Efficiency and Promoting Labor Peace —
The History of the Bonus System — Its Early
Results — How It Succeeded at the Bethlehem
Steel Works — How Its Abandonment There
Brought Back Labor Troubles — A Recapitula-
tion of the Elements of the Successful System. 103

Chapter VII. The Task Idea

Fundamental Principle Underlying Task
Work with a Bonus — Its Essential Difference
from the "Drive" Method — The Task Idea Sug-
gested by Proved Experience in Training Chil-
dren — The Inspiration of Working for an Ob-
ject — Task and Bonus in Accord with Human
Nature — Task and Bonus Therefore a Proper
Foundation for Successful Management — The
Problem Is to Set the Proper Task — Obstacles
Discovered in Practical Experience — Schedules
as Tasks — Scheduling Miscellaneous Work — In-
dividual Efficiency Rapidly Raised by Simple
Schedules — Practical Introduction of the Sched-
uling System — Preparation for Task Setting —
What Steps It Is Necessary to Take — How Hard
the Task Should Be — Performing the Tasks —
Obligations of the Management — Task Work in
a Machine Shop — Actual Experience in a Bleach-
ery — Planning and Task Setting Often Increase
Output Threefold — Maintaining Proper Condi-
tions 121

Chapter VIII. Training Workmen in Habits of
Industry and Co-operation

Habits of Industry More Valuable than Knowl-
edge or Skill — How These Habits Are Culti-
vated by the Bonus System — Its Practical Ap-
plications Explained in Detail — How Habits of
Work Are Practically Cultivated — How Quality



14 CONTENTS

as Well as Quantity of Output Improves — The
Setting of Tasks — The Standardization of Work
— Obstacles to the Introduction of the System —
Helps to Its Stability after It Has Been Intro-
duced — The Co-operation of the Men Secured
— The Reasons Why Work Is Better as Well as
Larger — Method of Introducing the System into
a New Plant ^ 147

Chapter IX. Fixing Habits of Industry

Records of Specific Cases Since 1905 — The
Task and Bonus System in a Cotton Mill — Indi-
vidual Records of the Weavers Exhibited on a
Colored Chart — The Chart Explained and Dis-
cussed — Experience in a Weave Shed Exhibiting
Great Success — Colored Chart Showing the
Bonus System Applied to Winding Bobbins —
Discussion — Colored Chart Showing Conditions
in the Same Department Three Years Later —
Colored Chart Showing Task and Bonus System
Applied to Spoolers — Progress of Efficiency
Pointed Out — Chart Showing Task and Bonus
System with Inspectors — Chart Showing Actual
Results on Wages, Output, and Unit Costs in
Folding-Room — How the Results Were Main-
tained for Three Years Continuously — Colored
Chart Showing Results in a Worsted Mill — Col-
ored Chart Showing Increase in Efficiency of
Weavers — Colored Chart Showing Maintenance
of Result for Several Years — How the Spirit
of Co-operation Is Established 175

Chapter X. Results

Diagram Showing Comparison Between Old
Conditions and New — Improvement in Ratios of
Output, Wage Costs, and Wage Rate — Better-
ment of Quality as Well as Quantity of Output
— Reorganization Effected in a Packing-Box Fac-
tory — Chart Showing Results Secured with
Automatic Screw Machines — Chart Showing
Betterment in Miscellaneous Machine Work —
Similarity of Effects in All Cases — Effect on
Reduction of Overhead Expense — Treatment of
Mistakes in Task Setting — Universality of the
Principles Proved by Charts — The Essentials of
the Methods Employed — Favorable Physical and
Mental Effects Observed Among Bonus Workers 207



CONTENTS 15

Chaptee XI. Prices and Peofits

The Trust Movement of 1890 — Effects of Con-
solidation on Economy of Operation — Effects of
Union Labor on Increase of Production Cost —
Two Ways of Increasing Profits: Increasing
Selling Price or Decreasing Production Cost —
The Vicious Cycle of Increased Prices — Horizon-
tal Rise of Wages Not a Cure but a Transient
Expedient — Necessity of Adjusting Prices to
Value — The Economic Law That Permanent
Large Profits Can Be Secured Only by Efficient
Operation — American Reliance on Huge Na-
tional Resources Most Unsafe — Increased Ef-
ficiency a Question of National Importance —
Scientific Methods Must Be Applied to Manufac-
turing Problems — Difficulties Inherent in the
Factory System — How Task and Bonus Restores
the Advantages of the Older Order — The Ele-
ments of Manufacturing Cost — Profits Can Be
Greatly Enlarged Only by Increasing Efficiency
of Operation — The System of Management Ad-
vocated Insures Efficient Control — The Cost Is
Small 227

''Chapter XII. A Practical Example

Origin of the Task and Bonus System — Ele-
ments of the System — The Limitation of Bonus
— Making Out Instruction Cards — How Task
Times and Work Methods Are Determined — Ad-
vantages of Bonus over Piece Rates — Application
of Instruction Cards to a Machine Shop — Illus-
trations of Typical Cards — The Man Record —
Daily Balance of Work — A Foundry Schedule
and Balance — Illustration of Balance Sheet —
The Daily Balance as a Permanent Record — A
Machine-Shop Balance and Schedule — Illustra-
tion — Value of Balance Not Dependent upon
Method of Compensation — Cost of Keeping Bal-
ances — Illustrations of Time Cards — Time Rec-
ords — Cost Determinations — Cost of Time-Keep-
ing System — Determining Progress of Produc-
tion — Difficulties of Getting a Daily Balance —
Values of the Balance when Obtained — The
Schedule System — Routine and Expert Work —
General Principles and Details 253



TABLE OF ILLUSTRATIONS

Man Record Sheet 68

Weavers' Achievement of Task 182

Fixation of Habits of Industry 182

Disappearance of the Slack Monday Habit 186

Maintenance of Conditions for Three Years 189

Disappearance of Slack Saturday Habit 190

Betterment of Output by Bonus to Foremen 190

Twelve Months' Improvement under Task and Bonus

System, Girls Working in a Folding Room 192

Bonus Record of Girls in a Worsted Mill 194

Same Room Later, Showing Progress of Betterment 194
Results of Too Great Haste in Putting Workers on

Bonus 196

Errors of Hasty Start Corrected by Perseverance 200

Very Recent Record Showing Success of Task and

Bonus in Spite of Hostility of Workers 204

Improvement of Ratios of Production, Wage-Cost,
and Earnings by Task and Bonus Methods in

Pillow-Case Factory 208

Improvement of Output, Wage Earnings, and Pro-
duction Cost of Small Automatic Machines 213

Improvement of Output, Wage Earnings, and Pro-
duction Cost of Large Automatic Machines 214

Improvement of Output, Wage Earnings, and Pro-
duction Cost in Miscellaneous Machine Work 217

Instruction Card for Turning a Crank Shaft 264

Instruction Card, Planing Locomotive Frames 265

Instruction Card, Drilling Cylinder Cover, (Front)- 267
Instruction Card, Drilling Cylinder Cover, (Back)., 267

Graphical Balance for Foundry Records 273

Graphical Record, Building 15 Locomotives 276

Graphical Record, Showing Effect of Deficient

Frame-Drilling Capacity 277

Time Card for a Machine Shop 282

Time Card Used in a Bleachery 283

Rack for Time Cards 284

16



THE APPLICATION OF SCIENTIFIC

METHODS TO THE LABOR

PROBLEM



WORK, WAGES, AND PROFITS



Chapter I

THE APPLICATION OF SCIENTIFIC METH-
ODS TO THE LABOR PROBLEM

' I ''HE greatest i3roblem before engineers
''- and managers today is the economical
utilization of labor. The limiting of output
by the workman, and the limiting by the em-
ployer of the amount a workman is allowed
to earn, are both factors which militate
against that harmonious co-operation of em-
ployer and employee which is essential to
their highest common good.

Scientific investigation is rapidly putting
at our disposal vast amounts of knowledge
concerning materials and forces, which it is
the business of the engineer to utilize for the
benefit of the community. Well-designed
plants and efficient labor-saving devices, to
be seen on every hand, bear testimony that

19



20 WORK, "WAGES, AXD PROFITS

lie is doing at least a portion of his work
well. When, however, it comes to the opera-
tion of these i^lants and the utilization of
these labor-saving devices, the lack of co-
operation between employer and employee,
and the inefficient utilization of labor, very
much impair their efficiency.

The increase of this efficiency is essen-
tially the problem of the manager, and the
amount to which it can be increased by
proper study is, in most cases, so great as to
be almost incredible.

In considering the subject of management
we must recognize the fact that in this coun-
try, so long as a man conforms to the laws
of the State, he has a right to govern his
own conduct, and to act in such a manner as
his interests seem to dictate. Granting this,
it follows that any scheme of management to
be permanently successful must be beneficial
alike to employer and employee, and neithel^
labor unions that regard their interests as
essentially antagonistic to that of employers,
nor employers' associations whose only ef-
fort is to oppose force with force, can ever
effect a permanent solution of the problem
of the proper relations between employers
and employees.



SCIENTIFIC METHODS FOR THE LABOR PROBLEM 21

Boards of arbitration are temporary ex-
pedients, and the results of tlieir work are
seldom better than a sort of Missouri com-
promise, to be fought out later ; for although
they be composed of men of the highest in-
telligence, and of the greatest integrity, the
conditions under which they are organized
and the means at their disposal never enable
them to get more than a superficial knowl-
edge of the subject. The information such
a board gets is all in the form of testimony,
which, although it may be honestly given, can
never produce a complete understanding of
the subject; for, as a rule, neither employer
nor employee knows exactly in detail the best
way of doing a piece of work, and, as far as
my own experience goes, they never know ex-
actly Jiotv long it should take a good man
fitted for the work, and provided ivith proper
implements. Before intelligent action can be
taken in any case these facts must be known.

In order to get a general idea of the con-
ditions that exist in the mass of our manu-
facturing industries it is necessary to review
briefly the manner of their development.

The expert mechanic, who, with a business
growing to larger projiortions than he could
take care of, hired a few men to help him,



23 -WORK, WAGES, AND PROFITS

and directed them all by his personal ex-
ample and skill, first gave place to the small
factory, which he could run on the same lines.

Today, however, even the smaller fac-
tories have grown beyond the point where
they can be directed or controlled by one
man, and methods which were successful on
the smaller scale fail now to apply on the
larger. The factory is divided into depart-
ments, each directed by a foreman, who, in
many cases, has had no training in manage-
ment, and often has no capacity for it. He
is invariably overworked if he attempts to
do his duty, and the manager seldom has
time to inquire into his troubles, but fre-
quently tries to remedy matters by appoint-
ing another foreman, often making matters
worse.

Again, if expenses are too great, and it
seems impossible to meet competition, there
is seldom any serious effort made to find out
why expenses are too high, but it is assumed
that the way out of the difficulty is to reduce
wages. It never appears to occur to a man-
ager that perhaps the cause of the excessive
expense may not lie with the workman, but
with the management. Managers rarely seem
to suspect that, if the workmen were more



SCIENTIFIC METHODS FOR THE LABOR PROBLEM 23

intelligently directed, the output per man
might be largely increased without a corre-
sponding increase in expense.

Those who have given even superficial
study to the subject are beginning to realize
the enormous gain that can be made in the
efficiency of workmen, if they are properly
directed and provided with proper appli-
ances. Few, however, have realized another
fact of equal importance, namely, that to
maintain permanently this increase of effi-
ciency, the workman must be allowed a por-
tion of the benefit derived from it.

To obtain this high degree of efficiency
successfully, however, the same careful scien-
tific analysis and investigation must be ap-
plied to every labor detail as the chemist or
biologist applies to his work. Wherever this
has been done, it has been found possible to
reduce expenses, and, at the same time, to
increase wages, producing a condition satis-
factory to both employer and employee.

The great difficulty in instituting this
method of dealing with labor questions is
that usually neither employer nor employee
has sufficient knowledge of the scientific
method to realize either the amount of detail
work necessary, or the extent of the benefits



24 AVORK, WAGES, AMD PROFITS

to bo derived from it. In general, tlieir in-
clination is to adhere to the methods with
which they are familiar, and to distrust all
others, even though their methods have failed
to bring them appreciably nearer the solu-
tion of their problems, and the newer
methods have produced results far more sat-
isfactory than they even hoped for. A scien-


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