Henry Rogers Seager American Academy of Political and Social Science.

Annals of the American Academy of Political and Social Science online

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IV Contents


Nathalie C. Rudd.


F. E. Weakly, Manager, Department of Effidency, Montgomery Ward
and Company of Chicago.



Philip J. Reilly, Employment Manager, Dennison Manufacturing

John S. Keir, Instructor in Industry, Wharton School of Finance and
Commerce, Univerrity of Pennsylvania.



W. L. Chandler, Dodge Manufacturing Company, Mishawaka, Indiana.



Morris Llewellyn Cooke, Consulting Engineer, Philadelphia.



Edwin A. Hunger, F<astmap Kodak Company.



A. J. Portenar, Brooklyn Public Employment Bureau, New York State
Department of Labor.


Simon N. Patten, University of Pennsylvania.


Hugo Diemer, B. A., M. E., Profeasor of Industrial Engineering,
Pennqrlvania State College; Formerly Superintendent^ National
Motor Vehicle Company; Production Manager, Goodman Mann-
f acturing Company, and Consulting Engineer.



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Contents v


The Business Man's Libbabt

Babnbtt and McCabe — Mediation^ IfwetUffotion and ArbUraHan in In*

dtulrial DiijnUea (J. T. Young) 290

BBOWTX—PrindpUa o/ Commeree (T. W. Van Metre) 232

GouFTON— TAtf OrganuaHan of The Lumber Indtutry (M. Keir) 280

CkyrrsBr-The AtUhentie History of The United Siatee Steel CorporaHon

(M . Keir) 23 1

Dbobqb— PoMm^er Terminaie and Trains (T. W. Van Metre) 232

Dudley — Finance and Life Ineurance (B. D. Mudgett) 231

FnamGEB — Exporting to Latin America (R. Patohin) 227

Jones — The Adminietraiian of Industrial Enterprises (M. Keir) 229

Moxnm>N — PrindpUa of Money and BoaMng (T. Conway, Jr.) 227

TB3SLPB—iSelected ArOdes on (he American Merehani Marine (G. G. Hueb-

ner) 233

PBEX^PB-^Sdected Articles on the Government Ownership of RaUroads,mv^

(G. G. Huebner) '233

Phillips — Beadingsin Money and Banking (T. Conway, Jr.) 227

SooYBLL — Cost Aecovnting and Burden AppUcaUon (S. Bell) 225

Shaw-— An Approach to Business Problems (M. Keir) 220

U. S. Federal Trade CoioassioN — Report on CodperaHon in American

Export Trade (W. E. Warrington): 229

Wbbnsr— l^Ktory AccounHng (R. B. Kester) 226


Fetter— J^cofiomics (W. I. King) 234

GiRAUi/r—rAtf CoUmial Tariff PcHAcy of France (R. S. MacElwee) 234

JuGLAR— A Brief History of Panics 3rd ed. (E. M. Pattenon) 235

Political Science

Barker— 7*A« Foundations of Oermany (C. G. Fenwiok) 235

jyAYm—Elemenis of International Law, reviaed (D. G. Munro) 286

Gibbons— TAtf New Map of Africa (C. L. Jones) 286

HoLDiCH— Po^itioaf Frontiers and Boundary Making (C. L. Jones) 287

Mathews — Principles of American State Administration (J. T. Young) 238

PmLUFBOV— Termination of War and Treaties qf Peace (J. W. Gamer) 238

ValdAs— Pan AnUrica y el PrMema de la Dtfensa Nasal de Chile (D. G.

Mumo) 239


Kblset— P^MOot BasU of Society (E. A. Ross) 240

Lb Bon— The Psychology of the Great War (J. P. Liohtenbefger) 240

Miner— iStoery of Prostitution (H. Glenn) 241

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Labor turnover refers to the hiring and firing of men. By
excessive labor turnover is meant the excessive hiring and firing of
employes. Speaking broadly, the average concern hires or fires as
many people during the year as are on its payroll. This great
flow of labor from shop to shop is a serious loss both to employer
and employe. Estimates of the cost to the employer of securing,
hiring and adjusting the new employe to an organization range
from $30 to $500 per individual.

More than this, it makes difficult the formation of an esprit de
corps in an organization, and makes almost impossible extensive
participation by employes in management. The degenerative
effects of excessive labor turnover on employes are too obvious to
need mention.

The bettering of this condition will require the development of
a "fourth arm'' of industry, which will specialize in the scientific
dealing with personnel as the production, sales and financial depart-
ments specialize in their respective fields. The methods of this
science are not standardized. This volume is edited with the hope
of contributing to the forward movement of this science by pre-
senting a description of the work of some plants or individuals who
have paid conspicuous attention to this subject.

I wish to acknowledge my indebtedness particularly to Mr.
Boyd Fisher.

Joseph H. Willits, Ph.D.,

Editor in Charge of Vdume,


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Bt E. M. Hopkinb,
Pjreaident, Dartmouth College, Hanover, N. H.

It is not my intention to speak of the advantages of centraliaed
employment work as an untried thing, or even as a new departure.
Progress has been so definite along this line that it is becoming the
exceptional thing among conspicuously well-managed concerns to
find those which have not established functionalized employment
departments. There is not a city in the coimtry in which there is
not a considerable number of companies of the first importance
which have accepted the principles of employment work as of fun-
damental importance.

Evolution of Centralized Employment

The centralized emplo3nnent department is the natural suc-
cessor in the evolution of business from the methods which have
been common in business since industry first began to assume its
large importance in the world's a£fairs. In the very b^inning
labor-saving machinery came in. Somebody invented the loom
and set it up in an English kitchen. Then someone figured that,
if power could be found, a further advance in production would be
made that would enormously increase economic wealth. At this
point the centralization of labor-saving machinery became neces-
sary, in order that the sources of power might be accessible. Thus
we came to the factory. The first application of power to machin-
ery was the water power; then came the invention of steam and a
whole world of possibilities was opened up for the development of
the factory system. The first factories were bams and sheds and
old houses. Then someone, considerably later, decided that the
machinery could be set up to greater advantage in a special build-
ing. So production came to the understanding of the importance
of factory construction, from which time the study and develop-
ment of tiiis has been constant.

^AddreBB delivered before the Philadelphia ABBodation for the DisouflBkm
of Employment Problems, November 8, 1916.


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2 The Annals op the Amebican Academy

Then, men began to see the advantage in arranging the machiB-
ery 80 as to facilitate routing in the processes of manufactuiing.
So, in the evolution, scientific management developed. Scientific
management is not an arbitrary and machine-like way of doing
things, as sometimes it is interpreted to be; but it is. rather the rec-
ognition that there is one best way of doing each specific thing in
the world, and that study and effort to discover* that way is well
worth while.

Thus through the evolution from' labor-saving machinery,
sources of power, factory design and scientific mangement, we come
down to the latest factor in the development of the competitive
method. At the present time there is nothing in particular that
one intelligent concern can do over another equally intelligent in
the securing of raw materials. There is nothing that one well-
administered concern can do that gives it an advantage in policy
over another concern equally well-managed. All can buy the same
kinds of machinery if they know where to get it; or they can design
the same kind. Processes cannot now be kept long entirely secret.
Nothing is secure which rests on the assumption that the compet-
itor cannot know how it is done. Thus it has come about that those
who want to be put on a permanent basis of profit desire to estab-
lish a reputation for intelligent and considerate action which will
make people want to stay with them. It is coming to be under-
stood, in other words, that the opportunity for increased dividrads
and for advantage over competitive concerns, lies largely in the
relationship which can be established with the men and women
who make up the productive labor force. Thus it is that attention
is being not only attracted to, but literally riveted upon, this great
unsystematized and long entirely neglected field of problems of

The movement is under a headway that cannot be stopped;
and some. concerns who will not openly admit their interest in mat-
ters of this sort are in effect, though under different names, ear-
nestly, even if unintelligently, seeking a basis of action which shall
remove industrial unrest from their organizations. The one great-
eat problem in American industry at the present time is how to get,
and how to keep, a labor supply which will do the work at hand in
the best and the most profitable way.

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Advantages of Centralized Employment 3

Backwardness of America

We pride ourselves on our industrial progress in the United
States, and we are wont to boast of the advantages, of our methods
over those of other countries. But yet, we have come very late
to this problem. The success of Germany in carr3ring on the pres-
ent war, in which she has shown such remarkable resourcefulness
and such remarkable ability, is due no more to her efficient han-
dling of men and arms than it is due to the fact that she has spent
years in specializing on human relations in industry. Social ad-
justments had been worked out to greater scientific accuracy in
Germany than in any other country. England's problem was how
to apply the talents and potential ability of her men and women to
the stem necessities facing her in problems of production, no less
than in matters of military and naval policy. In America at the
present time, amid all the shortages that exist, the one great over-
whelming shortage is of men and women properly equipped to do
the work which is available for this country to do, if only we can
handle it.

Two years ago a manager of major rank in a great Philadel-
phia plant told me: ''We are not interested in problems of persoimel.
We have a lot of work; but there are always more people to do it
than there is work; and if those we have do not wish to work under
our conditions, they can go, and we will go out and get others. '^
Even so soon the folly of such a remark is apparent. The shoe is
on the other foot. The work is available in quantities, but workers
can hardly be secured at any wages.

No one knows exactly what will be the result on industry in
America at the end of the war. It is a certainty, however, that
one of two alternatives will have to be faced: either we are going
into an era of unprecedented prosperity, and will continue to need,,
as we are coming to need now, people who are trained to our work,
who are loyal to our organizations, and whom we can induce to re-
main steadily with us; or else we are going into an era of competi-
tion and price-cutting, when every element of risk must be elimina-
ted, and when every element of waste must be guarded against,
when manufacturers must come down to the basis of utilizing every
advantage at hand.

A Chicago man said to me recently:

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4 The Annai^ of the Ambbican Academy

Up to afew weeks ago I insieted that there was nothing in oeatraliied employ-
ment for UB. But I oame to the conviction that there was a troe analogy in this
to our purchasing department. Two years ago we put a man in charge of pur-
chasiQg simply our printed forms; and I found a few wccIeb ago, upon investtga-
tion, that this centralised responsibiUty has saved us over $35,000 in two yean.
Somehow, out of this I saw the argument for the employment office. If the re-
moval of responsibility for printed forms from our department heads aooompliahed
so much, what woxildn't happen if in like way we removed responsibility for the
purchase of our labor?

ATTiTxn>B OF Dbpabtmbnt Heads

Recognition has to be given to one thing in considering the
establishment of such a department. For some reason the average
man feels that his bailiwick is invaded miduly if in any way au-
thority is taken away from him in regard either to the hiring or to
the discharge of employes whose work he is directing. It is almost
impossible to convince foremen or department managers that many
men in their places who have held ideas like theirs have come to
feel that they have been relieved of a burden of whose weight they
had no idea while it was upon them. Many a man has come to feel
relief at the opportunity to apply himself to the specific work in
which he was skilled, as he never had the opportunity to do while
held responsible for keeping up his own labor supply. Experience
justifies the argument that a well set up employment department,
tactfully managed and administratively endorsed, will vindicate
itself to the worst skeptics, if it is but given time.

We must not lose sight of one matter, which is a weakness not
yet corrected in modem theories of organisation, using the term
organisation in its technical sense. The transition from the old-
time unit type to the functional type of organisation has brought
in its train of major advantages certain weaknesses which remain
to be corrected. There is always the tendency, in this newer form
of organization! that goes inevitably with specialisationi to narrow
the range of solicitude on the part of {he various executives of
lesser rank and their respective subordinates, from concern for the
company's interests as a whole to concern simply for the function-
alized department. This is a natural outcome of the period whrai
maximum emphasis had of necessity to be placed upon departmental
boundaries in order to establish the system. But once established,
the system requires that connection of one man with another

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Advantages of Cxntralizbd Ehployment 5-

should be not simply by route of the charted lines of an organisa-
tion sheet, but that all who have to do with the company's business
should feel definite relationships with all others of the force, to an
extent that each should have concern that all responsibilities of
the company should be met in whatsoever functionalized depart-
ment they might appear.

The one great weakness that the functionalized organization
has failed to correct is a tendency to breed executives without
antennae for the interests of respective organizations as wholes.
It is, of course, a fault that can be corrected only slowly, and even
then must be a matter of the spirit in which the worker is bred
rather than the way in which organization should be outlined on
printed charts.

. It is all very di£Glcult and hard to get at; but it is all tremen-
dously involved in the question of how to create the new spirit of
esprit de corps and cooperation, which successful industries will have
to create. It is studies such as are involved in questions of this
sort that become a vital part of the comprehensive work of a well
designed employment office; and it is by such avenues that it can
become of maximum usefulness to heads of concerns.

Another difficulty is the fact that in concerns where|]^broad
and intelligent policies prevail at the top, and where systems are
installed looking to the betterment of the lower grade positions,
there is such frequent failure to transmit the spirit behind these
thinge beyond a small group at the top who know just what they are
all about. Sometimes this group attempts to familiarize a some-
what larger group, subordinate to them, with the motives and the
spirit behind proposed projects; but usually the scheme never gets
down to the mass of productive workers in any form that carries
conviction to their minds that there is a broad conception behind
it. Therefore, not knowing what these things are all about, they
become skeptical; and in this frame of mind the original good is
so completely neutralized that there is little advantage to the com-
pany in having had the broad conception at the initiation of the
plan. The point I am trying to make is, that too often there seems
to be a complete insulation between the people at the top of the
company and those at the bottom, due to the mental or spiritual
inability of sub-managers and sub-foremen to transmit the spirit
of men higher up to those lower down. It is here again that the

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6 The Annals of the Amebican Acadekt

intelligently administered employment office can become of value
entirely disproportionate to any cost involved in maintaining it.

RELATrvE Importance of Executives and Working Force

There is another fallacy to be overthrown, and that is the
old-time autocratic and arbitrary theory that the subordinate pro-
ductive worker exists to supplement the efforts of the executive over
him. It is now coming to be recognized that executives exist
rather to correlate and supplement the efforts of the productive
force. One cannot argue this case as a whole without going into
an immense amount of detail, but superficially it is true that the
world's work would be far more completely done if all executives
were to be wiped out of existence at one stroke than if all produc-
tive labor were to be.

If we are forced to accept the hypothesis of the complete elim-
ination of one group or the other, I think that most of us would
spare the executives before we would the productive force. Men
in the highest positions, however, will concede this far more quickly
than the foreman who has just been promoted from the ranks.

There is an assumption that needs to be guarded against in
any consideration of the establishment of an employment depart-
ment, namely, that employment is a term covering an occasional
thing. The attitude has been too frequent that the whole problem
was to get the man in, and that once in the system he is in a hop-
per and as the mill grinds he will be ground out either as wheat or
chaff. Leaving the ethics of the matter entirely aside, we cannot
as a matter of profits continue to have so much lost as chaff. It
costs too much continually to feed the hopper. Having secured
the force, there is financial advantage to a company in keeping it
and in maintaining it under such conditions that the individuals
composing it will be unwilling to leave. There is nothing vision-
ary about this proposition. It comes down to the fundamental
basis of the financial welfare of the concern. *

Supervision after Hiring

This brings up the point of the function of the employment
department after the labor force is engaged. The curse of industry
in the past has been the impersonal nature of its administration.
This is a very real danger at the present time in the development

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Advantages of Centralized Employment 7

of the theory of the employment department. This departmenti
more than any other, cannot afford to become impersonal. It is,
in my estimation, the danger of the whole tendency of the present
day to judge by prescribed tests in regard to the retention or re-
jection of workers either on the job, or in regard to those being
newly sought.

But having secured an individual to do our work, and having
got him established on a basis satisfactory to the department
into which he goes, what, then, is the realm of the emplo3nnent
department? There can be no question that the respective de-
partment heads must be the final judges in regard to the grade of
work and the desirability of retention of the individual employe
under them. They know the work to be done. However, I be-
lieve that it is a kindness to them, as well as to the people under
them, that some department outside of theirs shall continually
watch their policy and appraise it by outside standards in relation
to its policies with the people working therein.

There is a factor involved in many a discharge which never
comes to be known by the man who cuts the relationship between
the company and the individual. If the people of our productive
forces are going to work with enthusiasm and loyalty, they must
have confidence that discharge is not coming to them because of
conditions over which they have no control, and that a peremptory
dismissal shall not come to them for temporary impairment of abil-
ity which has been preceded by faithful and painstaking work.
There must be some avenue through which information can be se-
cured as to the justice of the action of the man above, as well as to
the basic reason for the fault of the man below. If it is discovered
that a man has fallen off in his work, due to some temporary condi-
tion of such a nature as would have impaired the work of the highest
executive as well as that of the lowest operative, the man down the
line who receives the discharge is going to resent bitterly the lack
of opportunity for him to bring out the extenuating circumstances,
which he knows would be so plainly evident in the case of the man of
higher rank. For some such reasons as these an employment de-
partment ought to have a definite right of access to individuals
throughout the plant. It is hard to estimate what a brake on
unreasonable discharge may be established by such a contact.
Hardly a concern at the present time would think of making pay-

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8 The Annals of the American AcADEirr

ment on ite checks legal without a second signature; and yet
industry goes on dealing with the lives of men and women on the
basis of individual caprice on the part of its less intelligent execu-

* The so-called welfare work, the rapidly increasing province
of accident prevention and health preservation, and the policy of
special training which we somewhat euphemistically call educational
work, are all detaUs of the general purpose which ought to lie under
the establishment and maintenance of an employment department.
Such a department should report to the head of the business. If
it is not important enough to do this it ought not to be established.

Position in the Obqanization

Such a department should be given the responsibility of se-
curing the labor for the different departments of the plant; and
the procedure should be established that men and women be secured
through this department xmtil it becomes evident that it cannot
render value. In my estimation such a department does not need
arbitrary power, but it does need a sympathy of understanding from
those at the head of the business, and an endorsement which shall
give it standing with those of lower rank. Such a department
should be given access enough to all portions of the plant so that it
may effectually act as a check on the non-comprehending depart-
ment head who has no ability or intention to do anything except
to exercise arrogantly such power as inheres in his position. The
employment manager exists not so much to say that things shaD
be done or that they shall not be done, as he does to know what is
taking place and the reason therefor.

Such a department cannot be defined as any specific thing
in any specific concern, because it will differ so much in one from
another. But the fundamental purpose will be much the same. It
ought to be the first aid for getting the best people for the posi-
tions; and it ought to be the big brother of all the department
heads in their effort to keep and train their men so that these
shall be of greatest use to themselves, to the concerns involved,
and to the community.

Is there some process available in your organisation, by wliieh
those men who are worthy can be given an opportunity to mak with

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Advantages of Centralized Employubnt 9

some security of tenure and have opportunities to make themselves
of added value to the company? If so, the centralized employment
department should find it. The successful industry of the future
is going to be set against a social background in which a healthier

Online LibraryHenry Rogers Seager American Academy of Political and Social ScienceAnnals of the American Academy of Political and Social Science → online text (page 68 of 91)