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determination of that event. When
the smoke of conflict clears away and
men cease to be afraid to give full ex-
pression to their beliefs and convic-
tions because of their possible politi-
cal effect, a calm consideration of the
problem, with a view to the best public
interests, doubtless will produce some
governmental machinery along the
lines suggested, or along some other
lines intended to provide a practical
method for the speedy determination
of controversies in industry, and the
ending of the present anomalous state
of international relations, the recogni-
tion of the interdependence of all na-
tions, and a common responsibiUty for
the restoration of normal conditions in
the world, may induce a better spirit of
mutual helpfulness, of recognition of
common interests between those who
employ and those who work for a daily
wage, out of which there may come,
not a greater impetus towards the es-
tablishment of a different social order,
but a more just and temperate em-
ployment of the machinery of our own
government towards the attainment
of the ideals of American life, which
have guided us through a century and a
half of progress to a position of unpre-
cedented national prosperity.



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Personnel Administration as an Aid to Industrial

Stability

By Walter Dill Scott

The Scott Company, Chicago, SI.



FREQUENTLY a national prob-
lem seems difficult because there
is no panacea and because its solution
depends upon the development of inter-
related theories or principles and then
the carrying out the practice which is
based upon those principles. Allow
me to illustrate. Possibly the greatest
national problem facing the American
people one hundred years ago w^ the
rapid increase of the food supply of the
nation. For such a problem there was
no panacea. That man made a con-
tribution who formulated the principle
that the problem would be solved by
bringing into cultivation the millions
of acres of land which were supposed
to be sterile and up to that time had
lain fallow. However, the contribu-
tion was not really effective until the
practice had made those acres fertile.
A contribution was made in solving
this same problem by the man who saw
the necessity for more adequate means
of transporting food products, but
the principle was not effective until
the practice had manifested itself in the
construction of the railroads. The
man who saw that the problem could
be solved only by fundamental inven-
tions in farm implements made a con-
tribution, but a greater contribution
was made by the man who invented
the farm implements. The man who
saw the necessity for applying scientific
farming to agriculture rendered a serv-
ice, but the man who made it scientific
rendered a greater service. The food
supply problem was largely solved, not
by any one principle or one practice,
but by the inter-relation of principles
and practice.



Thirty or forty years ago our great-
est national problem was that of ex-
panding markets. The man who saw
that we could expand our markets only
by extending our systems of credit, by
changing from a cash to credit system,
formulated a principle that was essen-
tial, but the practice based on that
principle made the real contribution.
The man who saw that it was necessary
to have large centers of distribution
made a contribution, but the man who
made the department stores, the chain
stores, the mail order houses and the
jobbing houses brought about the act-
ual fruition which is based upon the
principle. We could go on from one
national problem to another and show
that the solution in no case was a
panacea, but was brought about by the
practical working out of the principles
which underlie that particular problem.

Today, the greatest problem facing
America, if not the world, is that of
stimulating the worker to do his best,
of securing the cooperation of those on
whom we depend to do the world's
work. Our problem is one of personnel
administration. The principles and
practice which were effective in solv-
ing our other national problems will
not solve this one.

Principles of Personnel Adbon-
istration

Attention should be brought to
three of the fundamental principles of
personnel administration that underlie
our problem, and to the fact that prac-
tice based on these principles are es-
sential steps in securing stability of
labor.



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Placement of Worker

The first principle is this: Every
worker should he placed in thai position
where he has the best possible chance to
make the most of himself. This must be
interpreted as consistent with the
larger interests of society as a whole.
Our practice is diverse from this prin-
ciple. Thus one practice which may
seem far afield but one which played a
very large part in the history of the
world is a caste system, such as that of
India, where "by the will of the gods"
people are placed in a particular calling.
Similarly the guilds of Europe deter-
mine the vocations which a person
should be allowed to enter. The mere
proximity of the job and the available
jobs have played too large a part in
our practice. Lastly, social approval
of certain jobs and disapproval of
others play a very large part at present
in vocational placement in America.

If we should attempt to analyze the
reasons which have brought us to the
jobs that we now occupy, we might
find that the general practices here
referred to are significant factors.

Practices for Placements in Industry

Here are some of the practices which
have been believed in and followed by
wise men in all ages for placements in
industry. No man believes in very
many but most men believe in some.
Astrology, augury, chance as mani-
fested in drawing o£ straws, casting of
lots or the flipping of a coin, chirog-
raphy, chiromancy, character analysis,
divination, fortUne-telling, horoscopes,
hypnotism, intuition, magic, mediums,
mind-reading, necromancy, omens, oc-
cultism, oracles, palmistry, phrenology,
physiognomy, premonitions, psycho-
logical tests, sooth-saying, sorcery,
sortilege, sub-conscious hunches, stig-
mata, taUsman, trade tests and telep-
athy are some of these practices.

If we do not follow these practices



in placing the individual in employ-
ment then we must depend upon the
judgment of the maiden school-teacher,
the indulgent mother, the ambitious
father, the Ustless recruiting oflBcer,
the mercenary employment agent, or
worse yet, the indifferent employment
clerk. Vocational guidance has been
wholly unscientific and unsatisfactory.
People have not been placed with
adequate care. Our practice has fallen
far short of our principle. Indeed, our
practice cannot come up to the principle
until the necessary preliminary steps
have been taken. These preliminary
steps may be analyzed.

Judging Applicants and Workers

We cannot place people wisely until
we have developed a skill and a tech-
nique of judging applicants, whether
that judgment be based on previous
experience, whether it be based on the
desire of the individual and his interest,
whether it be based on some objective
measurement of skill or of capacities —
or an interpretation based upon actual
accomplishments in present tasks — or
whatever it is, we must develop a
technique of judging people before we
begin an adequate system of scientific
placement.

Job Description

We cannot place people in positions
until we know the positions; that is,
we must make aiT adequate occupa-
tional description of every job in the
house to which the person appears as
an applicant or in which he exists as a
worker, before we can place people
where they belong. That description
must include many items, e.g., the
experience essential; the duties and
responsibilities; the conditions under
which the work is performed; how each
particular job falls in with the other
parts of the organization, the kind of a
man necessary, the inducements pro-



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The Annals op the American Academy



vided. A whole list of items must be
provided on every job before we know
whether any particular individual is
adequately adjusted to that position.

We cannot place people wisely until
we have instituted a personnel staff
with adequate training and interest to
make a study of employees and appli-
cants, and a study of the jobs; and with
authority to place the workers where
they belong, and to provide opportu-
nities for change and promotion.

When we have taken these steps we
are then in a position to begin to place
people where they may be contented,
where they may render the greatest
service \fi the company and where
every individual will have the best pos-
sible chance to make the most of him-
self. Labor will not be stable until we
have adequate placement.

Edfucation in Industry

Old Attitude. — ^The second principle
to which I want to call attention is
that edvjcaJbwn shoidd be continuous
throughout the period of service. I speak
of the individual as a worker, the
individual as a member of the organiza-
tion, the individual as a member of a
family, the individual as a citizen of
the state, the individual possibly as a
prospective junior executive. In our
practice on the problem of education
in industry we have placed a great gulf
between education (or school) and
work. Education is an isolated thing,
apart from practical life. There is
no relationship between the school and
the plant, between theory and prac-
tice. Education is identified with the
learning of reading, writing and arith-
metic — ^with the acquisition of knowl-
edge, more or less useful — ^with com-
mitting to memory the deeds of our
ancestors, more or less worthy — with
the perpetuation of cultiu^, whether
that culture be interpreted to mean
Greek, Roman, Chinese, or Germanic;



art for art's sake; culture for culture's
sake; pure learning uncontaminated by-
practical application. Keep the school
away from business; they have no
relation to each other. That is pretty
largely our practice, as far as education
in industry is concerned today.

New Attitude. — ^According to our
modem principles, education is a
profiting by experience and continues
throughout the entire period of service.
We do not graduate and have all the
learning we are ever to get and then
begin work. We should begin work
early and go to school always. There
is no gulf ^between the school and the
office.

In reading Homer it is quite possible
that the boy may be getting an educa-
tion. He is if he is profiting by his ex-
perience, so that he can read more
Greek, and come to learn a new civil-
ization, improve his own vocabulary,
or in any other way profit by his ex-
perience, but unless he does, reading
Greek has no educational value. The
young man in the plant may be profit-
ing by his experience faster than the
student in the schoolroom. The one
standard is profiting by experience.

Responsibility of Employer. — ^The em-
ployer today must stand in a position
of very great responsibiUty if this
ideal is to be carried out. He must
provide the experience that has educa-
tive value and he must stimulate the
worker to respond to the situation and
profit by the experience.

We know that in college we may pro-
vide educative experience and get no
response, and, on the other hand, a
situation which may seem to be quite
sterile may result in an adequate re-
sponse. However it is no excuse to say,
"Well, my workers aren't interested in
the work, they are shiftless, they know
they can get a better job across the
street. They don't care anything about
it and they don't profit by experience."



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141



That is no excuse. The worker will be
dissatisfied unless he can feel that his
education is continuous and that today
he is a better trained man than he was
last week, and believes that if he stays
with the company another year his
training will be much more complete
than it is now. Regardless of age,
regardless of the job, education should
be continuous throughout the entire
period of service and it should include
and have regard for the worker as an
individual, as a member of the organ-
ization, as a member of the famUy and
as a citizen of the state.

Appealing to the Individual Worker

The third principle involved in pro-
ducing stabiUty , to which I want to call
your attention, is this: We shoiUd make
appeals to many incentives to actiony and
to those incentives which make the strong-
est appeal to that particular individual.
We need to emphasize the necessity of
a manifold appeal and the appeals
which fit that particular individual.

I should like to prove in practice
that we do not do it that way — ^how in
an age or a particular class we make our
appeak primarily through one stimu-
lus, and in another age through an-
other. We speak historically of the
industrial world as a whole. I think
we can say that primarily the stimulus
to action in industry has been fear.
This fear may have been provided by
the slave driver, by the master, by the
boss, by the fear of losing the job, by
the fear of hunger, by the fear of
poverty, but, historically, fear in some
form has been the great motive in the
industrial world.

In the army, where we have had to
deal with millions of men, we rest
primarily on discipline, and discipline
may be interpreted as habit backed up
by fear. In athletics the stimulus on
which we depend has been primarily
that of competition. Occasionally it



may be loyalty to the team, to the club,
or to the alma mater. We can go on
and analyze situation after situation
and you will find in one case that an
appeal is made to the logic of the situa-
tion, and in another to the sentiments.
It may be to the ambition, it may be to
the creative impulse, it may be respect
for the family's good name, it may be
for social approval, it may be an appeal
to the lower self or to the higher self,
it may be anger or fear, or it may be
to escape one thing or to gain another.
The human individual is the most
complex mechanism of which we do
know anything at all, and may be ap-
pealed to in many ways, but in indus-
try today, we depend almost completely
upon the logic of the pay envelope.

In the ancient world industry could
probably not have been secured with-
out fear, but good results were never
secured without something in addition
to fear. In the army we probably could
never get results without discipline,
but we are convinced that we can never
get good results in the army if we de-
pend exclusively upon discipline. We
need to make appeals to the higher
nature. We need to make appeals that,
under the circumstances, bring results
to the individual and to the situation.
Here is an illustration of making the
right and the wrong appeal.*

A boy from the mountains of the
south appeared in the camp during the
period of war as a radically conscien-
tious objector, and the dictum had
gone out, " Treat 'em rough. " In fact,
the commanding officer in this case said,
"Give him hell." This mountaineer
with that treatment would in a few
days have been sent to Leavenworth as
incorrigible. That one treatment of
"Treat 'em rough" for the conscien-
tious objector worked in many cases,
but it would not work in this case.
Then a new officer was put in charge,
one who tried new tactics. He ap-



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142



The Annals of the American Academy



pealed to this conscientious objector
on the ground of duty and loyalty, that
it was his duty to advance the King-
dom of God on earth and to fight
against the enemy of truth, and he
yielded to that treatment and went to
the front. And in a single day with
his own rifle and revolver he shot 60
officers and privates in the German
Army and brought home 183 prisoners.
He was the hero of the American Army.
The motive applied was the motive
which appealed in that particular case.
A shift of motives changed that man
from a criminal to the American idol
and the greatest hero of the American
Army. In industry today we have a
lot of trouble makers, agitators, loafers,
people who are not interested in the
job, but some of them are as they are
because of the treatment they are



receiving. There are some who coidd
be converted into Sergeant Yorks of
industry if they were handled as wisely.
I have called attention to three of the
principles of personnel administration
and to the accompanying practices. If
we are to stabilize industry, if we are to
be fair to the worker, fair to industry
and fair to society as a whole, we must
see that every worker is placed where
he has the best possible chance to make
the most of himself. We must make
the most of the worker by making his
education continuous throughout the
period of his service. We must enable
him to do his best by giving him the
most adequate stimulus to action. The
task of personnel administration is not
the job for a small man or a pessimist
It is a job for a big man and an
optimist.



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Industrial Unrest Caused by the Changing Measure

of Value

By Henrt KniBALL Loud
Detroit, Mich.



INDUSTRIAL stability depends up-
on proper mental conditions as well
as upon proper material conditions in
the industrial population and in the
population served by industry. To
say that the mental condition of the
industrial population is tremendously
disturbed is merely to state a common-
place. The disturbance of mind,
however, is general throughout the
population of this country and of the
world. A study of the causes of this
unrest and a search for methods of
controlling the conditions underlying
it are of first importance among pres-
ent day problems.

Increasing Cost op Living Main
Cause op Industrial Unrest

The main cause of this unrest is the
increasing cost of living which keeps
draining out the purchasing power of
the incomes of the great mass of the
population, whether received as wages,
salaries or interest. This naturally
causes unrest and discontent. It will
continue to do so until the conditions
are changed which are doing the harm.
Strikes, class hostility, political up-
sets, radical legislative and social exper-
iments, and in some countries rebel-
lions, revolutions and wars, are the
logical consequence of the unchecked
tendencies now existing in this country
and Europe. If ever in the world's
history clear and constructive eco-
nomic and social thought was called
for, it is now.

High prices or low prices, or better,
a high price level or a ]oW price level



in itself means nothing of importance *
to a population. China's population
with her low price level should be very
prosperous and wealthy, if a low price
level is an advantage. On the other
hand, the Russian population should
be very prosperous if a high level of
prices is desirable, their prices having
multiplied many times in recent years.
As a matter of fact, there is great dis-
turbance in all civilized nations, no
matter what their price levels are or
have been, because of the increasing
cost of living which accompanies the
rising price level. It is not the high
cost of living that is doing the damage,
but the increasing cost of living
measured by the average price level
of commodities and services.

The reason that an advancing price
level causes unrest and passive or
active hostility is because of the de-
creasing purchasing power of the mone-
tary unit in which wages, salaries and
interest are paid by law and custom.
If wages or salaries rose as fast as .
prices, there would be no damage to
any class except to those whose in-
comes are based on a fixed rate and
those who hold long time contracts of
indebtedness payable in current mone-
tary units. This includes bond hold-
ers and mortgage holders. Govern-
ments lose in decreased purchasing
power of income received, but gain by
the scaling down of their indebtedness.
The dollars, repaid when the indebted-
ness matures, buy less than the dollars
given when the loan was made. This
simply robs the creditor of the return



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The Annaijs of the American Academy



which he expected to reodve. Life
insurance proceeds now purchase only
one-half of what they would have real-
ized before the war and this works
a great and unintended hardship on
an especially defenseless part of the
population.

The great trouble is that with an
advancing price level, wages, salaries,
interest, rents and taxes do not ad-
vance together. The prices themselves
do not advance together. Wholesale
prices rise quicker than retail prices
and the various commodities advance
at different times and rates. Lumber,
for example, has only in recent months
shown a spectacular advance, having
lagged behind in the race for large
profits and quick returns. Those who
advance prices the most rapidly and in
the greatest amounts profit by the slow-
ness of the others.

The Plight of Fixed Becomes
The greatest gains, however, to
business men ("enterprisers") and
speculators arise from the relative
slowness with which wages, salaries,
railroad rates, taxes, rents, interest
and other fixed charges rise compared
with the prices of commodities. The
result of it all is that tremendous and
unexpected returns have come to busi-
ness men and speculators. Average
real wages (measured in purchasing
power) actually decreased during the
war.^ Li some industries wages have
more than doubled during the war and
since then, thus keeping even with the
advancingpricesoreven gaining a little,
but this is not the case generally. The
wage earner is like a man rowing against
a swift current. He seems to be mak-
ing rapid progress through the water
but finds that he is making hardly any
progress along the shore. This is dis-
couraging and tends to make him lose
interest in his work.

^Fisher, Irving, StabUvnng the DoUar, p. 56.



The plight of salaried people in in-
dustry and elsewhere is much worse
than that of wage earners, incre^^ses in
salaries being far below the increase in
the cost of living. Salaries are much
slower to rise than wages and the re-
sult is that great numbers of salaried
men and women have left their posi-
tions in the hope of bettering their in-
comes, which have kept on decreasing
in purchasing power in spite of addi-
tions given at long intervals. Teachers
in colleges and schoob have left for other
lines of work. Postmen, policemen,
firemen and other public employees
have left the service in great numbers,
holding a grievance because of being
forced out of their chosen vocation
Few realize that the salary of the '.
ident has been practically cut in
during the last four years. The samd
has happened to the judges of thd
supreme court, and all other courts,
senators, representatives and
tors, to the governors and other state
officials, county officials, city and vil-
lage and township officials, with many
others too numerous to mention even
by general classifications. Many able
officials have resigned because their
income is now too small for them to
live up to the standard demanded by
their positions.

These losses weaken the machinery
of civilization. A police strike has
actually taken place in one of our
large cities and unions have been
formed among public school teachers.
Salaried people, the "salariat" as they
are coming to be called abroad, are
also beginning to move in the same
direction. When these classes are
hostile or discontented, the outlook is
very bad for the nation and society
generally. It means that people of
wealth and power are being separated
from those who formerly stood with
them.

Besides these classes who form such



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iNDusonuAL Unrest



145



a great and important part in industry
and its environment, there are the per-
sons whose rates of income are fixed
by contract or law. This includes
bondholders, preferred stockholders
and insurance poUcy-holders, the value
of whose income has been cut in two
during the last five years. Then there
are stockholders in the public utiUties,
including railroads, street railways,
water, gas and electric light companies.
Their real incomes have been cut from
one-third to one-half during the same
period.

The loss on the railroads while under
government control was due mainly
to the fact that wages and material
costs doubled while th^ir rates were
increased less than one-third. They
have gone back to private control with



Online LibraryJSTOR (Organization) American Academy of Political and Social ScienceAnnals of the American Academy of Political and Social Science → online text (page 54 of 59)