Increasing Human Efficiency in Business

It is possible to create such units for compet.i.tion in business organizations. In some instances individual employees of one firm are pitted against those of a competing firm, the contest proving stimulating to the men in both. In other instances the compet.i.tion is restricted to the house, and similar departments or sections are the units.

The closer the parallel between the units and their activities, as in the Carnegie blast

furnaces and steel mills, the more interesting and effective the compet.i.tion becomes.

This principle has received widest recognition and achieved greatest success in the sales department. Here individuals are on a footing of approximate equality or may be given equality by a system of handicaps based on conditions in their territories. Success has also attended the pitting of selling districts against each other. These larger competing units work against bogies of the same character as do the individual ones. The whole house may be keyed up to surpa.s.s previous records or to attain some fixed standard.

To ascertain to what extent the principle of compet.i.tion was consciously employed by business firms and what methods were used to apply it in increasing the efficiency of the men, a number of successful business firms were asked the following questions:--

_How do you utilize compet.i.tion in increasing efficiency among your employees?_

(1) Do you regard it as unwise to stimulate compet.i.tion in any form?

(2) Do you encourage men to excel their own records of previous years?

(3) Do you encourage compet.i.tion between men in the same department?

(4) Do you encourage compet.i.tion between your own departments?

(5) Do you encourage compet.i.tion with departments of competing establishments?

(6) In compet.i.tion do you make it fair by "handicapping" your men?

_What reward does the winner receive, e.g_.:--

(1) Monetary reward?

(2) Promotion?

(3) Public commendation?

_In answers by equally successful managers great diversity of opinion prevailed. Some men were afraid of all forms of compet.i.tion_.

They believed that coperation was essential to success and that any form of compet.i.tion among the men tended to lessen such coperation. Most of the men interviewed believed that compet.i.tion when wisely handled is very effective in stimulating the men.

Of course, most firms try in some way to

encourage their men to excel their record of previous years. The inquiry developed, however, that a few are unwilling to employ compet.i.tion even in this mild form as a means to increased efficiency. Most of the firms made conscious use of this principle and were convinced of its potency.

Compet.i.tion between men in the same department was approved by a majority of the firms, and its adaptability to the selling department was especially emphasized. But some of the best houses will permit no such compet.i.tion. The diversity in opinion was very p.r.o.nounced in answering this question.

As to encouraging compet.i.tion between departments in the same firm, no general answer is satisfactory. Organizations differ widely.

In many houses such compet.i.tion is not practicable; in others it certainly is not to be encouraged.

In many organizations which would admit of such compet.i.tion the experiment had not been tried. In others it has become a regular practice and is looked upon with favor.

In compet.i.tion between members of the

same department or between departments the danger of jealousy and enmity seems to be so real that the greatest caution has to be observed in managing the contests. When such caution is exercised, the results are ordinarily reported upon favorably.

As to encouraging compet.i.tion with departments of rival establishments, the diversity of business makes general statements un- illuminating. Even where such a course is possible, some managers reject the practice as unwise. They believe that it is not best to recognize other houses or to consider them in this particular. A few firms report that they are able to stimulate their men successfully in this way, even though the conditions for such a contest are difficult to handle. Of those who utilize compet.i.tion a few houses employ no handicaps to put their men on the same level and make success equally possible to all.

_The principle of handicaps is so manifestly fair that organizers of contests can hardly afford to neglect this essential to the widest interest and partic.i.p.ation in the compet.i.tion_.

If the little man in a country territory doesn"t feel that he has a fighting chance to equal or surpa.s.s the man in the big agency, he makes no attempt to qualify. And the purpose of every contest, of course, is to get every man into the game.

Touching monetary rewards for the winners, there is practical unanimity of opinion.

The winner should receive a prize in cash or its equivalent. Usually the effort is to distribute the prizes so that all who excel their average records receive compensation and recognition for the additional work. In many instances unusual increases in sales or output are rewarded by a higher rate of compensation.

_That success in contests should influence promotion was generally agreed. The knowledge and energy shown are indications of capacity to occupy a better position_.

The contest merely reveals such capacity; the promotion might well follow as part of the prize for the winner or winners.

Public commendation of winners in com-

pet.i.tions is held by many firms to be bad policy. There is fear that such commendation might render the partic.i.p.ant conceited and unfit for further usefulness. A majority of firms, however, give the widest possible publicity to such commendation. This, indeed, is the reward most generally used and apparently most keenly desired by employees.

Reproduction of photographs of the winners in the house organ with an account of their achievements is the commonest acknowledgment of their success, though posting the names of the winners in various parts of the establishment is the method employed by smaller houses.

_Many important houses use compet.i.tion as part of their regular equipment for handling and energizing men_.

Particularly is this true of manufacturers and distributors of specialties, patented machines, trade-marked goods and lines, and wholesalers whose travelers are selling in territories where conditions are generally the same. Several firms of this sort make con-

scious and elaborate use of the instinct of compet.i.tion in their ordinary scheme of management.

A concrete and typical ill.u.s.tration of its application to selling is afforded by the experience and the undoubted success of one of the largest specialty houses which distributes its products direct to the consumer.

The sales force numbers about 500 men, and executives of wide experience declare that the organization is, of its size, the most efficient in the United States. a.n.a.lysis of this company"s methods is most illuminating and suggestive because every phase of the instinct of compet.i.tion has been exploited to the advantage of both the house and its employees.

The medium of compet.i.tion is a series of contests--monthly, quarterly, even yearly which bring into play all the motives urging individuals to maximum effort and industry desire to beat bogy, ambition to win in individual contest with immediate neighbors and against the whole organization, team spirit in

the matching of one group of agencies against another group, and finally organization spirit in the battle of the whole force to equal or surpa.s.s the mark which has been set for it.

_The first and basic contest here is that of the individual salesman against his bogy or "sales quota_."

This quota, the monthly amount of business which each agency should produce, has been worked out with great care and has a scientific foundation. Since the great bulk of sales are made to retail merchants, the possibilities of each territory are determined by reckoning the total population of all towns containing three retailers rated by commercial agencies. For normal months there is a standard quota, a little above the monthly average of all agencies the previous year, reckoned against their total urban populations. In "rush" months, this quota is advanced from fifteen to forty per cent, as the judgment of the sales manager dictates. If general and trade conditions lead him to believe, for instance, that the month of May should produce

$1,000,000 in orders, while the sum of the usual quotas is $800,000, he calls for an over- plus of twenty per cent. The territory containing one per cent of the total urban population of the country, as reckoned, would then be expected to make sales equal to $10,000. This would be the agency quota for the month, and the first and most important task of the agent would be to secure it.

_Because all quotas, both normal and special, are figured on the productive population of the territories and standings may be calculated by percentages, it follows that all agents are on terms of equality_.

This is essential in a contest for individual leadership as well as in team or organization matches. For at least eight months of the year, there is such a compet.i.tion for the best selling record in the entire force. Variety is given to these contests and the interest of the men sustained by changing the terms of the compet.i.tion. One month the chief prize will be given to the salesman who secures his quota at the earliest date; next month the

award will be for the individual who first obtains a fixed sum in orders, usually $2500; leadership the third month will go to the man who gets the highest per cent of his quota during the entire period; again, the honor will fall to the agent whose net sales total the greatest for the month.

_Further changes are rung and the inspirational effect of the contest immensely increased by enlarging the conditions so that every third or fourth agent is able to qualify for the month"s honors and a prize_.

Here, for instance, besides the prize for the first agent selling $2500, there will be prizes--like hats, umbrellas, and so on--for every man who closes $2500 in orders before the twentieth of the month, with the attendant publicity of having his portrait and his record printed in the house organ which goes to every agent in the field and every department and executive at the factory. Before leaving the individual contests, mention should be made of the "star" club of agents who sell $30,000 or more during the year; the presi-

dency going to the agent who first secures that total, the other official positions falling to his nearest rivals in the order in which they finish.

The team and organization contests are usually carried on simultaneously with the individual compet.i.tions. These range from matches between the forces of the big city offices, like New York, Chicago, and St. Louis, upward to district contests in which each team represents from thirty to fifty salesmen and finally to international "wars" where the American organization is pitted against all the agents abroad. Challenges from one district to another usually precipitate the district compet.i.tions; once a year there is a three months" general contest in which all the districts take part for the championship of the whole selling force.

_To announce contests is a simple matter; to organize and execute them so that they are of benefit is much more difficult_.

Unless the interest of the men is focused on the contests, they are not worth while. To

make them successful the firm under consideration utilized the following devices:--

During the contest the house organ appeared often and was devoted almost exclusively to the contest. In it the record of each salesman was printed, his quota, his sales to date, and other pertinent information.

The sheet was edited by a "sporting editor,"

and great tact and skill were displayed in giving the contest the atmosphere of an actual race or game. In addition the sales manager, the district managers, and the house executives wrote letters and telegrams of encouragement, and even made trips to the agencies that got under way too slowly.

The unique feature of the contest was the manner in which the "sporting editor" gave actuality to the contests by pictorial representations. One compet.i.tion took the form of a shooting match. The house organ contained an enormous target with two rings and a bull"s eye. When a salesman qualified with orders for $625, he was credited with a shot inside the outer ring and his name was

printed there. With $1250 in sales, he moved into the inner ring, and when his orders amounted to $2500, he was credited with a bull"s eye and his name blazoned in the center s.p.a.ce.

Another contest was represented as a balloon race between the different districts.

Each district was given a balloon, and as sales increased, the airship mounted higher. On the balloon the name of the district leader in sales was printed, while cartoons enlivened the race by showing the expedients, in terms of orders, by which the district managers and their crews sought to drive their airships higher. Each issue of the house organ showed the current standing of the districts by the heights of their balloons. This conception of the selling contest was very successful.

"Going up--going up--how far are you up now?" was used as a call, and it seemed to strike the men and inspire them. It became the greeting of the salesmen when they met, and irresistibly produced a feeling of compet.i.tion and a desire to have the district balloon go higher.