Increasing Human Efficiency in Business

If a workman, clerk, or salesman knows that his immediate chief is interested in him personally, that he understands what service is being rendered and is anxious to forward his welfare as well as that of the house, there is no effort, inconvenience, or discomfort which he will not undertake to complete a task which the boss has undertaken. Throughout the entire organization, the sympathy and coperation of the men above with the men below is essential for securing the highest degree of loyalty. No a.s.sumed or manufactured sympathy, however, will take the place of the genuine article.

_Personal Relationship with Workers as Basis for creating Loyalty_

The effectiveness of human sympathy in creating loyalty is most apparent in one-man businesses where the head of the house is in personal contact with all or many of his employees.

This personal touch, however, is not necessarily limited to the small organization.

Many men have employed thousands and secured it. Others have succeeded in impressing their personalities, and demonstrating their sympathy upon large forces, though their actual relations were with a few. The impression made upon these and the loyalty created in them were sufficient to permeate and influence the entire body. Potter Palmer, the elder Armour, Marshall Field, and Andrew Carnegie were among the hundreds of captains who made acquaintance with the men in the ranks the cornerstone on which they raised their trade or industrial citadels.

When the size of the organization precludes personal contact, or when conditions remove

the executive to a distance, the task of maintaining touch is frequently and successfully intrusted to a lieutenant in sympathy with the chief"s ideals and purposes. He may be the head of a department variously styled, --adjustments, promotion and discharge, employment, labor,--but his express function is to restore to an organization the simple but powerful human relation without which higher efficiency cannot be maintained. In factories and stores employing many women this understudy to the manager is usually a woman, who is given plenary authority in the handling of her charges, in reviewing disputes with foremen, and in finding the right position for the misplaced worker. Whether man or woman, this representative of the manager hears all grievances, reviews all discharges, reductions, and the like, and makes sure that the employee receives a little more than absolute justice.

Many successful merchants and manufacturers, however, disdain agents and intermediaries in this relation and are always ac-

cessible to every man in their organizations; holding that, since the coperation of employees is the most important single element in business, the time given to securing it is time well spent.

Even though human sympathy may well be regarded as the most important consideration in increasing loyalty, it is not sufficient in and of itself. The most patriotic citizens are those who have, served the state. They are made loyal by the very act of service.

They have a.s.sumed the responsibility of promoting the welfare of the state, and their patriotism is thereby stimulated and given concrete outlet. A paternalistic government in which the citizens had every right but no responsibility would develop beggars rather than patriots.

Similarly in a business house ideally organized to create loyalty, each employee not only feels that his rights are protected, but also feels a degree of responsibility for the success and for the good name of the house.

He feels that his task or process is an essen-

tial part of the firm"s activity; and hence is important and worthy of his best efforts. To cement this bond and make closer the identification of the employee with the house many firms encourage their employees to purchase stock in the company. Others have worked out profit-sharing plans by which their men share in the dividends of the good years and are given a powerful incentive to promote teamwork and the practice of the economies from which the overplus of profit is produced.

_Loyalty may be developed by Education in House History and Policies_

The stability of a nation depends on the patriotism of its citizens. Among methods for developing this patriotism, _*education_ ranks as the most effective. In the public schools history is taught for the purpose of awakening the love and loyalty of the rising generations.

The founders, builders, and saviors of the country, the great men of peace and war who have contributed to its advancement, are held up for admiration. From the recital of what

country and patriotism meant to Washington, Jefferson, Lincoln, Grant, and a host of lesser heroes, the pupils come to realize what country should, and does, mean to them. They become patriotic citizens.

_Grounding the New Employee in Company Traditions and Ideals_

In like manner the history of any house can be used to inspire loyalty and enthusiasm among its employees. Business has not been slow to borrow the methods and ideals of education, but the writer has been unable to discover any company which makes adequate use of this principle. That this loyalty may be directed to the house as a whole, and not merely to immediate superiors, every employee should be acquainted with the purposes and policies of the company and should understand that the sympathy which he discovers in his foreman is a common characteristic of the whole organization, clear up to the president.

The best way to teach this is by example-- by incidents drawn from the past, or by a

review of the development of the company"s policy.

To identify one"s self with a winning cause, party, or leader, also, is infinitely easier than to be loyal to a loser. For this reason the study of the history of the firm may well include its trade triumphs, past and present; the remarkable or interesting uses to which its products have been put; the honor or prestige which its executives or members of the organization have attained; and the hundred other items of human interest which can be marshaled to give it house personality. All this would arouse admiration and appreciation in employees, would stir enthusiasm and a desire to contribute to future achievements, and would foster an unwillingness to leave the organization.

Some companies have begun in this direction.

New employees, by way of introduction, listen to lectures, either with or without the accompaniment of pictures, which review what the house has accomplished, define its standing in the trade, a.n.a.lyze its products and

their qualities or functions, sketch the plan and purpose of its organization, and touch upon the other points of chief human interest. Other companies put this information in booklets.

Still others employ their house organs to recall and do honor to the interesting traditions of the company as well as to exploit the successful deeds and men of the moment. An organized and continuous campaign of education along this line should prove an inexpensive means of increasing loyalty and efficiency among the men. To the mind of the writer, it seems clear that the future will see p.r.o.nounced advances in this particular.

Personality can be overdone, however.

Workers instinctively give allegiance to strong, balanced men, but resent and combat egotism unchecked by regard for others" rights.

Exploitation of the employer"s or foreman"s personality will do more harm than good unless attended by consideration for the personality of the employee. The service of more than one important company has been made intolerable for men of spirit and creative ability

by the arrogant and dominating spirit of the management. The men who continue to sacrifice their individuality to the whim or the arbitrary rule of their superiors, in time lose their ambition and initiative; and the organization declines to a level of routine, mechanical efficiency only one remove from dry- rot.

_How Efficiency and Loyalty of Workers may be Capitalized_

Conservation and development of individuality in workers may be made an important factor in creating loyalty as well as in directly increasing efficiency. Great retail stores put many department heads into business for themselves, giving them s.p.a.ce, light, buying facilities, clerks, and purchasing and advertising credit as a basis of their merchandising; then requiring a certain percentage of profit on the amount allowed them. The more successful of Marshall Field"s lieutenants were taken into partnership and, as in the case of Andrew Carnegie and his "cabinet of young

geniuses," were given substantial shares of the wealth they helped to create.

Some industries and stores carry this practice to the point of making specialized departments entirely independent of the general buying, production, and selling organizations whenever these fall short of the service offered outside; while the principle of stock distribution or other forms of profit sharing has been adopted by so many companies that it has come to be a recognized method of promoting loyalty.

Regard for the employee"s personality must be carried down in an unbroken chain through all the ranks. It may be broken at any step in the descent by an executive or foreman who has not himself learned the lesson that loyalty to the house includes loyalty to the men under him.

It is not uncommon, in some American houses, to find three generations of workers --grandfather, father, and apprentice son-- rendering faithful and friendly service; or to discover a score of bosses and men who have

spent thirty or forty years--their entire productive lives--in the one organization.

Where such a bond exists between employer and employees, it becomes an active, unfailing force in the development of loyalty, not only among the veterans, but also among the newest recruits for whom it realizes an ill.u.s.tration of what true coperation means.

_Many Examples of the Loyalty of Executives for their Men in Danger_

This double loyalty--to the chief and to the organization--is not a plant of slow growth. Few mine accidents or industrial disasters occur without bringing to merited, but fleeting, fame some heroic superintendent or lesser boss who has risked his own life to save his men or preserve the company"s property. The same sense of responsibility extends to every grade. Give a man the least touch of authority and he seems to take on added moral stature. The engineer who clings to his throttle with collision imminent has his counterparts in the "handy man"

who braves injury to slip a belt and save another workman or a costly machine, and in the elevator conductor who drives his car up and down through flames and smoke to rescue his fellows. Such efficiency and organization spirit is the result of individual growth as well as the impression of the employer"s personality upon his machine.

_A Disloyal Sales Manager and his Influence on his Force_

On the other hand, lack of loyalty on the part of employers towards their men is almost as common as failing devotion on the part of workers. Too many a.s.sume that the mere providing of work and the payment of wages give them the right to absolute fidelity, even when they take advantage of their men. The sales manager concerned in the following incident refused to believe that his att.i.tude towards his men had anything to do with the lack of enthusiasm and low efficiency in his force.

An experienced salesman who had lost his

position because of the San Francisco fire applied to the sales manager for a position.

He was informed that there were fifteen applicants for the Ohio territory, but that the place would be given to him because of his better record. The manager laid out an initial territory in one corner and ordered the salesman to work it first.

Working this territory, the salesman secured substantial orders, but refrained from "over-selling" any customer, gave considerable time to missionary work and to cultivating the acquaintance of buyers. His campaign was planned less for immediate results than for the future and for the effect on the larger field of the state. Having no instructions as to pushing his wider campaign, in about sixty days he asked for instructions.

In answer he was ordered home and discharged on the ground that business was dull and that he had been a loss to the house. During the sixty days he had been working on a losing commission basis with the expectation of taking his profits later. Investigation dis-

closed that he was but one of five salesmen to whom the Ohio territory had been a.s.signed simultaneously. Of the five, one other also had made good and had been retained because he could be secured for less money.

This multiple try-out policy is entirely fair when the applicants know the conditions.

But to lead each applicant to believe that he has been engaged subject only to his ability to make good is manifestly unjust. The facts are bound to come out sooner or later and create distrust among all employees of the house. Loyalty is strictly reciprocal. If an employee feels that he has no a.s.surance of fair treatment, his att.i.tude towards the firm is sure to be negative. Even the man who secures the position will recognize the firm"s lack of candor and will never give his employers the full measure of coperation which produces maximum efficiency.

The "square deal," indeed, is the indispensable basis of loyalty and efficiency in an organization. The spirit as well as the letter of the bargain must be observed, else the work-

men will contrive to even up matters by loafing, by slighting the work, or by a minimum production.

This means a loss of possible daily earnings. On the other hand, employees never fail to recognize and in time respect the executive who holds the balance of loyalty and justice level between them and the business.

Fair wages, reasonable hours, working quarters and conditions of average comfort and healthfulness, ordinary precautions against accidents, and continuous employment are all now regarded as primary requirements and are not sufficient to create loyalty in the men. More than this must be done.

The chief executive should create such a spirit that his officers shall turn to him for help when in perplexity or difficulty. The superintendent and officers or bosses should sustain this same sympathetic relationship toward their men that the executive has toward his officers. A reputation for taking care of his men is a thing to be sought in a chief executive as well as in all underofficers.

Personal relationships should be cultivated.

In some large organizations the chief executive may secure this personal touch with individuals through an agent or through a department known as the department of "promotion and discharge," "employment," or "labor." In others, occasional meetings on a level of equality may be brought about through house picnics, entertainments, vacation camps, and so on, where employer and employee meet each other outside their usual business environment.

It is not worth while to attempt to develop loyalty to the house until there has been developed a loyalty to the personalities representing the house. Loyalty in business is in the main a reciprocal relationship. The way to begin it is for the chief to be loyal to his subordinates and to see to it that all officers are loyal to their inferiors. When loyalty from above has been secured, loyalty from the ranks may readily be developed.

The personality of the worker must be respected by the employer. "Giving a man a chance" to develop himself, allowing him

to express his individuality, is the surest way of enlisting the interest and loyalty of a creative man.

To identify the interests of employees with the interests of the house, various plans of profit sharing, sale of stock to employees, pensions, insurance against sickness and accident, and so on, have been successfully applied by many companies.

So far as possible, responsibility for the success of the house should be a.s.sumed by all employees. In some way the workmen should feel that they are in partnership with the executives. We easily develop loyalty for the cause for which we have taken responsibility or rendered a service.

_Creating Loyalty to Firm itself by Educational Campaign_

A perpetual campaign of publicity should be maintained for the benefit of every man in the employ of the house. In this there should be a truthful but emphatic presentation of acts of loyalty on the part of either employers or

workmen. Everything connected with the firm which has human interest should be included in this history. This educational campaign should change the loyalty to the _*men_ in the firm into loyalty to the _*firm_ itself. It should be an attempt to give the firm a personality, and of such a n.o.ble character that it would win the loyalty of the men. This could be accomplished at little expense and with great profit.

CHAPTER V

CONCENTRATION

AS A MEANS OF INCREASING HUMAN EFFICIENCY

THE owner of one of the largest and most complex businesses in America handles his day"s work on a schedule as exacting as a railway time-table. In no other way could he keep in touch with and administer the manifold activities of his industry and a score of allied interests--buying of the day"s raw materials for a dozen plants in half as many markets, direction of an organization exceeding 20,000 men, selling and delivering a mult.i.tude of products in a field as wide as three continents, financing the whole tremendous fabric.