How We Can Bring Back Quality: Sharing a Piece of the Action
Boyd, Marjorie
A PRIMER ON THE ECONOMY How We Can Bring Back Quality: Sharing a Piece of the Action by Marjorie Boyd For some time now, the unlikely topic of work has been among the subjects which have...
...G M must be somewhat impressed with what it has learned, because it recently announced that henceforth it will buy all its mirrors from Donnelly...
...The Japanese industrial organization is far different from the, German, but it too contains elements of worker participation...
...Not surprisingly, it is in these frightened industries that a growing interest in worker participation can be discerned, where talk is heard of a “new relationship” between management and workers and of a “piece of the action” for workers...
...This allows for trips to the bank, doctor, or dentist, all of which in the past meant time lost from work and money lost to the timeclocked worker, as well as uncomfortable encounters with supervisors...
...In 1969, $16.5 million was divided among Lincoln’s 1,900 workers, distributing approximately $8,000 to each employee...
...The bill would require all employers at construction sites to have a licensed plumber on the premises both before work starts in the morning and after work stops in the evening (at overtime pay) to check the toilets to make sure that they have all been flushed...
...Workers now hold one third of the seats on most corporate boards of directors...
...only one canteen is used by all...
...For example, Japanese industrialists have devised hundreds of ways to disburse prestige and nourish the self-esteem of their workers...
...Richard Gerstenberg, chairman of the board of General Motors, recently put his imprimatur on the “drastic change is now necessary” school of thought: Productivity is not a matter of making employees work longer or harder...
...Came right out of college...
...The foreman reads the log books periodically and talks them over with all the team members...
...Most amazing, Lincoln’s welding machines and electrodes are still sold at 1934 prices-the year when the first profit-sharing bonus was paid-while labor, copper, steel, and other inputs have risen by 200 to 600 per cent over the same period...
...It’s no surpirse that the smaller firms have given the plans their start...
...Large Japanese corporations resemble communities...
...Workers and management work the same hours...
...I talked with Harold Main, vice president of American Velvet, a lean and affable New Englander, who has been with the company for 25 years...
...Their vacations and pensions are dependent upon seniority, not rank...
...They showed that after the time clocks were taken out absenteeism dropped from five per cent to 1.5 per cent and tardiness from six per cent to one per cent...
...A worker is a lot more likely to see the results of his extra effort in a larger profit-sharing bonus if he works in a 500-man plant than if he’s part of General Motors...
...And they have been aware of what the malaise of worker dissatisfaction does to the quality of products...
...When they do occur, they are largely ceremonial affairs which last no longer than 48 hours...
...Perhaps because of their Confucian heritage and its stress on public reputation and “face,” Japanese industrialists customarily have been generous with their employees...
...A Gallup poll shows that 56 per cent of workers admit they could produce more, while a Harris survey reveals that a majority of Americans see no reason for increasing productivity, since it would only mean more money for greedy stockholders...
...They in turn make joint decisions as to which suggestions or complaints are worthy of being passed along to management...
...Electricians are paid to watch burning lights, plumbers are paid to watch pipes, etc...
...Their successes cannot be written off as short-term wonders, since most adopted the plans 20 or 30 years ago...
...The rules may even require that the switch-flipper have a highly paid assistant...
...Why, I’m sure that after 30 years, we still have a few employees who don’t completely trust management...
...There is no executive washroom...
...Contrast this with the many workers who spend most of their time protecting their own small bailiwicks...
...When I asked him how his boss, George Meany, feels about worker participation, he answered: “We have no official position...
...Foreign businessmen lagged behind us in technology and marketing techniques, and American business was king...
...And we believe there is a lot of 19th-century romanticism in these brings workers -ani hanagement I JOURNALISTS 1 together in a joint endeavor will BUREAUCRATS ACADEMICS weaken the union hierarchy...
...American business just doesn’t seem to understand that workers need recognition...
...American executives have hoarded all symbols of status for themselves and have come up with a system that is sometimes inefficient and often degrading...
...Still, it is a fact that GM executives are now busily studying the setup at Donnelly Mirrors with an eye to adapting it to their super-corporation...
...Businessmen have also known that workers can achieve extraordinary productivity increases by finding ways to do their jobs better or faster or cheaper...
...It is a new, welllighted, clean, air-conditioned plant...
...If profit-sharing is the carrot of worker participation, then the pressure the workers exert on one another is the stick...
...Executives of much larger corporations have been descending on American Velvet in swarms, as if it were a health spa whose waters could rejuvenate their sagging sales figures...
...But the employees understood all the possible ramifications of their action, and in order to preserve the size of their profit-sharing bonuses, they managed to decrease their rates of both absenteeism and tardiness...
...Some of our industries are frightened...
...The laws have been strengthened and expanded in recent years...
...Another thing we believe in is the latest in equipment and machinery...
...The unions help them with all sorts of things, so they don’t mind the union excesses, and of course, the public is paying the bill anyway .” Worker participation, in addition to its already stated advantages, would probably help reduce the union’s stake in such outlandish featherbedding...
...This trust took years to build...
...But while we are different, we are also alike, and there is no question that the Japanese have overcome many of the problems that plague us...
...The two things you have to have are highly motivated workers and the latest in equipment, because you can be sure the foreign competition has them.’’ The world demand for velvet has been high in the past five years and American Velvet is doing well in the international market...
...The American worker has more ability to think and act independently...
...The answers are both numerous and obvious...
...It concluded that 40 per cent of every construction payroll dollar is wasted because of the union rules...
...All receive a month of sick pay yearly...
...Main talked on enthusiastically about his company’s program...
...The 18 workers were immediately given comparable or better jobs in the subsequent expansion...
...This degree of power has helped German workers become the best paid in the world...
...Polaroid, Sears Roebuck, Kaiser Aluminum, and Eastman Kodak have introduced profit-sharing plans without adopting the other tenets of worker participation, while AT&T, Monsanto, Bankers Trust, and Travelers Insurance have experimented with abandoning their assemblyline approach to office and factory and with giving workers a voice in management, but have eschewed profit-sharing...
...At the age of 45 or so a worker usually buys his own home, and the loan (at low interest rates) usually comes from the company...
...But the wisdom of this acceptance is called into question by the experiences of other countries more innovative in their industrial relations...
...But the power held by unions in the industrial equation makes it difficult for them to maintain a completely neutral position on any question involving work...
...Worker participation clans would start to break down the wall between the two, and the immense power of some union officials would crumble along with it...
...Japanese unions are company unions, and thus count everyone but top management as members...
...They do so because they believe it is right, but also because they know it contributes to efficiency...
...some have begun to include descriptions of one solution: worker participation plans, which allow workers a voice in how their work is organized, coupled with profit-sharing plans tied to increases in productivity (output per man-hour) making the employees, in a sense, partners in the business...
...Well, they would have to do it on a plant by plant basis...
...and the auto makers are starting to stumble...
...Even though all employees were on straight salaries, Donnelly did keep records, as they do on all experiments...
...We must increase an employee’s satisfaction - % and, as far as is feasible, involve the employee personally in decisions that relate directly to his job...
...Until recently, knowledge of how the rules operated and of the overall extent of their abuse was difficult to obtain...
...So, unlike foremen in other countries, he does not always appear in the role of management lackey, passing along orders from “them” to “us...
...Every year 27 per cent of company profits before taxes goes to the workers (this came to some $900 per worker last year...
...since the Japanese seem to prefer written communication, each worker is required to keep a log book of complaints or problems along with suggestions he may have for improving design or methods of assembly...
...steel and textiles are being hard pressed by the newly aggressive foreigners (prompting U. S. Steel to begin a saturation campaign of TV ads about productivity...
...Hostilities between workers and management have always been intense in this country and have been accepted as an inescapable fact of industrialized life...
...Building trust-it can’t be done overnight...
...Last year, one Donnelly employee figured out a way to eliminate an entire process, thereby saving an enormous amount of money and abolishing 18 jobs including his own...
...The key word at Donnelly is creativity...
...Donnelly has doubled its productivity since 1952 and lowered its prices...
...The only indication of rank is various color stripes on the helmets...
...Although few would argue that American business is no longer king, it is generally acknowledged that several would-be successors are gathering at the foot of the throne...
...In Orange, Virginia, the American Velvet Company has just opened a subsidiary plant run on the same worker participation principles as its parent company...
...You know what I heard from more than one guy at work...
...The only companies that have given complete worker participation plans a real trial are several small and medium-sized companies scattered around the country...
...When he lands, new cars whisk him and his retinue into town...
...The practice most frequently mentioned concerns “union work rules...
...And economists who study productivity problems are concerned that many union practices are undermining productivity...
...The experience of some of the nation’s 1 on ge s t-running worker participation plans may finally provide the answer as to how the plans can be sold to reluctant management...
...Let’s put it this way, we are skeptical...
...The practice became widespread in the 1950s, back when the experts were predicting that it would be only a matter of time until we were all replaced by machines...
...The crusty bureaucratic structure of a large corporation is naturally unfriendly to any idea involving such disruption in the comfortable day-today life of management...
...old equipment...
...But the very success of these experiments increases the frustration of those who have attempted to extend worker participation plans to much larger portions of industry...
...These are rules sought by unions ostensibly to protect the job security of workers...
...Last year, Engineering NewsRecord, a respected engineering journal, came out with an extensive survey of the union work rules in the construction industry...
...Lincoln’s prices have been held steady by the extraordinary efforts of its employees both to produce more individually and to find ways to improve the manufacturing ‘process so that overall costs have not risen...
...Our economy has seemed invincible, our inflation manageable, and our natural resources abundant...
...In two major industries, steel and coal, the corporate boards are made up of equal numbers of workers and stockholders, plus one “neutral” member (usually a clergyman or college professor or some respected figure trusted by both sides...
...A small change, but one which removes a large irritation from the lives of many...
...Productivity and profits are way up at American Velvet, and this in an industry where labor trouble and foreign competition have bankrupted many other companies...
...What most foreign visitors notice first about Japanese factories is the absence of class tensions so prevalent in other countries...
...Even if that figure turns out to be inexact, it indicates the trend...
...It’s worth mentioning, too, that public support for productivity has not been overwhelming...
...experience indicates that in the long run automation actually increases the number of jobs, both for computer programmers and lower level workers, because it greatly increases productivity and allows for expansion...
...We pay the highest wages in the industry...
...Most companies not only pay a percentage of employees’ insurance premiums and contribute to pension funds, but also build and maintain for their employees’ use such facilities as gymnasiums, swimming pools, athletic stadiums, tennis courls, and concert halls...
...The unions negotiate wage increases and related questions much as American unions do, but because of a Japanese law which requires publication twice yearly of the most intimate details of every company’s balance sheet and profit statement, the unions are able to keep their demands quite closely attuned to what the traffic will bear...
...It was the luckiest thing that ever happened to me...
...Last week we had a group from Procter & Gamble,” Main continued cheerfully...
...The American Velvet Company of Stonington, Connecticut, instituted a worker participation plan more than 30 years ago...
...Maybe it will turn out that Adam Smith was right about some things...
...going against a law of nature...
...If my kid wants to work in a factory, I am going to kick the hell out of him.’ ” I talked with C. R. Brown, American vice president and general manager of Mazda Motors, about the differences in the Japanese and American systems...
...And a Chicago steelworker recently told Studs Terkel, “A mule, an old mule, that’s the way I feel...
...There is the feeling here that work has always been boring and hard and that the university professors are more worried about it than the workers...
...This can mean that a workman receives a full day’s pay for standing around, his only contribution to the national economy and his company’s performance being to flip a switch on in the morning and off in the afternoon...
...They provide housing for their employees at low rentals-a housing park for married couples and hostels for unmarried men and women workers...
...The workers are encouraged to offer opinions about their work...
...What you have is a union elite which is perpetuating itself,” says Ralph Nader...
...Studies have shown conclusively that when workers are given the incentive of profit-sharing, combined with encouragement to offer their own ideas about the way their work can be done faster and better, they quickly unleash stores of energy and creativity...
...As Saab Motors put it in an ad showing smiling Swedish workers who build cars in teams rather than on assembly lines, “Bored People Build Bad Cars...
...For the evidence shows that not only does worker participation improve the dignity and excitement of the employee’s task, but it also can greatly improve his productivity...
...This minor change has decreased absenteeism and resulted in increases in productivity from one to five per cent...
...Everyone wears a uniform, usually a blue denim coverall and a helmet...
...Most of these fears have turned out to be exaggerated...
...Moreover, through most of the past three decades there has been little pressure on business to consider such revolutionary change in order to increase productivity...
...In another case at Donnelly, a maintenance man invented a machine for beveling mirror edges, a machine that costs only $290 instead of the $900 for the machine Donnelly had been using...
...They have opened a plant in England...
...Some other large corporations are sticking their toes in the worker participation water by instituting flexiblehour plans in which the workers set, within reason, their own eighthour work periods...
...And if workers and management do develop even a degree of mutual trust, it can only have the effect of forcing the unions to abandon some of their more outrageous abuses, abuses which TaftHartley and Landrum-Griffin have been unable to curb...
...The reason for the Japanese worker’s higher productivity is the fact that he receives recognition for his work...
...Strikes are nearly extinct in Japan...
...You can’t save any money by using...
...And of course, profit-sharing means problems with the stockholders, and changes in the manufacturing process often involve initial capital outlays...
...workers participating in profit-sharing plans tied to productivity increases would see the advantage in using their newly acquired power to put a stop to practices which are so clearly hurting productivity...
...But the interesting question to me is where are all the Republican senators who used to speak out for the companies and attack the unions...
...The shoe industry has been all but wiped out by imports...
...Most politicians, needing labor sup port and campaign contributions, not only refuse to speak out against union work rules, but even try to have them put on the law books...
...Most businessmen have known for years, from the results of various experiments and from their own experiences, that the key to increasing productivity is the individual worker’s attitude...
...What if American business, in a desperate effort to keep pace with foreign competition, improves the lot of workers in a way never even contemplated by the unions...
...And the company books are open to all...
...American Velvet’s Main was emphatic about the importance of trust in reforming factory life...
...I talked with Jack Sessions at the national AFL-CIO headquarters, a venerable gentleman, full of charm, who quoted Shaw as he expressed disdain for the “intellectuals...
...representatives of the worker force and management sit down together at daily meetings to open the mail and discuss purchasing, sales orders, new equipment, and personnel problems...
...Back to Adam Up to now, leaders of organized labor have been less than enthusiastic about worker participation plans...
...any officer can fly in one of the corporation’s 18 private planes...
...Before he arrives at the hotel, a public relations man checks out his suite to make certain, among other things, that flowers are in place...
...U and I Make Quality’ The Lincoln Electric Company in Cleveland, Ohio, instituted a system of worker participation and profitsharing nearly 40 years ago...
...Profit-sharing is no substitute for good wages...
...Japan was a late developer industrially and thus had the benefit of the experiences...
...How the Foreigners Do It To take one notable success story: soon after World War 11, West Germany pa&ed laws making a form of worker participation in business mandatory...
...An example is a “health” bill introduced every year for the last 10 years in the New York legislature and once only narrowly defeated by an intensive lobbying effort of building contractors...
...Of course, all this organized togetherness and civility would be suffocating for many Americans Many of these ideas probably would no more be adaptable to our highly individualistic, boisterous, and probably more creative work force than most of us would want to rise at dawn and stand naked under a waterfall and recite poetry, as the Japanese are fond of doing...
...contented” has become a cliche in descriptions of them, as has “phenomenal” in describing their productivity...
...Experimentation in worker participation has been going on outside the frightened industries as well, but most of it has been of a piecemeal nature...
...And now, large corporations, attracted by the astonishing productivity records of these smaller companies, are studying the way they work...
...Some union work rules limit the use of labor-saving machines, others put limits on an individual worker’s output, while others require that a certain type of worker be present when a certain type of machine is used...
...Most of these articles on work have concentrated on the problem, but Marjorie Boyd is a Washington writer...
...Most industrial work in Japan is performed in teams of 15 or so workers led by a foreman who is a union member and works along with his team...
...Recently Donnelly employees voted to eliminate time clocks, a move that could have resulted in a sharp increase in operating costs because it also required full pay for absent workers...
...Displaying considerable elan, Donnelly is charging G M for the privilege...
...All the workers are encouraged to think of creative changes...
...Today workers and management have little contact with one another except through the unions...
...Any problem can be solved if you are open and honest with your employees and they trust you...
...But perhaps the biggest obstacle to worker participation has been its requirement that workers be allowed to have a voice in the way things are done, which means that management must give up some of its own power and prerogatives...
...Japanese workers are certainly not superior to American workers...
...Employers agree to the rules because they want to avoid strikes and other labor troubles and because they know they can pass the extra costs along to the public...
...Often the workeris the one most likely to think of a “better way,’’ because he is most familiar with the details of the manufacturing process...
...You travel like an oil sheik...
...Main and I exchanged smiles at the prospect of G M breaking itself up into small units and becoming completely honest and open...
...Since they have long been recognized as among the world’s most astute businessmen, greatly concerned with profits, we can safely assume that they also believe a humane system contributes to efficiency...
...Intent men and women tend the large looms working in rooms where the noise is ear-splitting, but the workers wear comfortable-looking ear plugs, something like those used with a dictaphone transcription machine...
...Other rules make it nearly impossible to fire a lazy, incompetent, or drunken employee...
...A deluge of words has poured forth exploring not only the dissatisfaction of the blue-collar ,worker, but the sterility of life on the office “paper assembly line...
...Leonard Woodcock of the United Auto Workers has called the idea “elitist” and a young . auto worker reports an argument with Woodcock over the boredom question: “I told Woodcock that if he had to answer the phone every 32 seconds and say the same thing, he’d understand...
...American Velvet has not had a labor dispute since it adopted a worker participation system...
...We must improve working conditions and take out the boredom from routine jobs...
...We tell all these businessmen that the most important thing is trust...
...A PRIMER ON THE ECONOMY How We Can Bring Back Quality: Sharing a Piece of the Action by Marjorie Boyd For some time now, the unlikely topic of work has been among the subjects which have most occupied journalists...
...Perhaps understandably, the unions have taken full advantage of this situation...
...Donnelly Mirrors, a medium-sized company in Michigan, instituted a plan in the early 1950s in which workers participate in both management and profit-sharing...
...It would involve considerable decentralization...
...The potential for irony in the present situation is great...
...The firms also provide scholarships and loans for the education of their employees’ children, and they maintain dormitories in Tokyo where the offspring can live for free while studying at the universities...
...While Japanese union representatives serve with members of management on joint productivity councils which meet twice monthly, the U. S. labor leaders I spoke with believe productivity is management’s problem alone...
...While the traditional industriousness of the Germans is no doubt partly responsible for this success, their system, which gives a degree of power and recognition to workers, must also be given at least a share of the credit...
...Since the work ethic is tattooed on American brains, unhappiness with work often manifests itself tragically, in moody withdrawal from family and friends, alcoholism, mental illness, and drug addiction...
...But it is impossible for the worker who loses his job to a machine to take the long view, and his situation evokes strong sympathy from all fellow humans who feel vaguely threatened by mechanization...
...A few large Japanese corporations even publish literary magazines for their more cultured employees...
...Most Japanese factories do not have time clocks and assume everyone is present and on time unless some Drior arrangement for absence or lateness has been made...
...of other countries...
...And what if corporations find that in order to motivate workers they must share their profits and open up their policy-making decisions, something the federal trust-busters and regulators have sought unsuccessfully for years...
...I asked Main how a large corporation like, say, General Motors, could go about setting up a worker participation plan...
...A . large banner across the ceiling reads: “It Takes U and I to Make Quality...
...It is widely reported that the principal villain in all this misery is a system which carries assembly-line organization to an absurd extreme , withering the selfesteem that comes from pride in work...
...John DeLorean, a former president of Chevrolet, told Fortune that he believes many bad judgments made by GM executives can be traced to the way they have separated themselves and their everyday lives from the problems of the real world...
...You can’t run a plant without a man to sweep the floor, and if he likes his job and shares in the company’s profits, he will not only sweep the floor well but will tell you about a better and cheaper broom, if he knows of one...
...It also encourages workers to think of their jobs in terms of tasks to complete rather than hours spent in a certain place...
...The system is different...
...This doubled many workers’ yearly earnings...
...A Piece Of the Action If worker partkipation promises more satisfied workers earning more money, better products, and higher profits, why didn’t business pounce on the idea long ago...
...Innovative work schemes have turned some forms of labor from wage slavery into more humane arrangements in the few places where they have been introduced...
...By picking and choosing ideas and adding them to their own customs, the Japanese have concocted an extremely complex system, but one which certainly seems to work well for them...
...What we stress is that every single worker is vitally important to your operation...
...After deductions for taxes, reserves, and stockholder dividends of six per cent, all the remaining profits are distributed to the employees...
...Technically, of course, they are right...
...Their silence can only mean that the companies don’t really mind so much what is going on because they are in collusion with the unions in many cases...
Vol. 5 • February 1974 • No. 12
