The economic side of works management .. . ity, both the manufacturer and the worker profit, andthe worker will have no reason to limit his output becausethere will be no rate cutting. The lines A A, Fig. 25, show how by this system a manincreases his hourly wage in a very material way by increas-ing his productivity. At the same time he cuts the unitprice per piece considerably for the firm. (See lines AA%Fig. 25.) The figure shows just how Mr. Halsey managesto make unnecessary any cuts in the unit rate. By his sys- 1 Transactions American Society of Mechanical Engineers, , p. 755, Pre
The economic side of works management .. . ity, both the manufacturer and the worker profit, andthe worker will have no reason to limit his output becausethere will be no rate cutting. The lines A A, Fig. 25, show how by this system a manincreases his hourly wage in a very material way by increas-ing his productivity. At the same time he cuts the unitprice per piece considerably for the firm. (See lines AA%Fig. 25.) The figure shows just how Mr. Halsey managesto make unnecessary any cuts in the unit rate. By his sys- 1 Transactions American Society of Mechanical Engineers, , p. 755, Premium Plan of Paying for Labor, by F. 222 THE PRINCIPLES OF INDUSTRIAL MANAGEMENT tern, the workman by increasing his wages actually cuts thecost of production. His only method of obtaining a bigreward is to cut the unit cost. Thus the employer has adecided advantage. If we look at the other term of the con-tract we find that the workman is guaranteed a standard dailywage, so that he can feel that he is not on the piece-rate sys-. FlG. S € 7 S 9 to--^ Pieces p^F^ H^ui^ww-v 25.—Comparison of Halsey and Rowan Premium Plans. tern. If the price per unit has been set too low, he is notcomjDelled to overexert himself in order to make a fair dailywage. The advantages of the Halsey system are: 1. The men are encouraged to produce more by beingrewarded in proportion to what they do. THE PAYMENT OF THE WORKMAN 223 2. The reward is immediate and substantial. 8. The employer, in sharing the gains of the extra exer-tion on the part of the worker, does not have the necessity ofcutting the rate in an arbitrary manner, hence the workmansmind is relieved of the fear of having his wages reducedarbitrarily. A British modification of the system was put into opera-tion by David Kowan & Company. Mr. Rowans wagecurve is plotted B B on the same diagram (Fig. 25), whichshows Mr. Halseys premium plan, while the Rowan piececost is shown as line B B on. the same diagram. Accord-ing to Mr. Row
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