The Press WEDNESDAY, DECEMBER 15,1948. Incentive Payments

Press, Volume LXXXIV, Issue 25678, 15 December 1948, Page 4

The Press WEDNESDAY, DECEMBER 15,1948. Incentive Payments

Much attention is now being given in Australia to incentive payments systems in industry; and the New Zealand Press Association correspondent’s report yesterday that the Australian Labour Party is expected to sponsor both the introduction of these schemes and secret ballots in union elections, in order to stimulate production and promote industrial harmony, has special interest for New Zealand. Nearly a year ago the Minister of Labour (Mr McLagan) announced that his department would soon survey incentive payment schemes operating in New Zealand in order “ to ascer- “ tain the extent to which such “schemes are in use, the types of “scheme operating, and the views “of employers and trade unions on “the results obtained”. Little has since been heard of the progress of the survey, except that manufacturers some months ago took exception to the method followed by the department in seeking information by direct approach to individual firms instead of through national trade organisations. The result was that members of the Manufacturers’ Federation were advised, for the.time being, at least, to give the department no information. It was clear from the reports of manufacturers’ meetings that members suspected the department’s motives and feared that the inquiry might lead to restrictions being placed on schemes which had not only achieved their main purposes of increasing production but had also given satisfaction to both employers and employees The Sydney correspondent’s report makes it clear that Australian manufacturers in general dislike giving publicity to their incentive payment or profit-sharing schemes, and no doubt for much the same reasons. Nevertheless, some leading Australian industrialists apparently believe that only good can come from being as open as the day about their methods. The “ Sydney Morn- “ ing Herald ” has recently printed a series of special articles by industrialists, business experts, labour leaders, and others, all dealing with the incentive payment system from their points of view; and in some of these articles detailed information about the organisation and the results of particular schemes have been clearly set out. All emphasise that incentive plans are not merely schemes to induce the worker to work harder for a little more money; they are also schemes to make management manage better. Each scheme must be fair to employer and employee, rates must be set that can be attained without strain by the average worker, the rewards must be commensurate with the extra production achieved, and the scales of pay must not be altered unless the methods or conditions of work change. It is emphasised that nothing should be done to destroy the confidence of both parties that each is getting a fair deal. Mr J. Ferguson, M.L.C., New South Wales president of the Australian Labour Party, the author of one of these articles, eloquently put the case for a new union attitude toward piecework and bonuses. Present opposition, he declared, was mainly on political rather than industrial grounds. Although the desperate need for increased production justified incentive payment systems under safeguards that would protect the workers, he argued, opposition must still be expected from the Communists, who sought only to depress production and to promote economic crises. Incentive payment systems in Australia are reported to have increased the output of individual firms by 40 per cent, to 60 per cent. In the majority of those firms the relations between management and labour are excellent. The results, in other words, have been attained without “ sweating ” and without hurting the aged worker or the slow worker. Progress in New Zealand has been slower—although some firms are known to have operated similar schemes with the same happy results for employers, employees, and the community—because organised labour has been suspicious and unhelpful. The last annual conference of the Labour Party, dealing with a remit proposing that these schemes should be encouraged, adopted a resolution in which all the emphasis was on restriction rather than encouragement. The terms of the resolution would, indeed, prevent any firm introducing piecework, incentive payment systems, bonuses, or profitsharing by direct arrangement with its employees; all such negotiations would have to be made with the union and with the approval of the Wages Commissioner. It was also proposed that joint production councils should be mandatory in all industries where these schemes operate. Perhaps because profit-sharing and incentive payments are among the main planks of the platform of its political opponents, the Government has regrettably failed in its duty in this matter. It has lectured and pleaded and exhorted; but it has not persuaded the New Zealand worker to work harder or to produce more. Incentive schemes scientifically prepared and fairly applied would unquestionably help to solve this country’s problems of manpower shortage and under-produc-tion. The Government should waste no further time in giving them its authoritative support.