Profit-Sharing Scheme Brings Rise In Output

Press, Volume XCI, Issue 27639, 21 April 1955, Page 6

Profit-Sharing Scheme Brings Rise In Output

(Australian CcrrespomAent,

SYDNEY, April 20. Australia is giving an attentive hearing to the theories of Mr James F. Lincoln, chairman of the Lincoln Electric Company of America. Mr Lincoln, a multi-millionaire, has said that profit-sharing and incentive payments to employees could enormously increase productivity throughout the world and lower costs. He said profit-sharing could double Australia’s standard of living immediately.

Mr Lincoln, aged 70, who is on his sixth visit to this country, has come again to inspect his company’s factory in Sydney. This factory will next month introduce its own system of marginal payments for employees. These payments will be in addition to the present profit-sharing payments. Employees at the factory are already claimed to be the highest paid in Australia for their type of work. The factory paid £53,000 in profit-sharing bonuses to its 175 employees last year. This represented between 30 and 40 per cent more than the employees earned in wages. No Strikes The company has never had a strike* The new marginal payments will be calculated by a special committee of seven—three from the staff and four from the workshops. They will take into account skill, education requirements, mental fatigue, physical effort, and job conditions. Mr Lincoln said the company’s profitsharing system in America had resulted in three times the production a man-hour of its competitors. This had enabled the company to reduce the prices of its products. Over the last 13 years, the company’s employees in America had earned more in bonuses than in wages.

He added: “My factories are not sweat-shops. My men use up less physical energy than they did . before the introduction of the schemes 21 years ago.

“Better machines, better methods, and better techniques reduce the physical exertion of the employees.” Mr Lincoln said he could not see how an independent adjudicator such as Australia’s Arbitration Court could assess marginal payments in industry. Working conditions and required skill differ greatly from one factory to another.

Asked if he thought profit-sharing < was an effective answer to socialism and communism, Mr Lincoln said: “Some kind of programme which will make the individual feeX. be is part of a worthwhile organisation is completely essential if you are to make economic progress and at the same time make the individual satisfied.”

The Sydney “Daily Telegraph” comments in a leading-article: “Mr Lincoln could be just the man we need to show us how to boost our waning exports. “He is an industrial theoretician—with a difference. The difference is that he himself has by practical application proved the effectiveness of his ideas.”

Of the success of Mr Lincoln’s Sydney factory, the paper says: “It is today .competing successfully all over Asia. This year it will earn 500,000 dollars for Australia, selling welding electrodes to Japan. In Hong Kong. Singapore, and Pakistan it is beating all comers for business.

“Few Australian industries do so well in open competition. Perhaps the others need Mr Lincoln to show them how,” says the “Daily Telegraph.”