INCENTIVES IN INDUSTRY

Press, Volume XCIII, Issue 27907, 2 March 1956, Page 10

INCENTIVES IN INDUSTRY

Suggested Counter To Labour Shortage

AUSTRALIAN FIRM’S EXPERIENCE “New Zealand is a tremendously important county, but it is not developing* so quickly as it should, and you say that the trouble is that you haven’t the i manpower. You have all the manpower you need and more, if only you would develop the capabilities and arouse the enthusiasm of the people who work for you. as you as management shoul This was the challenge which Mr William Miskoe, managing director of Lincoln Electric (Australia) Pty., Ltd., gave to membeis of the New Zealand Institute of Management and the Institutes of Welding and Plan Engineers in an address in Christchurch last evening. “The trouble is that we enter into this whole arrangement of industry on the assumption that we, as the management, have some gift, power, or right to take the future of the staff into our own hands and do with it as ve please,” he said. “This attitude is typical of industry today.” What management did not realise was that it was dealing with a worker who was, year by year, becoming more and more educated, who sought the opportunity to apply that education, and yet was stifled by a system 159 years out of date, he said. Importance of Employees

“No man is employed in any industry if he is not needed—no-one hires a man he doesn’t want,” said Mr Miskoc. “Every person in your plant is part of the total activity of your organisation. and is important to that activity. If he is necessary, he is important. “If we recognise that every man is important, there should be an immediate effect on us, the management. We should recognise that he has problems. too. We should treat him with respect, and appreciate him. We should start wanting to take care of him because he is the most important asset we have.” When, 14 ; ears ago. he took charge of an Australian factory, he saw that the wages set by the Arbitration Court were stifling opportunities and holding down production to’ that of the slowest man, said Mr Miskoe. “We as management passed our problems to the Court, and there they were handled by our organisation, on the one hand, and the people’s union on the other—but it is we, the management, who know best what each job and man is worth in our- plant,” he said.

In his company, said Mr Miskoe, the problem was tackled by “jobevaluating” every task in the plant. Where a group of men. under the award, were paid the same amount for jobs requiring varying skill, the award rate was taken as a minimum, and the rates for the more highly-skilled jobs in the same group were stepped up. Mere seniority was not allowed to stand in the way of able men. Production Gains

“Next, we tackled production, and worked out a system of production incentives based on the cost of each unit produced.” he said. “If a man made £l5 a week, and then doubled his production, he was paid £3O. Some people increased their production by 25 to 100 per cent.” On top of this, an annual bonus was paid on a profit-sharing basis, Mr Miskoe said. This was not pro rata, based on the man’s wage, but took into account his production, the quality of his work, the amount of supervision he required, the amount of instruction needed, and his co-operation on the iob. These factors were judged quarterly. But over all these incentives, said Mr Miskoe, the people themselves were given a voice in management through an advisory council of elected representatives from the staff, and departmental heads. “This recognition leads to a degree of co-operation which would amaze you.” he said. The result in his company, said Mr Miskoe. had been that his staff were now the highest-paid in the British Commonwealth —profit-sharing bonuses alone of £330.000 had been paid out in thp last 14 years, £67.000 last year to 147 persons. Prices Kept Down

His company’s prices had risen only 29 per cent, on 1939 levels, in spite of a rise of up to 150 per cent, in other companies in the same field, and they were successfully competing in Japan and India in the international market, as well as expanding their activities in Australia, said Mr Miskoe. “As the cost of production goes down, prices go down, more people can buy our products, and so the standard of living rises,” said Mr Miskoe. “If he can see that this is the result of his production, a man will work for it, because he will work for his country just as he is prepared to fight for it.

“Our responsibility as management is to give him that opportunity. When he sees that opportunity and wants to work, you will be amazed to discover just what a man is capable of,” he said.