WORKERS’ POINT OF VIEW ON INCENTIVE PAYMENTS

Press, Volume XCVIII, Issue 28887, 6 May 1959, Page 16

WORKERS’ POINT OF VIEW ON INCENTIVE PAYMENTS

Personal relationships must be put right in the work place before the management thought of introducing an incentive scheme, Mr N. S. Woods, the chief research officer of the Department of Labour, Wellington, told the Canterbury Division of the New Zealand Institute of Management last evening. Illustrating his point, Mr Woods said no-one would be so foolish as to try to pull a ship in a northerly direction by having one tug-boat pulling the ship north and another pulling it south. “Admittedly, if the north-bound tugboat is more powerful some progress will be made,” he said. “That is just what one company did when it put in its incentive scheme. The south-bound drag was a mixture of inefficiency and poor relations between staff and management. The production bonus scheme was pulling north but the other tug-boats were still pulling south. How foolish can you be?” “The people concerned —their attitudes and personal relationships—cannot be considered apart from incentives schemes,” said Mr Woods. “An incentive scheme is a waste of effort until the attitudes of those on the shop floor are put right. It is what it looks like from the shop floor point of view that keeps production going. “These attitudes are tremendously strong forces and it is important that they should be pulling in the right direction. Money is one of the things employees want from their work, but only one —and not even the main one. John Perry, an American authority, sums up the main factors in employee satisfaction as recognition and the means of obtaining recognition, good environment, managerial competence, job security and justice—equitable treatment.” Mr Woods said that of 52 books and reports he checked on that subject there was only one in which good money was placed at the top of the list of important factors in employee satisfaction. "Money may be a strong incentive, but it is not the strongest,” he said.

He said experiments by the r eston Electric Company in the

Fnited States had shown that ecognition of employees was a lore important factor in increasig production than improved working conditions. “The average wage-earning amily man in New Zealand has relatively restricted income

vhich does not permit the accumilation of more than small savngs. His wage is fairly fully ommitted to a pattern if expendiure which has little margin. I’hen be gets into regular over-

time or bonus the tendency always is to raise his tiire payment commitments became hia savings are insufficient to meet substantial cash purchases and still leave him that little bit of money in the savings bank to meet an emergency.

“Where is his security? It rests on the good faith and good management (and often the capricious whim) of his employer. And it rests on the protective backing of his trade union.”

Mr Woods said it was important to have the trade union’s signature to an incentive payment scheme. “You can’t get the full value out of an incentive scheme jf the trade union is pulling against it,” he said. “The trade union should be put in the picture from the beginning.” An important reason for that was the probability of a need in the future lot adjustments—"usually downward adjustments” —and in anticipation of a dispute on the terms of the adjustment the trade union should be put in the picture from the beginning, said Mr Woods.

“An incentive scheme should be introduced only when everything is right physically and mechanically- tidy and efficient layout, efficient machines, smooth work flow and so on,” said Mr Woods. “These are important aspects, but they are not as important as the human factors.”