BY RESULTS

Evening Star, Issue 22067, 28 June 1935, Page 10

BY RESULTS

SUCCESSFUL EXPERIMENT WITH EMPLOYEES 10 PER GENT. INCREASE IN WAGES A reduction of production costs by approximately 174 per cent., a 10 pei cent increase in wages, and a substantial reduction of selling prices are said to have been brought about by a system of “ payment by results ” which has been in operation for a number of years in the manufacturing department of W. A. M'Laren and Co. Ltd., Christchurch. The system was. described to a ‘ Press ’ reporter yesterday by Mr S. G. Holland, who was responsible for its introduction. Mr Holland said that the system had been designed td achieve lower costs and a larger output, with less actual working time and a proportionate bonus to the staff according to the value of the increased output. The employees were paid one-third of the savings which accrued from any reduction which they were able to make of the standard time for each piece of work, a third of the savings was taken, by the firm, and a third was passed on to the public in the form of reduced prices. A feature of the system _ was that no matter what savings of time might be achieved by the employees, whether, by better, workmanship or variation of, processes, the standard times for work were constant. In this way, Mr Holland said, it differed from some other premium bonus and profit-sharing systems by which standard times were reduced as efficiency increased. EFFECT ON WORKERS. “ Taking it all round, the employees' wages have been increased by 10 per cent.,” said Mr Holland, “and they actually work one week less in every year on full pay, as th© shop is closed for five minutes every morning and afternoon for a rest period, W© have found that there is a higher output in the 55 minutes between 10.5 a.m. and 11 a.m. than there used to b© in the hour between 10 and H.” . Demonstrating the greater efficiency of the men. Mr Holland said that under the old system the loss through faulty workmanship used to bo about 6 per cent. The last returns had shown that of 5.000 articles manufactured 12 had been unsatisfactory—six through faulty material and six through faulty workmanship. On the average the men earned a bonus in 23 out of 25 weeks. Although the system had required very careful study, it was very simple in operation. It had been of the greatest benefit to the firm under the depressed conditions of the last 10 years-