establishment because of absences or other reasons. In the Clothcrait Shops all those willing to learn other work are given opportunity to do so and are paid a retainer while learning. All employees who are capable of helping out on an operation are carefully listed, and a definite hourly retainer is paid them whenever they do work on which they are not able to earn as much as on their regular operation. At all times the normal working force should be maintained, except only under such conditions as are forced upon the industry and beyond its control. Where there is a temporary lack of orders, due to industrial depression, seasonal fluctuations, and the like, the number of employees should not be cut down, but the number of hours of employment should be reduced equally throughout the whole organization. At the Clothcraft Shops this policy was strictly adhered to during the recent industrial depression, which reduced its normal working hours by approximately 15 per cent for a period of six months. While the percentage of quitters for this period was noticeably increased, nevertheless this increase was diminutive as compared to the number it would have been necessary to lay off had another policy been followed. We believe, moreover, the duty of providing steady employment under all possible conditions is a moral responsibility to the community at large.

The seasonal character of some industries is a well-recognized part of this problem. There is no doubt that in order to overcome this obstacle a great deal of public education is necessary. The fact remains, however, that the problem can for the greater part be solved by the industry itself. For this purpose purchases must be standardized and the purchasing policy itself so developed that a good proportion of orders can be anticipated.

In this connection one of the most important things is the sales policy. Many businesses, even though having a highly developed manufacturing organization, have not a sales policy or sales organization worthy of the name. It is only in exceptional instances that the sales policy and the manufacturing policy are properly correlated. Ordinarily the sales department is administered with entire disregard of its most important function, viz., to market a product that will permanently be of most profit to the entire organization. The Joseph and Feiss Company, in order to meet the problem of furnishing steady employment, have for some time past conducted an advertising

campaign concentrating on certain staple numbers. The volume of sales that has resulted has been sufficient under normal conditions to provide steady employment when other establishments in the same industry have been shut down. As to this phase of the problem, however, the surface has, as yet, only been scratched. The men who hold the purse strings must sooner or later learn that the correct point of view, both morally and for the purpose of permanent return not only to themselves but to all the organization, involves the realization that the factory does not exist for the purpose of turning out for a temporary profit whatever it is easiest to sell, but that the sales force is part of the manufacturing organization to market whatever it can most steadily and, therefore, most profitably produce. . . .

From the record of absentees and tardies it is shown that during the first six months of 1915 the average number of tardies was only two and one-half persons per day. This is equal to one third of 1 per cent of the working force. For purposes of accurate follow-up, absences are classified as excusable and inexcusable. The excusable absences averaged a little over seven persons per day, or nine tenths of 1 per cent of the working force. The inexcusable absences averaged only a little less than four per day, or five tenths of I per cent. The total absentees per day averaged eleven, or only 1.4 per cent.

In regard to quitters a little more explanation is necessary. Very few people realize the tremendous cost to industry from this cause. Various estimates of this cost have been made. These estimates vary from $50 to $200 per person, depending on the nature of the work and character of employee obtainable and the percentage of old employees who are rehired. Taking even the lowest possible estimate, it would seem that any reasonable outlay of both money and effort for the purpose of reducing this industrial and social waste would be justifiable. At the Clothcraft Shops, in recognition of the tremendous loss from this source and the consequent value of notice in case of a contemplated severance from the organization, such notice is paid for at the rate of an amount equal to a day's pay for every week's notice, but not in any case to exceed an amount greater than four days' pay. . . .

Nothing shows more clearly the progress which has been made in this respect at the Clothcraft Shops than the record of "labor

turnover" for the five years from 1910 to 1914 inclusive, as shown

These records tell their own story. It may be also worthy of note that over one third of the members of the Clothcraft organization have been in the continuous employ of the company for a period of five years or more. It is practically impossible to obtain accurate figures as to normal labor turnover. In the few instances where figures are available, progress has already been made. In the case of one large concern, in the men's clothing industry, the number of people employed for 1914 amounted to 115 per cent of the pay roll, which is undoubtedly better than the average in the industry. The following relating to a somewhat similar industry is from the report of the Federal Industrial Relations Commission (page 166):

An investigation of the cloak and suit industry in New York showed the maximum number of employees in sixteen occupations during any week of the year to be 1952. Actually, however, the pay rolls showed that 4000 people were employed in these occupations. . . .

The open road to talent is an essential to every successful organization. At the Clothcraft Shops the road is not only open but every possible aid is given for advancement. Practically all positions in the organization, including clerical and executive positions, are filled by those who by reason of sheer personal merit have come up from the ranks.

One of the most important functions of the Employment and Service Department is to develop organization spirit and free expression of personal and public opinion. It forms a direct channel of expression from its source to the ear of the management. In fact the chief purpose of a scientifically organized department is nothing

more than the development of that intimate personal contact so necessary to management. At the Clothcraft Shops about one fifth of the total number of employees come daily in contact with the Employment and Service Department. All cases where direct contact with the management would be beneficial are immediately referred to it. This requires constant daily contact of the management with the department, and brings it into intimate relationship with a great many more cases than would be possible in the average organization of much smaller size. Wherever the management assumes the policy of the closed door, this department may well be shut down.

Results cannot be accomplished in the spirit of charity, but must emanate entirely from a sense of justice. It must be understood that work along the lines described above can never take the place of wages. Such work must have as a reason for its existence not only increased efficiency but the increased reward to which increased efficiency is entitled. The progress of the Clothcraft Shops in respect to wages and efficiency from June, 1910, to January, 1915, is shown by an increase in production of 42 per cent; an increase in the average individual hourly wages of 45 per cent, weekly wages 37 per cent; and a decrease in total manufacturing cost of about 10 per cent. During this period the weekly working schedule was reduced from fifty-four to forty-eight hours.

It is our belief that results, such as these, are obtainable only when scientific management is scientifically applied. Scientific management will live if for no other reason than that it has faced the problem squarely and recognizes that the science of management is the science of handling men.

RICHARD A. FEISS

XIV

SCIENTIFIC MANAGEMENT AND DICTATORSHIP OF THE PROLETARIAT 1

THA

HANKS to the peace obtained,-in spite of its oppressiveness and all its insecurity, the Russian Soviet Republic is enabled for a certain time to concentrate its efforts on the most important and most difficult side of the socialist revolution, the problem of organization.

This problem is presented clearly and precisely to the masses in the fourth section of the resolution adopted at the extraordinary congress of the Soviets held at Moscow on March 16, 1916, the section which urges self-discipline of the workers and a merciless struggle against chaos and disorganization. . . .

In every socialist revolution-and hence also in the socialist revolution in Russia inaugurated by us on November 7, 1917,2-the main task of the proletariat and of the poorest peasantry led by it consists in the positive and constructive work of establishing an extremely complex and delicate net of newly organized relationships covering the systematic production and distribution of products which are necessary for the existence of tens of millions of people. The successful realization of such a revolution depends on

1 Extracts from address by Nikolai Lenin, Russian Communist Premier, in June, 1919, forecasting the decrees of the Bolshevik government issued the following February. As a result of the confiscation of factories without compensation to the owners, resulting in destruction of credit and the breakdown of discipline, Lenin announced in this speech the resort to compulsory labor in factories, the dictatorship of industry by the leaders of the communist army, a proposed introduction of scientific management, and the desperate predicament that followed the expulsion of business management and the attempt of the Soviets to operate the factories. (See Introduction, p. x.) Translated for the Rand School of Social Science.

2 November 7, 1917, is the date of the successful Bolshevik coup d'état. The Kerensky coalition government was forced to abdicate on that day, and the Soviet government, with the Bolshevik leaders, Nikolai Lenin and Leon Trotsky, at the helm, was instituted in its place.