Incentive

“ The whole of this subject of incentive taken by your contemporaries seems, in fact, to have been based upon the crude and childish theory that the main factor in diligence or execution of any kind is external, whereas it is wholly internal. A person is congenitally slothful or energetic. In the one case no opportunity and no incentive can make him work beyond a certain minimum of efficiency, while in the other case he will make his opportunity and find his incentives, and nothing but superior force can prevent his doing the utmost possible. ”

“ Results of Incentives to the Work. — All incentives in every form of management, tend, from their very nature, to increase output. When Scientific Management is introduced, there is selection of such incentives as will produce greatest amount of specified output, and the results can be predicted.
Results of Incentives to the Worker. — Under Traditional Management the incentives are usually such that the worker is likely to overwork himself if he allows himself to be driven by the incentive. ”

“ Scientific Management makes the incentives stronger than they are under any other type, partly by removing sources of worry, waste and hesitation, partly by determining the ratio of incentive to output. The worker under such incentives gains in bodily and mental poise and security. ”

“ The incentive may be in the form of some definite aim or goal which is understood by the worker himself, or it may be in some natural instinct which is roused by the work, either consciously to the worker, or consciously to the man who is assigning the work, or consciously to both, or consciously to neither one. In any of these cases it is a natural instinct that is being appealed to and that induces the man to do more work, whether he sees any material reward for that work or not. ”

“ As I have said scientific management has given the subject of incentives the same careful thought that it has given to the study of lost energy. The two important incentives for inducing the response of labor to productive enterprises which scientific management has carried forward in their applications, are wages and promotion. The general assumption is that the wage as an incentive has no limitations, except the physical limitation of a human being in response to stimulus. And surely it is true that the chance to "make money" is to-day the most powerful stimulus in use. ”

“ In the second sort of competition, the worker, by matching himself against what he has done, measures his own increased efficiency. In the third sort of competition, there is the added stimulus of surprising the management by exceeding the task expected. The incentive in all three cases is not only more pay and a chance for promotion, but also the opportunity to win appreciation and publicity for successful performance. ”

“ Does the case stand otherwise with the other psychological principle appealed to, namely, the need of an incentive of personal profit to keep men engaged in useful work? We need not content ourselves with pointing [pg 118] out the elasticity of the idea of gain, and possible equivalences for pecuniary gain, and the possibility of a state of affairs in which only those things would be counted personal gains which profit a group. It will advance the discussion if we instead subject to analysis the whole conception of incentive and motive. ”

“ Before there can be any development of business there must be promise of a profit. If the business is more risky than the average there must be promise of a profit higher than the average. Take away this incentive and business stagnates. ”

“ Promotion, the incentive second in importance to the wage incentive, is of assistance in postponing the time when the dead line for the worker is reached. Nothing better illustrates the limitations of promotion in this respect than the fact that in factories where the turnover is the lowest, the opportunity to promote the workers decreases ”

“ Synonyms — "impulse, stimulus, incitement, encouragement, goad."
Importance of the Incentive. — The part that the incentive plays in the doing of all work is enormous. This is true in learning, and also in the performance of work which is the result of this learning: manual work and mental work as well. The business man finishing his work early that he may go to the baseball game; the boy at school rushing through his arithmetic that he may not be kept after school; the piece-worker, the amount of whose day's pay depends upon the quantity and quality he can produce ”

“ This teaching not only allows every worker to supplement his deficiencies of disposition or experience, but the teachers' places give opportunities for those who have a talent for imparting knowledge to utilize and develop it.
Individual Incentive and Welfare. — Finally, individual incentive and individual welfare are not only both present, but interdependent. Desire for individual success, which might lead a worker to respond to the incentive till he held back perhaps the work of others, is held in balance by interdependence of bonuses. ”

“ Towards effecting this object there are two resources available, without wrong to any one, without any of the liabilities of mischief attendant on voluntary or legal charity, and not only without weakening, but on the contrary strengthening, every incentive to industry, and every motive to forethought. ”

“ Competition is not only the basis of protection to the consumer but is the incentive to progress. ”

“ Direct incentives will be such native reaction as ambition, pride and pugnacity; will be love of racing, love of play; love of personal recognition; will be the outcome of self-confidence and interest, and so on. ”

“ The business incentive is that afforded by the prospective net pecuniary gain from the traffic, substantially an interest in profitable sales; while the community at large, or the common man that goes to make up such a community, has a material interest in this traffic only as regards the services rendered and the enduring effects that follow from it. ”

“ The poorest sort of incentive, therefore, is economic need. Our system provides all our people with the basic necessities for everyday living. Some few of us are content with these and never want anything else. But the great majority work to earn Work-Equivs, which they can spend as they please—on amusement, luxury, education or the races at the Arena. ”

“ Broadly speaking, then, the best type of management in ordinary use may be defined as management in which the workmen give their best initiative and in return receive some special incentive from their employers. This type of management will be referred to as the management of "initiative and incentive" in contradistinction to scientific management, or task management, with which it is to be compared. ”

“ The assumption that there would be no incentives to impel individuals to excel one another in industry merely because these incentives would not take a money form was absurd. Every one is as directly and far more certainly the beneficiary of his own merits as in your day, save only that the reward is not in what you called 'cash.' As you know, the whole system of social and official rank and headship, together with the special honors of the state, are determined by the relative value of the economic and other services of individuals to the community. ”

“ Incentives with Individual Records. — The greatest value of recorded outputs is in the appreciation of the work of the individual that becomes possible. First of all, appreciation by the management, which to the worker must be the most important of all, as it means to him a greater chance for promotion and for more pay. This promotion and additional pay are amply provided for by Scientific Management, as will be shown later in discussing Incentives and Welfare. ”

“ But to represent them as amenable to such incentives only is to give a quite unreal and bookish picture of the actual conditions under which the work of the world is carried on. How large a part such considerations play varies from one occupation to another, according to the character of the work which it does and the manner in which it is organized. ”

“ As fair or as superior as this bonus may be in relation to the prevailing rate in the market, managers say that the workers are apt in time to fall below the standard as their work becomes routine, unless the incentive after a time is increased or changed in character. ”

“ These are great incentives; not for any of these, but for the plain satisfaction of living, of being about their business in some sort or other, do the brave, serviceable men of every nation tread down the nettle danger, and pass flyingly over all the stumbling-blocks of prudence. ”

“ It is proper to say a word here on the subject of bonus as a means of increasing efficiency. The principal merit of this motive lies in the fact that immediate personal gain is the strongest incentive to immediate personal effort. It operates just as strongly on the employe as on the employer. Hope of promotion is too vague and the actual chances too limited to exert much pressure, but an extra sum in the pay envelope—or better still, in a separate one—for the disposal of the “old man himself,” will do wonders. ”

“ Freedom and incentives unleash the drive and entrepreneurial genius that are the core of human progress. We have begun to increase the rewards for work, savings, and investment; reduce the increase in the cost and size of government and its interference in people's lives. ”

“ But before proceeding let us remember once102 more the main premises of our contention. It may be as undesirable as it is impracticable to eliminate the undoubted incentive which the desire for more money creates. ”

“ I shall not clutter my speed with haste. "The incentive of material gain developed man from the savage to the semi-barbarian he is to-day. This incentive has been a useful device for the development of the human ”

“ It will seek to liberate new motives and to enlist them in its service. It will endeavor to find an alternative to incentives which were always degrading, to those who used them as much as to those upon whom they were used, and which now are adequate incentives no longer. ”

“ Whether the end and outcome is an invidious gain for the individual (in contrast with or at the cost of his neighbors) , or an enhancement of the facility of human life on the whole, is altogether a by-question in [Pg 139] any discussion of the range of incentives by which men are prompted to their work or the direction which their efforts take. ”

“ I don't think there has been any change in human nature in that respect since your day. It is still so constituted that special incentives in the form of prizes, and advantages to be gained, are requisite to call out the best endeavors of the average man in any direction. ”

“ The problem of increasing their reward
There is a vaguely recognized and growing conviction that these hewers of wood and drawers of water should enjoy a larger income. But how are they to get it? How is society to grant it to them? They get what they can under the competitive conditions, they get what their service is worth in the market. Are the conditions of the competition fair? If not, what will be the effect of a change? If they get more, others will get less ”

“ Under this universal relation of contract when equitably administered, there arises that adjustment of benefit to effort which the arrangements of the industrial society have to achieve. If each as producer, distributor, manager, adviser, teacher, or aider of other kind, obtains from his fellows such payment for his service as its value, determined by the demand, warrants, then there results that correct apportioning of reward to merit which insures the prosperity of the superior. ”

“ For example, — the immediacy of the temporarily increased reward caused by restricting output has often led the combinations of working men to such restriction, with an ultimate loss of reward to worker, to employer, and to the consumer.
Rewards Possible of Attainment by All. — Every man working under Scientific Management has a chance to win a reward. This means not only that the man has a "square deal," for the man may have a square deal under Traditional Management in that he may have a fair chance to try for all existing rewards. ”

“ First, the article or service must have utility—that is, it must be useful in satisfying somebody's wants, either present or future. Second, those wants must be of such a nature that effort on the part of some human being will be necessary to gratify them. Nothing which can be had at all [pg 066] times by mere desire of it can have value. Third, the object must be of such a nature as to command other services or exchange of other wealth. ”

“ It is sufficient here to remark, that the efficiency of industry may be expected to be great, in proportion as the fruits of industry are insured to the person exerting it: and that all social arrangements are conducive to useful exertion, according as they provide that the reward of every one for his labour shall be proportioned as much as possible to the benefit which it produces. ”

“ In several departments of industry there are already cases in which every one who contributes to the work, either by labour or by pecuniary resources, has a partner's interest in it, proportional to the value of his contribution. It is already a common practice to remunerate those in whom peculiar trust is reposed, by means of a percentage on the profits: and cases exist in which the principle is, with excellent success, carried down to the class of mere manual labourers. ”

“ Our time, our labour, our ingenuity, is so much ready money which we are to lay out to the best advantage. Examine, compare, choose, reject; but stand to your own judgment; and do not, like children, when you have purchased one thing, repine that you do not possess another which you did not purchase. Such is the force of well-regulated industry, that a steady and vigorous exertion of our faculties, directed to one end, will generally insure success. ”