Transcript of Supplement to Episode 1

As for the first episode we will be discussing a text that is over 100 years old, I thought it fitting to use this supplement to tell you a little bit about what it was like to live and work at the time Taylor was developing his principles of scientific management in the late 19th century.

Life was considerably different back then. Average household had no internal plumbing, no phones and no cars. Telegraph was used for long-range communications and traffic congestion was a thing of science fiction with only 8000 cars in the entire country and none west of the Mississippi. Also, as we know from photographic records, people had to go about their daily lives in black and white only.

United States was probably best known for the vast expansion of its industrial plant and output. At the heart of these huge increases was the mass production of goods by machines. In the century since such mechanization had begun, machines had replaced highly skilled craftspeople in one industry after another. By the 1870s, around the time when Taylor arrived to the workplace, machines were knitting stockings and stitching shirts and dresses, cutting and stitching leather for shoes, and producing nails by the millions. Mechanization not only reduced manufacturing costs but lowered consumer costs. In many ways machine production in factories created a growing abundance of products at cheaper prices.

Working on a machine in a factory means subdivide production down into many small repetitive tasks with workers often doing only a single task. While a great amount of unskilled labour was sufficient to operate vast majority of equipment, this is not to say that all the employees were completely interchangeable, as the cogs in the proverbial machine - there were a few highly skilled engineers roaming the floors of these industrial beasts. And beasts they were! On the outside, hundreds of industrial chimneys would exhume thick unfiltered smoke and on the inside factory equipment would make the workspace crowded, hot, and very smelly. The pace of work usually became increasingly faster and purpose-built factories designed to house manufacturing equipment were being erected in bulk. Charlie Chaplin’s Modern Times is an excellent satire of these precise conditions – check it out if you haven’t seen it yet!

As factories grew the demand for cheap labour grew with them! Though pay varied by gender and age, typical employees made about $6 a week. This is comparable to about $150 a week today. In order to save money further, many factory owners hired women and children because they would work for less.  Most female workers performed unskilled or semi-skilled machine work but some worked in industries that demanded heavy labour. Some women, for instance, worked on railroads. Finally, factory managers began to enforce an industrial discipline, imposing set, and often very long, hours in less than adequate conditions. As a result, in the late nineteenth century more industrial accidents occurred in the United States than in any other industrial country in the world. But conditions did begin to improve somewhat in the run up to the 1920s.

One result of mechanization and factory production was the growing attractiveness of labour organization. To be sure, craft guilds had been around for quite a while. But now there were increasing reasons for workers to join labour unions. While such labour unions were not notably successful in terms of membership numbers they were still able to organize a variety of strikes and other work stoppages. You will note that this was a live issue for Taylor as he repeatedly mentions that scientific management is really good at making unions and workplace violence obsolete.  

In these early days of industrialization there was little in the way of keeping business owners in check by means of centralized legislation and regulation. Large factory owners who employed tens of thousands of people were de facto rulers over entire communities. To many of their employees, especially those who were immigrants with very limited knowledge of American culture and English language, they were the only rulers that mattered.

Factory work was organized along the craft system, where the knowledge and ability to perform a trade was acquired through direct apprenticeship. As such, there was little in the way of continued professional development we are so used to today. In fact, there was not much in way of professions altogether. Yes, there were specialists here and there but by and large the organizational structure was really flat with a huge mass of labour who did the labour, a number of foremen who managed production and a handful of engineers who fiddled with equipment on the side. In terms of management, all work was organized by the foreman on behalf of the factory owner. Foremen were responsible for hiring and firing, training, career advancement, and the enforcement of discipline.

Foremen would also set wages. At the time when Taylor was developing his scientific approach to management, the wage each individual employee would be offered was basically as little as the foreman thought they would do the job for.

Amongst all this there was growing recognition that production work could be done fairer, safer and more efficiently. And mechanical engineers were the ones to lead the way! A person by the name of Henry Towne was one of the first engineers to recognize this. The thought that because factory owners relied on engineers to grow their production, the development of management techniques in particular was key to the development of the engineering profession as a whole. In the 1870s, he began applying systematic management at his firm, the Yale Lock Manufacturing Company, in the form of what he referred to as ‘gain sharing’.

The ‘gain sharing’ initiative was really simple. After subtracting some amount of interest from the profit, the remaining money would be divided amongst the employees more or less equally. You will find that some businesses still follow this model today. But much like today, gain sharing was not uniformly accepted by pioneers of management back then either. In 1891, Frederick Halsey dismissed gain sharing and proposed a minimum wage coupled with incentive pay based on recorder production outputs. Halsey based the minimum wage on the amount of time it took employees to do what they did before and supplemented that with a 1/3 share for any increases in production. While similar to gain sharing, this way employees could be sure of getting paid at least something regardless of how well they, as a collective, performed that week.

Both systems were applied and both resulted in increases in employee remuneration and production volumes. However, because of lack of transparency, understanding of why some are better than others at working the same machines and loosely defined role of management beyond payroll responsibilities, tensions began to grow on both sides in respect to who gets paid for what and how much.

It is at this point that the subject of our first episode, Frederik Winslow Taylor arrives with a detailed and clear study of how work is to be measured and paid for, what is it that managers ought to be doing, and why everyone can be better off at no expense to anyone else. In the Principles of Scientific Management Taylor picks up on many of the themes I have mentioned, including the extreme power asymmetry of the foreman, skilled and unskilled labour and motivation and pay.