We have noticed in recent months that the stock comment in most business publications is that the labor situation is still the cause of some apprehension. The lack of constructive suggestions was noticeable until we read some comments by Phil S. Hanna, the very able Editor of the Chicago Journal of Commerce.
In a recent issue, Mr. Hanna described two outstanding examples of firms who are handling the employee situation quite intelligently. The managements of these companies are keeping their workmen informed about what goes on in the front office by taking the men into their confidence and giving them so-called “low-down” on the financial situation of the company. Periodic reports are distributed to the employees in such a form that almost anyone can understand them. The employee is informed of his profit sharing benefits, extra compensations, vacation allowances and other advantages.
One of these firm furnishes a report containing a tabulation of sales, wages paid and dividends and through a long series of talks these reports have been thoroughly explained to the employee. The firm gives its men a report from Certified Public Accountants and employees’ confidence in these C.P.A. reports is enhanced by his knowledge that this report is again checked by federal and state income tax auditors.
Their profit-sharing plan, in which every employee participates on an equal basis with stockholders after the latter have received a fair return, is as follows: The 6% of earnings goes to the stockholders, and as earnings exceed 6% the excess is shared 50-50 with the employees. The employees’ attention is also called to the manner in which wage cuts were handled during the depression and the method of wage increases which have taken place in recent years. The average hourly rate is now 30% above the average rate paid when the business was started in 1931, and it is pointed out that the average rate of pay is now 79% above the paid at the bottom of depression.
The other manufacturer has an equally interesting plan of profit sharing through employee stock ownership, bonuses, extra compensations, etc.
In our own field of rebuilding industrial equipment, an outstanding example of intelligent handling of employees was related to us by the head of firm employing some 75 or 80 men in their shop. This firm has been paying about the highest hourly rate in their perspective field. The employees receive a vacation with pay and other benefits.
The management is constantly improving the working conditions in the shop. The personal welfare of every employee is given consideration. The workman does not have to go through his foreman or superintendent to get an interview with the boss. The results of this situation are minimum of labor turn-over and cooperation throughout the entire organization.
Well, if you knew this boss like we know him you wouldn’t be surprised that such a harmonious situation is existing.
It appears to us that the main fly in the ointment can be eliminated through the factor of confidence and understanding between employer and employee. If every employer were to give a little more personal attention to this question there would be less cause for apprehension in the labor situation and the “ballyhoo boys” with the soap boxes would find few listeners.