EMPLOYEE REPRESENTATION MOVEMENT IS DISCUSSED

Mr. Stoddard is secretary of the Industrial Information Service and has been in close touch for several years with the labor situation in this country. During the war he was a member of the War Labor Board. Mr. Stoddard has also had wide experience in journalistic work and was for a time an assistant in the University English Department.

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One of the outstanding facts in the industrial world today is the rapid development of what is commonly called the "employee representation" movement. This movement is not so peculiar to the United States; British, French, Italian and German industrial managers and workers have gone further in it than we have. It is known by various names, such as "shop committees," "workers' control," "industrial democracy," and the like.

What is employee representation? The President's Industrial Conference of a year of so ago defined it as the organization of the relationship between employer, and employee. It is precisely that. It is government in the factory, mine or mill. It is a structure of conference committees which, in the best prevailing practice, are composed in equal numbers of elected representatives of the management. It is an organization, local to the particular concern in which it is set up, whose function and purpose is to so correlate the mutual interests of employee and manager as to produce the most harmonious working relationships, the most effective production methods, and the best teamwork between the two often hostile factors in industry, labor and capital.

The development of employee representation received its great impetus in this country between 1917 and 1920. The erroneous impression has gone forth that the principle is new and the practice novel and without precedent. Such, however, is not the fact. The essence of employee representation is the recognized and organized participation of workmen, in greater or less degree, in the determination of questions affecting their wages, hours, and conditions of labor. Wherever union agreements have existed as for example, on the railroads, in the mines, in sections of the printing trade and in the boot and shoe industry, employee representation has, to a certain extent, also existed. It is to be noted in passing that in those few large industrial groups where collective agreements are of long standing, more ambitious joint councils are now forming as the natural and logical development of closer relations between employer and employee.

"Shop Committee" System

An early "shop committee" system was installed in one of the Westinghouse plants in the 90's. The Colorado Fuel and Iron Company's plan of representation dates from before the World War. The History of Labour in the United States cites instances of collective dealings in this country in the 18th century. Even in Europe, where the tendency has developed more fully than in the United States the recognition by law of "joint control" goes back several years. In England, for example, the Miners' Minimum Wage Act of 1921 gave statutory powers in the matter of fixing wages to joint boards of miners and mine owners. In Germany the first step toward the legal recognition of the workers' right to participate in management dates from 1891 when an act was passed amending the Industrial Code.

Three weeks ago the Associated Industries of Massachusetts, cooperating with employers' association of all New England States held in Boston a conference on employee representation. It was a most interesting meeting. Representatives of the General Electric Company, the International Harvester Company, the Thomas Plant shoe manufacturing company, the MacCallum Hoslery Company, the Walworth Manufacturing Company and the W. F. Whitney Company described their plans and reported in no uncertain terms on the success of employee representation. In brief, the testimony there presented was to the effect that better relations with the employees had been established, sharp labor controversy reduced or eliminated altogether and, in some instances better production methods installed. It is significant that, although adverse opinions were invited none raised objection to the principle of employee representation. If this conference represents accurately the opinions of New England manufacturers, it would seem that employee representation has gained a permanent place in industry hereabouts.

New Plan is Natural

Employee representation is the natural and normal development of large scale industry. When industrial units were of relatively much smaller size, contact between man and master was direct, friendly and close. The employer-employee relationship was simple. As industry expanded with thousands of factories employing from half a thousand to ten or twenty thousand men and women, this contact was destroyed. The distance between employer and manager increased. Employer and manager became separated. They could not do business together efficiently because they had no adequate machinery to express the real relationship which necessarily underlies industrial work.

Short sighted but entirely honest trade union opinion opposes employee representation on the ground that it is an attempt to destroy or discriminate against the unions. In some cases such a motive is a compelling one with employers. But in general employee representation is "open shop"--like American industry in general that is, it does not discriminate between unionists and non-unionists. It does not recognize the col- lective body of the union, but recognizes and deals with the collective body of its own employees, through their duly and honestly elected representatives. Employee representation tends to solidify the interests of all the workers in a plant with the interests of the management.

Unionists of broader vision see that there is a place for the trade union and a place for employee representation. It is a curious fact and one well worthy of reflection that in this country the impetus to employee representation comes from employers, while in England the impetus comes from trade union workers who have felt that the trade union form of organization is not adequate to meet the needs of collective dealing within the individual plant, and that the more intensive form of local, shop representation is a requisite to industrial goodwill and efficiency.

Statement Made on Scheme

The Industrial Information Service has on file a remarkable statement on employee representation in a large New England factory where, within the space of about two years, the entire atmosphere has been cleared as a direct result of "taking the employees into the game." I cannot illustrate better the possible effect of employee representation than to quote the following paragraphs from this statement:

"What is a fair wage, and what the content of a fair day's work, were, perhaps, the most vital subjects for dispute. These are many times left to some crude method of bargaining, where the solution is more a matter of erratic opinion than fact, or merely the result of blustering intimidation. Therefore, immediately our plan of representation was adopted, we set out, through the General Committee, to determine a sound and fair basis of wage. This committee drew up a scale of rates for hourly workers, and a list of basic rates for piece-workers, consistent with the relative amount of skill and intelligence for the average man involved for the work in each group. The resulting arrangement was acceptable to all because, through the representation of both company and employees, light was thrown into the remotest corners of the plant and the facts brought out.

"The rates once established, disputes soon arose over the individual piece prices, employees contending that it was impossible to earn the basic rate agreed upon with the prices set on certain operations and foremen contending that certain other prices allowed the basic rate to be earned too easily, which tended to laying down on the job and consequent loss of production. Here again, the application of the plan was brought out and continues to the present to be a very satisfactory medium for obtaining justice for both sides.

"Under the plan of representation the detailed time study has been formally recognized by the representatives and other employees as the only fair and just basis for the final settlement of differences of opinion in regard to piece work prices.

Piece Rate vs. Time Scale

"We already had a piece rate department and had practised a system of price setting through time study. Nevertheless, the force was small and the field large. Many of the prices, therefore, were the result of comparison with prices obtained from more or less unreliable sources. Many times the biased information of the foreman was accepted and lacked a consideration of all the conditions. Moreover, the time study man was looked upon by the shop as an undesirable citizen. His position was very hard to fill and very little thought of by those who might be competent. He was the object of much abuse and there were few workmen who would concede that he possessed the least spark of justice or honesty. Consequently, the tendency was to try to fool him as often as possible by 'stalling.' At times even the foreman, ignoring the fact that much of the spoiled work could be accounted for by lack of proper supervision on his own part, was more inclined to blame the prices and give the man his support in such an attitude. Furthermore, many employees believed it to be the general policy to compute the price at the rate which, in the opinion of the individual setting the price, was proper for the particular workman it involved. In this way, the prices were subject to all the vagaries and prejudices of human nature. Owing, also, to the uncertain status of the price setters, the final price was often but a poor compromise and the resulting inconsistency of the piece prices is apparent.

"Our plan provides also for the participation of representatives in the adjustment of individual piece prices. Here again, it proves to be the only successful medium for showing the facts to both sides. Now, whenever a price is questioned and a time study is to be made of the operation, the operative has the privilege of requesting the presence of his representative to see that he gets a square deal. In this way the tendency to deceive by stalling time was overcome, for, when shown up to his own representative, the operative has no comeback. All suspicion that a biased judgment of the foreman was accepted, or that affecting conditions were overlooked was allayed. The question, also, whether spoiled work was accountable to the price being low or lack of proper supervision on the part of the foreman, was easily settled, for, the representative being himself a workman in the department, was more inclined to defend both himself and the price when poor supervision existed, the final result often proving to be a decided improvement all around.

Cooperation Developed

"There has now developed a cooperation between the representative, the foreman and time study department, the representative acting as a sort of buffer, showing a desire to have the work done in the quickest method and on machines that were suitable for it. We've always made them that way,' is now seldom offered as an alibi, under the close analysis given the job by the combined efforts of this cooperation.

"Another time-worn argument of the foreman used to be when a man protested a price that 'it covered the man who did the job previously for that price and who made good money on it,' which was true. But we found at the time the representative entered on the scene, that there was another factor which had often been overlooked, namely, the type of machine that the price had been set on. It might have been a lathe job and timed on a certain lathe and the operator who was protesting against the price was doing the job on a different type of lathe than the one the price was originally set on. This led the way to a new field and later on we find that, by this checking up, the type of machine best suited for the particular operation is given proper consideration.

Records Show Good Results

"This has been done, and our records show that the result was a new reduction of piece prices and consequent increase in production with continued high earnings which established a sound confidence and produced harmony and greater diligence.

"It will be seen that it is but a short step from this interest by the employee and his representatives to a popular demand for what may be termed scientific methods.

"By the participation of the employees' representative under the plan of representation in these matters, we do not want to be understood as saying that the result is one in which all are a happy family, for there will always be kicking and controversy, but we believe by allowing the representative to partake of and play a part in the questions of waste, production, improved conditions and the many details that enter into the performing of a day's work, that it has the same effect as the Volstead Act had on beer. We still have beer, but the kick is removed and the same applies to labor troubles. We still have our labor troubles, but the kick is not in it.