THE COST OF UNSCIENTIFIC SELECTION

People used to thank God for their sickness and pain at the same time naively praying Him to take back His gift. This inconsistency was due to a combination of ignorance and the good old human foible of blaming some one else. Folks did not know then, as well as they do now, that they had the stomachache because they were too fond of rich dainties. The cause of the pain being mysterious, they went back to first principles and blamed (or thanked) God for it. They believed that God afflicted them for their good and His glory, but their belief was hardly practical enough to keep them from praying Him not to do them too much good or Himself too much glory.

Bodily ills are no different from our other troubles. In case of doubt as to their origin, it is far more convenient to blame some supernatural source for them than to take the blame upon ourselves. In support of this, take the attitude of employers toward strikes and lockouts, their most outbreaking and violent troubles. These are named in all of our contracts along with lightning, tornadoes, floods, and other “acts of God,” if not directly, at least by inference It is plain enough, at any rate, that those who draw up the contract consider strikes and lockouts as wholly outside of their control, as they do the elements. It is the same old ignorance, the same desire to shift the blame.

WHO IS TO BLAME?

Modern business common sense counts strikes and lockouts among preventable industrial diseases, just as the modern science of medicine classes smallpox, diphtheria, typhoid fever, the plague, tuberculosis, and the hookworm amongst preventable bodily diseases. The strike is a violent eruption, according to those who have made the closest study of the situation, resulting from long-continued abuses of bad management, bad selection, bad assignment of duties, and other vicious or ignorant practices. So a fever is a kind of physical house cleaning for the removal of debris of months or even years of foolish living.

But persistent violation of the laws of health does not always lead to acute disease. Seated in the office of a prominent and successful physician in a Western city one day, we were discussing with him the true nature of disease. “My patients,” said he, “many of them are now lying on beds of pain, burning with fever. They are called sick people. The folks walking along the street out there are called well people. The terms are inaccurate. Fever is the effort of nature to throw off poisons, poisons which have been accumulating in the system for years as the result of wrong ways of living. Many people suppose that fevers are caused by germs. This is not true. No germ can harm or disturb a healthy body. It is only when the body is depleted in vitality that its defenses come down and germs find a ready soil in which to propagate. People who have fevers, therefore, are only taking a violent manner of getting well, and, if wisely treated and intelligently nursed, they do get well. As you know, it is a very common experience for a person to feel far better after recovery from a spell of sickness than he has for years previously. Now, nine out of ten of the people going along the street who call themselves well are not well. The majority of them are probably only 25 per cent, efficient physically. They are loaded up with the debilitating consequences of their own recklessness or ignorant manner of living.”

A PROLIFIC CAUSE OF INEFFICIENCY

In the same way, there are latent illnesses and inefficiencies in many commercial organizations which never reach the point of strikes and lockouts. For some reason or other that lively germ, the walking delegate, fails to get a foothold. Perhaps there would be a beneficial house cleaning if he did. Discontent, dissatisfaction, unrest, and constant changes in personnel load the body up with wastes, inefficiencies and unnecessary expenses. Any employer who thinks at all, and who has any basis for judgment as a result of observation, knows that what he desires to purchase, when he pays wages, is not a prescribed number of days and hours, is not a standard number of foot pounds of physical energy, but rather human intelligence and human willingness and enthusiasm in the use of that intelligence in his service. It is true that most employees do a certain amount of physical work, but it is also true that the value of that work depends entirely upon the amount of intelligence and good will the employee puts into it. The employee who is doing work for which he is not fitted and is unhappy and discontented is doubly inefficient. He is inefficient because he is not well fitted for the work and could not do his best even if he were perfectly satisfied and happy. And he is inefficient because he is in a bad psychical state. With his mental attitude, he could not do good work even if he were in the place for which he was best fitted.

Efficiency experts maintain that the average employee in our industrial and commercial institutions is only from twenty-five to thirty-five per cent, efficient. Sixty-five to seventy-five per cent, loss in productive power on the part of the forty million workers in this country constitutes an almost incalculable sum.

Who is to blame for this loss? Are we not too intelligent, too well versed in the laws of cause and effect and too courageous to try to blame the Almighty for it or to lay it to the public schools or to hold the employee accountable? As a matter of fact, no matter how we may try to shift the blame, those of us who are executives know only too well that our board of directors and stockholders hold us strictly responsible for results. What they want is dividends, not excuses. They do not care to hear how hard it is to find good men. They are not interested in the stories of employees who are so ungrateful as to leave just when they have become most useful. They will not permit you to shift any of the blame upon the shoulders of the employee. They expect you to use methods in selecting and assigning employees and handling them after they are selected that will yield the largest possible permanent results.

HIGH COST OF HIRING AND FIRING

Employers who will take the trouble to study their records for some years past, will, unless they are very exceptional, find that the average length of service in their organization is much shorter than they would be prepared to believe unless the actual figures were before them. We have the word of its manager in regard to a certain foundry in the Middle West that the average period of employment for any one man in that foundry is only 30 days. We know a large steel mill employing 8,000 where the average length of service per employee is a few days more than four months. These figures were given to us by the employment manager of the mill. The head of the employment department of a large electrical manufacturing company stated to us that the average length of service per employee for his organization was one year or a little less.

From “Current Affairs,” Boston, we quote the following significant editorial:

“Do employers realize the waste and extravagance and actual money loss due to haphazard hiring and firing?

“Twelve typical factories were recently investigated as to their employment records by Mr. M.W. Alexander. He chose the normal industrial year of 1912. He chose representative factories, big and little, in several States. The results of this inquiry were reported in an address before the National Association of Manufacturers.

“Mr. Alexander found that this group of factories had 37,274 employees at the beginning of 1912, and 43,971 at the end of the year a net increase of 6,697 workers. But the books showed that the factories had actually hired 43,571 new hands, 35,874 having been dropped during the year Of course, not all were fired. Some were absent because of sickness, some died, some left voluntarily; but these were only a small proportion. And the fact remains that in order to increase their working force by 6,697 these twelve industries had to break in 42,571 new employees and suffer the consequent extra expense of instruction cost, reduced production, and beginners’ spoiled work. Making liberal discounts for the workers unavoidably withdrawn, it is estimated that these twelve factories suffered a definite money loss of more than $831,000 during the year on account of reckless hiring and firing.

“The conclusion seems justified: ’The highest grade of judgment in the hiring and discharging of employees is needed. The employment “clerk” of to-day will have to be replaced by the employment “superintendent” of to-morrow, not merely by changing the title and salary of the incumbent of the office, but by placing in charge of this important branch of management a man whose character, breadth of view, and capacity eminently qualify him for the discharge of these duties.’”

It is probable that most executives and employers do not know because they have not fully considered what this rapid ratio of change costs. This cost, of course, varies over a very wide range, according to the kind of work to be done and the class of employees. The sales manager of one organization told us that it cost his concern $3,000 to find, employ, train, and break-in to his work a new salesman. The employment manager of one of the largest corporations in the world in-forms us that it costs him $10,000 in actual money to replace the head of a department. The employment manager of a large factory employing people whose wages ran from $5 a week up, told us that the records of his department showed that it cost $70 to get the name of a departing employee off the payroll and to substitute thereon the name of a new permanent employee to take his place. But these are only costs that can be computed. There are other costs perhaps even greater, records of which never reach the accounting department or the employment department. Let us tell you a story:

A COMMONPLACE STORY

Joe Lathrop, foreman of the finishing room, had a bad headache. It had been along toward the cool, clear dawn of that very morning when, having tearfully assured Mrs. Lathrop for the twentieth time that he had taken but “one li’l’ drink,” he sobbed himself to sleep. His ears still range disconcertingly with the stinging echoes of his wife’s all-too-frank and truthful portrayal of his character, disposition, parentage, and future prospects. His heart was still swollen and painful with the many things he would like to have said in reply had he not been deterred by valor’s better part. It was a relief to him, therefore, to take advantage of his monarchical prerogatives in the finishing department and give vent to his hot and acrid feelings.

With all his flaying irony and blundering invective, however, Joe Lathrop never for a moment lost sight of the fact that there were some men upon the finishing floor whom it was far better for him to let alone. With all his truculence, he was too good a politician to lay his tongue to the man tagged with an invisible, but none the less protective, tag of a man higher up. And so Joe Lathrop let loose his vials of wrath upon those whose continuance upon the payroll depended upon merit alone. One of these was Robinson.

HATED FOR HIS EFFICIENCY

Robinson had been finishing piano frames upon this floor for twenty months. He was a young married man, in good health, ambitious, faithful, loyal, skilful, and efficient. He was a man who worked far more with his brains than with his hands. He understood the principles of piano construction, and was, therefore, no rule-of-thumb man. He had studied his work and, as a result, had continually increased both its quantity and quality Robinson was not self-assertive, perhaps a little taciturn, but there was something about him which made people respect him. Over the dinner pails at noon there had been many a conjecture on the part of Robinson’s fellow-workers that he was in line for promotion and that he might be made assistant foreman at any time.

Joe Lathrop knew that Robinson’s quiet efficiency and attention to business had not escaped the superintendent’s eye. He felt that the day might come almost any time when, on account of his “just one li’l’ drink,” or its consequences, he might have to yield his scepter to the younger man.

DISCHARGED WITHOUT CAUSE

Along about nine o’clock of this particular morning, Lathrop was brow-beating one of the men for some fancied fault near the place where Robinson was working. Seeing Robinson quietly doing his work, paying no attention to the wrangle so near him, only further irritated the suffering foreman.

“Robinson,” he yelled. “You have been here long enough to know better than this. What do you mean by standing there like a wooden post right beside this man and letting him make such a botch of these frames?”

Robinson, of course, being a wise man, kept his own counsel, and went on with his work. He could not acknowledge himself at fault when he was not at fault. His manhood revolted. His business was to concentrate upon his own work. Since he could not acknowledge the fault, he therefore said nothing. This, of course, was just what Lathrop did not want.

“Speak up,” he bawled, “explain yourself.”

“I have my own work to attend to, Mr. Lathrop, as you know,” he said quietly.

“I’ll have no back talk from you, you sulky dough-face,” roared Lathrop. “Get to hell out of here. Go to the office and get your time.”

Robinson knew better than to protest. He even hesitated to go to the superintendent, but finally decided to do so.

“It’s a shame, Robinson,” admitted the superintendent, “but Joe is an awfully good man when he is right, as you know, and as long as we keep him in our service we have to stand behind him in order to maintain discipline.” And so Robinson walked out with half a week’s pay in his pocket.

THE BEGINNING OF LOSSES

Let us estimate roughly what Joe Lathrop’s “one li’l’ drink” and his suspicious jealousy cost the piano company.

Of course, his first cost was the loss of time in the finishing room while Robinson’s place stood empty. It is fair to suppose that the company was making some profit on Robinson. It, therefore, lost the profit of those two days. Besides this, the machinery and the equipment Robinson operated stood still for two days eating up, in the meantime, interest on investment, rental of floor space, depreciation, light, heat, and all other overhead charges that it ought to have been making products to pay. In addition to all the overhead charges, the machinery ought also to have been making a profit for the piano company.

But there were other losses. Robinson’s absence disorganized the shop routine. There were delays, conflicts, piano parts piled up in one end of the room while other departments clamored for finished frames at the other end of the room. Then, at least one-half a day of Joe Lathrop’s valuable time went to waste while he was out trying to find some one to fill Robinson’s place. His first attempt was made at the gate of the factory, where the sea of the unemployed threw up its flotsam and jetsam. But finishing piano frames is rather a fine job and none of the willing and eager applicants there could fill the bill. Joe then made the round of two or three employment agencies who had helped him out in previous similar emergencies. This time, however, they seemed to be without resource, so far as he was concerned. Being in considerable perspiration and desperation by this time, he was probably gladder than he ought to have been to receive a summons to appear at the court of Terrence Mulvaney. Terrence, who sat in judgment in the back room of his own beverage emporium, the place where Lathrop secured his “li’l’ drinks,” had heard, in the usual wireless way, that there was a finisher needed at the big factory Lathrop still owed Terrence for a good many of his “li’l’ drinks.” Furthermore, Terrence, by virtue of some mysterious underground connection, pulled mysterious wires, so that an invitation from him was a command. For these reasons, also, Joe Lathrop found it discreet in his own eyes to engage on the spot Tim Murphy, a very dear friend of Mulvaney and, according to Mulvaney’s own impartial testimony, a very worthy and deserving man.

BREAKING IN AN INCOMPETENT

Valuable hours and moments of the company’s time were consumed in initiating Tim Murphy into the employ of the company. There were certain necessary processes in the paymaster’s department, the accounting department, the liability department, the tool room, and the medical department.

Now, while Murphy had had some experience in finishing piano frames, he was utterly unfamiliar with the make of piano produced in this factory. Likewise, he was ignorant of the customs, rules, and individual methods which obtained in the factory. This meant that his employers paid him good wages for five or six weeks while he was finding his way around. It was good money spent without adequate return in the way of service. In fact, during these weeks, the company would probably have been better off without Tim Murphy than with him, for he spoiled a good deal of his work, took up a great deal of his foreman’s time which ought to have been applied in other directions, broke and ruined a number of valuable tools and otherwise manifested those symptoms which so often mark the entrance into an organization of a man propelled by pull rather than push.

The trouble in Tim Murphy’s corner continued to halt and disorganize the work in the department so that there were still further delays and losses up and down the line. All this was bad enough, but by the end of five weeks of Murphy’s attachment to the payroll he had demonstrated that he was not only incapable, indolent, careless, and unreliable, but that he was a disorganizer, a gossip, and a trouble maker.

BAD EFFECT UPON OTHER EMPLOYEES

Finally the superintendent, who in some mysterious way had managed to escape the entanglement of underground wires running from Terrence Mulvaney’s saloon, issued a direct, positive order to Foreman Lathrop, and Murphy’s place in that factory knew him no more. Nor was Murphy astonished or disappointed. He had been expecting this very thing to happen, and was prepared for it. So when he walked out, two skilful, but easily influenced companions, walked out with him. Thus Joe Lathrop had, added to one of his frequent early morning headaches, the serious trouble of trying to find three men to fill yawning vacancies. The company was faced with a new series of losses even greater than those which had followed the discharge of Robinson. Furthermore, there was trouble and disorganization among the men still remaining in the department. Every man there had liked and respected the competent young worker, Robinson. They all knew that he had been discharged largely because Joe Lathrop was jealous and somewhat afraid of him, and because Joe had had a bad headache and grouch. They resented the injustice. Their respect for their foreman dropped several degrees. Their interest in their work slackened. “What is the use,” they thought, “to do our best when superior workmanship might get us thrown out of here instead of promoted?”

And so Joe Lathrop’s series of “li’l’ drinks” finally resulted in decreasing the efficiency of his department to such an extent that the superintendent was obliged to discharge him. Then the superintendent was in for it. He had to find a new man. He had to take the time and the trouble to break the new man in, and the company had to share the losses resulting from disorganization until the new foreman was installed.

This is not a fanciful story, but was told to us by a man who knew the superintendent, Joe Lathrop, Robinson, Terrence Mulvaney, and Tim Murphy. Nor is it an unusual story. Just such headaches, discharges, troubles, and losses are occurring every day in the industrial and commercial institutions of this country.

This story illustrates not only the high cost of constant change in personnel, but also the high cost of leaving the important matter of hiring and firing to foremen. Where this is done, discharges without cause, the selection of incompetents, grafting on the payroll, inside and outside politics, the indolent retention on the payroll of those who are unfit, and many other abuses too numerous to mention, are bound to follow.

ONLY ONE LEGITIMATE REASON FOR HIRING

There is only one legitimate reason for putting any man or woman on the payroll, namely, that he or she is well fitted to perform the tasks assigned, will perform them contentedly and happily and, therefore, be a valuable asset to the concern. But with foremen, superintendents, and other minor executives selecting employees, for any reason and every reason except the legitimate reason, it is small wonder that employees grow discontented and leave, are demoralized and incompetent so that they are discharged. For these reasons it is an unusual organization which does not turn over its entire working force every year. The average of the concerns we have investigated shows much more frequent turnover than this.

Under these circumstances, it should be easy to understand why our efficiency engineers and scientific management experts find the average organization only 25 per cent efficient. And this is not the only trouble we make for ourselves as the result of unscientific selection in the rank and file. In many cases we use no better judgment in the selection of even our highest and most responsible executives. If it is true, as has been so often stated, that a good general creates a good army and leads it to victory, and a poor general demoralizes and leads to defeat the finest and bravest army, then it is more disastrous for you to select one misfit executive than a thousand misfits for your rank and file.

In our next chapter we shall attempt to show some of the troubles which overtake a man who selects the wrong kind of executives.