Incentives in Industry

    Abstract

    IN an address to the Leicester Centre of the Institute of Industrial Administration on "Incentives for Indirect Workers"(J. Inst. Indust. Admin., 5, 14; 1944), Mr. Harold White gives an interesting analysis of the incentives affecting workers not directly engaged in manufacturing processes or the assembly or finishing of products. After discussing the characteristic features of the indirect worker's job, he indicates seven types of incentive—particular interest in the type of work, personal pride in the apparent importance of the position held, increase in rate of pay, opportunities for promotion, bonuses based on earnings of direct workers, ex gratia bonuses, and permanency of position—the effectiveness of which depends largely on the intelligence and ambition of the individual and the general nature of his job. Factors on which actual bonus schemes have been based are next considered, and Mr. White-head's review of these schemes leads him to six conclusions, as follow. The big majority had proved sufficiently satisfactory to be considered a permanent feature of the company's policy. The more direct the bonus to the indirect worker, the better the response. Confidence in the management is essential to the success of a scheme. 'Ready-made' schemes are dangerous; no standard programme of incentives can be laid down for adoption without studying and evaluating internal circumstances. An incentive plan for indirect workers cannot be established by intuition: it demands thorough and careful forethought. The probable results, in cash, to the indirect workers must be fully considered, so that the probable amount is a real incentive, and not merely a financial liability to the company.

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