What Guarantees the Ruin of Economy? 8 страница
The relations between executives and average employees described by Stalin are so strikingly different from the ethic results of bourgeois reforms in modern Russia that capitalist parasites will claim them to be a fantasy of Stalin’s having nothing in common with reality. But saying this they forget that they have been screaming about Stalin the tyrant «exploiting the people’s enthusiasm» without ever asking themselves what was the source of that enthusiasm. And the point is that its source was the psychological and ethic motivation to labor conscientiously in a collective that existed in the society on the whole. This motivation existed because staff and executives were not enemies bound by the common chain of production relations but «friends and companions, members of a united manufacturing team whose vital concern is the welfare and expansion of their enterprise. The hostility between them has vanished without a trace».
To use a better word there was no trace of this hostility yet the its seeds remained intact in the society’s noosphere. After Stalin was assassinated state policy was altered by party, government and financial executives bent on introducing “elitism”, and these noospherical seeds grew into the reality of nowadays, full of class antagonisms and tensions.
Comradeship should serve as the basis of work organization as work is inevitably and objectively of collective nature at most modern enterprises. This principle also provides grounds for the payroll policy:
«There is nothing to running a business by custom — to saying: “I pay the going rate of wages.” The same man would not so easily say: “I have nothing better or cheaper to sell than any one has.” No manufacturer in his right mind would contend that buying only the cheapest materials is the way to make certain of manufacturing the best article. Then why do we hear so much talk about the “liquidation of labor” and the benefits that will flow to the country from cutting wages — which means only the cutting of buying power and the curtailing of the home market? What good is industry if it be so unskillfully managed as not to return a living to everyone concerned? No question is more important than that of wages — most of the people of the country live on wages. The scale of their living — the rate of their wages — determines the prosperity of the country» (Ch. 8. “Wages”).
He elaborates on these statements a few paragraphs later:
«It ought to be the employer’s ambition, as leader, to pay better wages than any similar line of business, and it ought to be the workman’s ambition to make this possible (put in bold type by the authors). Of course there are men in all shops who seem to believe that if they do their best[86], it will be only for the employer’s benefit — and not at all for their own. It is a pity that such a feeling should exist. But it does exist and perhaps it has some justification. If an employer urges men to do their best, and the men learn after a while that their best does not bring any reward, then they naturally drop back into “getting by.” But if they see the fruits of hard work in their pay envelope — proof that harder work means higher pay — then also they begin to learn that they are a part of the business, and that its success depends on them and their success depends on it.
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“What ought the employer to pay?” — “What ought the employee to receive? These are but minor questions. The basic question is “What can the business stand?” Certainly no business can stand outgo that exceeds its income. When you pump water out of a well at a faster rate than the water flows in, the well goes dry. And when the well runs dry, those who depend on it go thirsty. And if, perchance, they imagine they can pump one well dry and then jump to some other well, it is only a matter of time when all the wells will be dry. There is now a widespread demand for more justly divided rewards, but it must be recognized that there are limits to rewards. The business itself sets the limits. You cannot distribute $150,000 out of a business that brings in only $100,000. The business limits the wages, but does anything limit the business? The business limits itself by following bad precedents.
If men, instead of saying “the employer ought to do thus-and-so,” would say, “the business ought to be so stimulated and managed that it can do thus-and-so,” <yet this requires workers and businessmen to be Bolsheviks in their morals and ethics>, they would get somewhere. Because only the business can pay wages. Certainly the employer cannot, unless the business warrants. But if that business does warrant higher wages and the employer refuses, what is to be done?[87] As a rule a business means the livelihood of too many men, to be tampered with <i.e. careless in regard to these people>. It is criminal to assassinate a business to which large numbers of men have given their labors and to which they have learned to look as their field of usefulness and their source of livelihood. Killing the business by a strike or a lockout does not help. The employer can gain nothing by looking over the employees and asking himself, “How little can I get them to take?”[88] Nor the employee by glaring back and asking, “How much can I force him to give?” Eventually both will have to turn to the business and ask, “How can this industry be made safe and profitable, so that it will be able to provide a sure and comfortable living for all of us?[89]”
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But by no means all employers or all employees will think straight. The habit of acting shortsightedly is a hard one to break. What can be done? Nothing. No rules or laws will effect the changes. But enlightened self-interest will. It takes a little while for enlightenment to spread (put in bold type by the authors). But spread it must, for the concern in which both employer and employees work to the same end of service is bound to forge ahead in business.(…)
It ought to be clear, however, that the high wage begins down in the shop[90]. If it is not created there it cannot get into pay envelopes. There will never be a system invented which will do away with the necessity of <productive> work. Nature has seen to that. Idle hands and minds were never intended for any one of us. Work is our sanity <above all of moral and psychic health>, our self-respect, our salvation. So far from being a curse, work is the greatest blessing. Exact social justice flows only out of honest work (put in bold type by the authors: though it would be more precise to say «conscientious labor»). The man who contributes much should take away much[91]. Therefore no element of charity <and actually financing parasitism and sloth> is present in the paying of wages. The kind of workman who gives the business the best that is in him is the best kind of workman a business can have. And he cannot be expected to do this indefinitely without proper recognition of his contribution. The man who comes to the day’s job feeling that no matter how much he may give, it will not yield him enough of a return to keep him beyond want, is not in shape to do his day’s work. He is anxious and worried, and it all reacts to the detriment of his work (put in bold type by the authors: this is exactly what all post-Stalin reformers achieved on the territory of the former USSR).
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But if a man feels that his day’s work is not only supplying his basic need, but is also giving him a margin of comfort and enabling him to give his boys and girls their opportunity and his wife some pleasure in life, then his job looks good to him and he is free to give it of his best (put in bold type by the authors)[92]. This is a good thing for him and a good thing for the business. The man who does not get a certain satisfaction out of his day’s work is losing the best part of his pay» (Ch. 8. “Wages”).
We shall stop quoting here because in order to make clear the point of our further discussion (discourse) several issues of managing an enterprise and its employees must be clarified.
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Digression 5:
Directly Productive and Auxiliary Labor, Managerial Labor, Remuneration of Labor
Earlier we have quoted the following words of H. Ford in a footnote:
«It is the product that pays the wages and it is the management that arranges the production so that the product may pay the wages».
In the modern world product is in most cases the result of the work of an integral microeconomic system — means of production, the infrastructure of the enterprise and its workers. If one considers only the factors of profit[93] and number of employees the ratio of «profit per employee» is what determines the employees’ wages on the whole. Yet because the collective is heterogeneous in terms of professions, responsibilities and authority the enterprise’s head must face the following triad of questions:
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Whom to pay?
What to pay for?
How much should one pay?
In order to answer those three questions and ensure management efficiency one must have a clear understanding of what every worker’s professional skills and responsibilities are (within the framework of organizational structure), as well as how his or her professional skills contribute to the collective’s productive activity on the whole (the latter may or may not be covered in job descriptions).
If one grades professions without going into much detail one would get the following three categories:
· Workers directly engaged in the manufacturing process are factory personnel;
· Workers engaged in support and maintenance are support personnel (janitors, general-duties men, repair and servicing personnel) that also includes what is generally referred to in Russia as «technical personnel» of various divisions of the enterprise (purchase, accounting, security and others);
· Workers engaged in managing work of other members of the collective and the work of structural divisions each performing a dedicated function are management personnel.
Representatives of these three categories do not have equal opportunities of participating in the manufacturing process and of developing it thereby ensuring the «profit per employee» ratio growth that to a certain extent characterizes the enterprise’s efficiency and its facility to pay wages and salaries to employees and dividends to shareholders.
Besides, in the framework of most modern manufacturing processes there are workers in all the three categories who are busy with performing their professional duties throughout the whole working day. But there are workers whose professional skill the enterprise cannot do without but the manufacturing process is of such kind that work can be assigned them only for a part of workday or only on certain days.
Because the nature of production and technology dictates the way production and collective work are organized, piecework principle in remuneration of production and auxiliary personnel labor is an irrelevant remnant of independent amateurism, of individual cottage craft. When the collective provides the systemic integrity of an enterprise, piecework means the following:
· squabbles within the collective (open and covert) around who gets access to paying and non-paying work;
· constant threat of piecework men violating manufacturing procedures in order to get a higher output which leads to increasing expenditure on technical control service;
· encouraging repairmen and maintenance personnel to commit acts of sabotage to the end of artificially raising their importance and, correspondingly, their payments;
· concealing new and better methods of work and hampering their application within the collective by piecework men of highest qualification to the end of maintaining their monopoly, which is one of the largest obstacles on the way of technological progress and of production quality growth;
· facing the insoluble problem of justifying output norms while workers conceal their true abilities to the end of getting high wages from exceeding established norms.
Just these few mentioned ways of piecework’s destructive influence on the enterprise’s functioning are more than enough for a smart manager (or businessman) to start purposefully eliminating it at the enterprise he controls and in its functionally specialized structural units. But piecework is an enduring phenomenon, and in most cases if it is present at an enterprise it is evidence of a badly managed collective.
When the collective provides for the systemic integrity of an enterprise, taking into account the division of staff into productive, auxiliary (including technical and servicing personnel), managerial personnel according to the nature of their work, the salary-bonus system of remuneration of labor turns out to satisfy the requirement of efficient control better.
This system includes:
· Basic salary — it is absolutely guaranteed. This money is paid for:
Ø having one or several professions that are needed by the enterprise;
Ø the level of qualification in each of the professions;
Ø being ready to conscientiously carry out the orders of superior executives and support their activities on the basis of professional skills and knowledge.
However everything a salary is paid for is not actual work, not the products of labor but only a potential. That this potential is used is the responsibility not of the people who have this potential but on executives, on the entire hierarch of the enterprise’s management and the management of surrounding macroeconomic systems. This is the objective effect of the collective nature of labor in the systemic integrity of most enterprises.
· Bonus is guaranteed by way of statistics, i.e. its amount can range from zero to the equivalent of several salaries and depends on many factors and indices of the enterprise’s work, the work of its units and each staff member. These factors are:
Ø total volume of free profit and the way its comes in throughout the financial year;
Ø assessment by superior executives the staff member’s personal contribution to the collective’s work during the time period which is remunerated (a month, a quarter, a year);
Ø how important this staff member is for the enterprise, judging from his past work and future perspective (this part of the bonus is usually formalized as personal increment in salary granted for long-service, qualification, possessing several professions, speaking foreign languages, ability to solve problems in extraordinary circumstances, etc.);
Ø lump sum payments for special purposes in connection with personal and family life of staff members (depending on what payments of this kind are allowed by the country’s legislature);
Ø loans granted by the enterprise to its employees or remittance of previously granted loans in full or partially.[94]
The salary-bonus system of remuneration of labor operating at an enterprise for several years is characterized by the ratio «income received by way of salary» / «income received by way of various bonuses and personal increments», as well as by the ratio connected with the previous one «income received by way of salary» / «total income including various bonuses».
If the salary takes up a low share in the total income volume (especially if the guaranteed salary exceeds the «living wage» acknowledged by the society only by a small amount or is smaller than the «living wage»), this is a sign of covert slavery flourishing at the enterprise and therefore flourishing in the society which endures such enterprises and such businessmen.
If the share of bonus payments in staff members’ income is large and their salaries are small an employee’s welfare is secured by his ultimate loyalty to executives. It is only their opinion which determines whether he will get non-guaranteed bonus payments or not and what their size will be. When large share of bonus payments in total income becomes a system-forming factor it leads to creating and maintaining a system where staff members are personally dependent on executives and administration on the whole. Personnel are deprived of rights[95] resembling serfs who live in the modern society of science and industry.
Another extreme occurs when bonus payments account only for a small part of staff members’ income. This prevents them from being financially encouraged to put effort in getting higher qualifications, mastering several professions, improving manufacturing processes and work organization on their own accord. They are not interested in doing that because promotion to superior posts accompanied by rise in salary is determined for most staff members by natural biological and demographic factors. It cannot keep up with the pace at which new circumstances appear in a man’s life (birth of children, a need to get better housing in a shorter time, etc.). And the employee might have a chance to resolve these new issues if he got bonus payment for certain achievements in work exceeding the «standard requirements» which the administration demands of a man taking up this post and which are remunerated by the salary set for this post.
Let us also make special note here that we are speaking about the salary-bonus system of labor remuneration, not about pay by the hour or pay by the hour and bonus system. The two systems are essentially different though in some circumstances (for example, working on the conveyor belt) this difference is unclear. Yet there the difference between the systems exists. Pay by the hour remuneration system is based on paying for the time an employee spends at his place of work assuming that the employee is fully busy with work during this time. If the employee wishes to reduce the time he spends at his place of work as compared to the established norm to an extent permitted by the administration his pay will be reduced proportionally.
The salary-bonus system permits (but does not compel the administration to do it) that some categories of staff members can stay at their workplaces for a shorter time that is compulsory for the rest of staff if they keep up with the schedule of work assigned by executives and submit work in due time and quality. In such a case a shorter working time per working day after accomplishing the assigned task does not result in reduction in pay. On the contrary it is itself a kind of a bonus that many will prefer to a money increment.
Actually the salary-bonus system can be a better motivation towards the collective’s conscientious labor than the pay by the hour and bonus system or pay by the hour system, and it is far better than piecework payment. Because there are categories of employees whose volume of professional work is limited by the nature of manufacturing process and its rhythm (hourly, weekly, etc.) it will bring nothing but harm to the enterprises systemic integrity if they are forced to stay at their workplaces during the entire working day. The point is that they will have to imitate labor activity while staying at their workplaces. And imitating labor activity corrupts the imitators themselves, corrupts their associates who do work, gives rise to rows when some people accuse others of pretending to work while they actually work. It undermines the administration’s authority because when an employee has to pretend to work having no real work to do the utmost folly of its executives of all ranks and its inability to organize a coordinated and efficient activity of the collective becomes evident.
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