That the latter of these two is properly emphasized by Scientific Management is not always understood by the workers.  When a worker is enabled to make three or four times as much output in a day as he has been accustomed to, he may think that he is not getting his full share of the “spoils” of increased efficiency, unless he gets a proportionately increased rate of pay.  It should, therefore, be early made clear to him that the saving has been caused by the actions of the management, quite as much as by the increased efforts for productivity of the men.  Furthermore, a part of the savings must go to pay for the extra cost of maintaining the standard conditions that make such output possible.  The necessary planners and teachers usually are sufficient as object-lessons to convince the workers of the necessity of not giving all the extra savings to the workers.

It is realized that approximately one third of the extra profits from the savings must go to the employer, about one third to the employes, and the remainder for maintaining the system and carrying out further investigations.

This once understood, the satisfaction that results from a cooeperative, profit-sharing type of management will be enjoyed.

The five methods of compensation which are to follow are all based upon the task, as laid down by Dr. Taylor; that is to say, upon time study, and an exact knowledge by the man, and the employers, of how much work can be done.

DIFFERENTIAL RATE PIECE WORK THE ULTIMATE FORM OF COMPENSATION.—­ Dr. Taylor’s method of compensation, which is acknowledged by all thoroughly grounded in Scientific Management to be the ultimate form of compensation where it can be used, is called Differential Rate Piece Work.  It is described in “A Piece Rate System,” paragraphs 50 to 52, as follows:—­

“This consists, briefly, in paying a higher price per piece, or per unit, or per job, if the work is done in the shortest possible time and without imperfection, than is paid if the work takes a longer time or is imperfectly done.  To illustrate—­suppose 20 units, or pieces, to be the largest amount of work of a certain kind that can be done in a day.  Under the differential rate system, if a workman finishes 20 pieces per day, and all of these pieces are perfect, he receives, say, 15 cents per piece, making his pay for the day 15 times 20 = $3.00.  If, however, he works too slowly and turns out only, say 19 pieces, then instead of receiving 15 cents per piece he gets only 12 cents per piece, making his pay for the day 12x19= $2.28, instead of $3.00 per day.  If he succeeds in finishing 20 pieces—­some of which are imperfect—­then he should receive a still lower rate of pay, say 10c or 5c per piece, according to circumstances, making his pay for the day $2.00 or only $1.00, instead of $3.00.”

ADVANTAGES OF THIS SYSTEM.—­This system is founded upon knowledge that for a large reward men will do a large amount of work.  The small compensation for a small amount of work—­and under this system the minimum compensation is a little below the regular day’s work—­may lead men to exert themselves to accomplish more work.  This system appeals to the justice of the men, in that it is more nearly an exact ratio of pay to endeavor.