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Soon the new joint union-management was flooded with workers' suggestions. Welders who had stood around waiting for materials began helping to unload. Workers formerly indifferent to substandard work turned out by slackers began raising Cain: it cut down their bonus. Employees and executives became a team working toward a mutual goal. After a year, the Adamson Co. was five times as profitable as in the old days; even after sharing the productivity savings 50-50, management still reaped twice as much income. As for the workers, a union veteran of many picket lines told Scanlon: "Joe, I can't fight here. I'd be fighting myself."
The next year, Scanlon moved into the Lapointe Machine Tool Co. of Hudson, Mass., then on the verge of a strike. Within 20 months its production was up 61%. Said a National Planning Association report on Lapointe meetings on joint production problems: "An outsider has difficulty distinguishing management from union."
The Success. While the plan had worked with troubled companies, how would it work in a successful one? The test came at the Parker Pen Co. of Janesville, Wis. A progressive firm, Parker had an intelligent management and union, a standard incentive system, a new retirement plan, a sleekly modern, air-conditioned plant with such production aids as piped-in music for its workers. Nevertheless, the company found that even a good incentive plan made trouble. Some men in low-paying jobs were taking home more pay than the men in highly skilled divisions.
Invited to come in and help, Scanlon pitched out the old-style incentive system, which promoted individual effort at the expense of the group. He spent days with the finance and accounting people—whose role he considers vital—and devised a productivity norm. In Parker's case, it was the fiscal year March 1953 through February 1954. He then arranged that the savings on output made at less than the costs of the base year figure (as measured by sales value) should go into a bonus pool. A fourth of the pool money was automatically set aside as a reserve fund to be paid out in the break-even or deficit months when no bonus was earned. The rest of the melon—made up of increased value through productivity savings—was split; labor got a whopping 75%, management 25%. The first month's bonus, paid in September 1954, amounted to $43,199, a 13.8% wage increase. In January, the pen and pencil industry's seasonal low point, the workers failed to earn a bonus, but it was the only month they missed (payments from the reserve pool are made only at year's end). They earned a peak 27.1% over their wages in September.
During the year, the eight joint production committees (one in each major department) and the lyman overall "screening committee" (nine workers, eight executives) considered 400 employee suggestions, an average of one for every two workers, and adopted some 240.
Last week, as the plan began its second year, Parker Operations Vice President Philip Hull announced: "I'm a convinced Scanlon Plan adherent."