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Tony Cliff

The employers’ offensive

Chapter Four: A new wage pay system, measured day work

One of the main purposes of most productivity agreements is to get rid of piece-work, of payment by results (PBR), and replace it by one kind or another of fixed day wages, if possible by measured day work (MDW). The reason is quite plain – the system of payment prevailing over many decades somehow got out of the control of management. This point needs going into a little deeper.
 

National wage negotiation and wage drift

Workers’ earnings depend on two main factors – firstly, industry-wide bargaining between the national trade union or group of unions and the corresponding employers’ organisation, and, secondly, bargaining within the individual firm. Generally speaking, national minimum rates are bargained on the national level, while at the local level negotiation takes place over such matters as piece-work rates and other forms of payment by results, additions to wage rates such as bonuses, and local rules and practices including the manning of machines and demarcation questions. Of course, this two-tier system of negotiating does not apply to all workers. Where there is only one employer, who fixes a standard rate of earnings for all workers in his employment – as in the public services, on the railways and buses, and in teaching – the two-tier system does not apply. Broadly speaking, the two-tier system applies to most of the private sector, with the exception of highly centralised areas like the banks.

Where there is only a one-tier system of negotiation, the national collective agreement must specify the actual pay received by workers quite closely. [1] Most of the “wage drift” which we discuss below is generated in industries with the two-tier system of negotiation, but a two-tier system has a quite large, although indirect, impact on the one-tier system, because workers in one industry always compare their actual earnings with what workers in other industries are getting. This process has been called “leap-frogging”. National bargaining in the two-tier system between the union or group of unions and the employers’ organisation determines the national minimum wage for a particular industry. This is not necessarily what workers in that industry earn, however. Thus, for example, in 1964 the national standard time rate for an engineering fitter was £10 11s 8d, but actual average earnings for all fitters on time rate (excluding overtime) were £16. [2] The difference between nationally negotiated wage rates and actual earnings is called the “wage drift”:

Since 1948 the standard wage has fallen as a proportion of average wage earnings in most industries, while the importance of supplementary payments – the difference between the nationally negotiated wage rate and earnings (excluding overtime payments) – has grown. As a proportion of earnings, supplementary payments in manufacturing rose from about 19 percent in 1948 to about 26 percent in 1959. [3]

Although wage drift has played an increasingly important part over the economy as a whole since the war, it actually varies quite considerably between the different industries, to a large extent according to the strength and organisation of the workers in the different firms. The following table illustrates this:

In the building industry the wage drift is very large. Thus, while the three-year agreement signed recently offers builders an increase of 9½d an hour spread over three years, the actual bonus on building sites of London is very often about five or six shillings an hour.

Actually, the term “wage drift” is a little misleading. It would be much better called wage drive, since it is the result of pressure from workers in the better organised industries and firms under conditions of full employment.

Now the impact of wage drift (or wage drive) on the general standard of earnings is much greater than it looks in the simple calculation of the proportion of wage drift in the nationally agreed minimum wage. This can be seen if we look at the dynamics of wage bargaining.

Let us assume that national negotiations gave a fitter a minimum wage of £5 a week, and that in a whole number of factories the wage drift amounted to another £1 a week. In the next round of national bargaining the pressure in all factories would be to raise the national minimum to £6 a week, and again the better organised workers would push ahead for a further wage drift, and so on and so on. In this way the most advanced section of the engineering workers would affect not only the actual wage drift, but also the national standard. Not only the “ceiling” but also the “floor” would be raised. [5]

And in industries where there is only one tier of negotiations, as on the railways, wages are affected by wage drift in other industries. The railwaymen demand wages comparable to the earnings of workers in other industries where wage drift has taken place. No driver of a railway engine would accept a wage similar to the nationally negotiated minimum wage for fitters, that is something like £11 a week. What he would want, and would get, would be something similar to the fitter’s actual earnings, including both the nationally negotiated wage rate and the wage drift.

In some cases the causal chain works in the opposite direction. National wage rises are followed by changes in the earnings of various groups, so that other groups of workers will try to restore the percentage difference between themselves and those who got their wage rises through national negotiations.

For a clear illustration of the impact of “wage drift” we need only follow the story of the three years of package deal (1964-67) in the engineering industry. The nationally agreed basic wages of skilled workers moved at a nil rate in 1964, nil rate in 1965, 2.4 percent in 1966, and 2.3 percent in 1967. Over the whole period wages should have risen by as little as 4.7 percent. However, between October 1964 and April 1967 wages rose by 17.1 percent – the wage drift was as high as 12.4 percent. [6]

You can see from this graph how the difference grew while the agreement was in force. [7]

Actual earnings of fitters and labourers in EEF firms compared with package deal efects on June 1964 earnings (overtime excluded)

The employers become extremely worried at the “drift”

In 1956 the Coventry and District Engineering Employers’ Association established a working party to analyse the drift. A similar body published an extremely interesting study in 1968 entitled Working Party Report on Wage Drift, Work Measurement and Systems of Payment (referred to from now on as the Coventry Blue Book). [8] The main author of this book was George Cattell, a Rootes director, since loaned to the DEP to aid the government in its efforts to introduce productivity deals:

The problem of wage drift and the fact that Coventry wage levels were well above the national average continued to cause concern. The average hourly earnings nationally in the federation for skilled production workers in September 1955 was 5s 3½d while the comparable figure in Coventry was 7s 3½d, a gap of 2s.

In 1948 the average earnings nationally had been 3s 4½d, while those in Coventry had been 4s 3¼d, a gap of 10¾d. Thus the gap in hourly increases in seven years had increased by 1s 1¼d.

And the gap went on widening:

By June 1964 the national average weekly earnings for skilled production workers in the federation was 363s 8d, with the comparable figure in Coventry being 497s, i.e. a differential of 133s 4d ... In June 1964 the earnings of skilled production workers in Coventry were 11s 10d compared with a national average of 8s 8d, a gap of 3s 2d per hour. However, in June 1965 the earnings of this category in Coventry was 13s 2½d compared with a national average of 9s 9d, i.e. a gap of 3s 5½d.

In the years since World War Two ended, national increases have only accounted for about one third of the total increase in wage levels in Coventry. This contrasts with the national average position where national increases have accounted for about half of the total increase in wage levels since the war ended. [9]

The above process is illustrated clearly by the graph below.

Wage drift – the problem: the rising hourly earnings of skilled engineering workers 1956 to 1966

There is hardly any doubt that the driving force behind wage drift is payment by results.

Piece-work systems encourage wage drift – in simple terms because of the apparent impossibility of objectively fixing a piece-rate and management turning a “blind eye” to such looseness particularly in the early stages to get the job off the ground, which become impossible to adjust later on, while methods remain the same. Furthermore, the looseness so embodied acts as a catalyst to other individuals or groups on older jobs to seek a similar increase in earnings potential, and as the earnings of the piece-workers in general go up in the establishment or district there is also pressure from the time-workers for their rates to be raised to catch up; this pressure will eventually run right through the establishment. [10]

To support the contention that PBR is the fly in the ointment the Coventry Blue Book compares the wages of four Coventry motor firms operating under piece-work systems and a motor company which does not belong to the Engineering Federation and has a time-rate wage structure (probably Ford).

The same effect of payment by results on wage rises was clear also from other industries besides engineering. Thus while dockers in Liverpool work on average some four hours per week longer than in London, their earnings were about a quarter lower, because payment in London is by piece-rate, while Liverpool is not primarily a piece-rate working port. [11]
 

Effects of wage drift on wages of white collar workers

The wage drift of workers on piece-rate affects the wages and salaries of other workers in the same establishments, including the white collar employees. As the Coventry Blue Book complains:

In recent years there has been increasing militancy and activity by the growing staff trade unions with regard to salary levels. It is fair to say that apart from the normal argument of comparability with staff salaries elsewhere in the district, the most recurring argument put forward by the staff trade unions is the adverse relationship between staff salaries and manual workers’ wage levels ... There can be little doubt that wage drift is a factor tending to cause dissatisfaction about salary levels among staff generally. [12]

Between January 1962 and June 1966 the weekly salary of Coventry draughtsmen rose by £5 15s 0d; in the same period the average of Coventry skilled production workers rose by £5:

There can be no doubt that the elimination or significant reduction of piece-work wage drift would therefore tend to remove one of the staff unions’ traditional arguments based really upon manual workers’ wage drift. At the same time it would probably remove a source of real dissatisfaction amongst staff employees. Tackling the problem of wage drift should therefore be regarded as tending to deal appreciably with the growing problem posed by the staff trade unions seeking to achieve or maintain a certain parity or differential with manual workers’ wage levels. [13]

The last but not the least plank in the condemnation of PBR by the employers is that it undermines the prerogatives of management to manage.

It “slowly and surely wrests from management an area of control that is essentially a management function, until inevitably shopfloor management have little or no control whatsoever and workmen are then able to reach that point where they can achieve their rate of incentive payment by negotiation and work at whatever rate suits them best”. [14]
 

Piece-work turns on its maker

For generations piece-work has been the employers’ most valuable weapon in intensifying exploitation, its aim to make the worker drive himself continuously in order to earn his daily crust. For decades the employers tried their hardest to force it upon an unwilling workforce.

In 1852 members of the Amalgamated Society of Engineers, the main engineering union, were locked out for six months, in the main for their opposition to the introduction of piece-work. [15] Workers’ resistance to piece-work was so stubborn that even as late as 1886 only 5 percent of the workers in engineering were paid on a piece-rate system. [16] In 1889 a fierce ten-month struggle against payment by results was defeated by the employers. In 1889, after a 30-week lockout of the Amalgamated Society of Engineers, the employers imposed the Terms of Settlement Agreement which, among other things, stated:

The right to work piece-work at present exercised by many of the federated employers shall be extended to all members of the federation and to all their union workmen.

The prices to be paid for piece-work shall be fixed by mutual arrangement between the employer and the workman or workmen who perform the work. [17]

Even after the First World War the principle of opposition to piece-work was not conceded. [18] But the employers did not stop their pressure.

However, over the last 30-odd years the situation has changed radically. Before the Second World War a reserve pool of unemployed workers could be used (or threatened to be used) by employers to discipline employed workers. The PBR system rested upon a bargaining relationship between employer and employee, and management knew that they were by far the stronger of the two in the “bargain”. But under the conditions of full employment which has lasted since the Second World War workers gained the upper hand. They had the bargaining power of a shortage of labour behind them. Coupled with a strong factory floor organisation, workers have been able to more and more encroach on the power of the management – there has been creeping workers’ control.

The employers introduced piece-work to bypass the unions. “Mutuality” meant that prices were agreed between the employer and the individual worker, without union interference, and with the worker in a weak position to bargain. The spread of PBR in itself stimulated shopfloor organisation, finally turning “mutuality” into a weapon in workers’ hands – collectively they can hold out for a good price, while management does not want a long dispute over a price that only involves a handful of workers.

Whereas at its introduction PBR was a very effective method of intensive exploitation, today, in highly organised plants, workers can gain from it higher wages and a degree of control over the organisation of the plant.

In the negotiation of certain piece-rates there will be some discussion on basic engineering problems, such as achieving certain quality standards, but the speed of working is never discussed. The control over speed is the prerogative of the worker.

One management adviser described the way workers controlled output under the piece-rate system like this:

We all know that some piece-rates are “loose” whilst others are “tight”. We also know that, frequently, employees restrict their reported production. They may hold back the job tickets on which payment is made on days when they feel they have produced more than it is wise to turn in. By thus “banking” the tickets they can build up a “kitty” to use on days when they may be working on jobs with a “tight” rate or when, perhaps, they are feeling unwell and unable to produce what is regarded as normal output. In a recent study ... 97 percent of the employees reported that the “kitty” was very important to them, in that it evened out wage fluctuations and helped to guarantee a steady take-home pay. More fundamentally, it gave them a measure of control over their own situation; they did not feel they were at the mercy of forces outside their control; to some extent they were “masters in their own house”. [19]

Now nothing irritates management more than workers’ control, even if it is very partial. The employers, having been fervent supporters in the past of the piece-rate system, are now looking for a change to a system that will restore to them the control that they have lost in their establishments and at the same time tackle the problem of wage drift.
 

Tightening managerial control over piece-work

The ideal alternative to piece-work from the employers’ standpoint is measured day work, with which we shall deal presently.

Where industry is neither flow production nor mass production, the cost of the product would not justify the extremely high level of supervision which is the prerequisite of MDW. Where batch production prevails – and this covers the employment of millions of workers – management cannot undertake measured day work. The best option open to management is the tightening of control within the piece-work system, by undermining “mutuality”.

The argument for such policies was advocated coherently both by the PIB and by the Coventry Blue Book.

The PIB urges management to control the operation of PBR rigidly so that workers can raise their earnings only through greater effort. Systematic work study should be used. Rate-fixing should be insulated from shopfloor bargaining pressures. The worker should be free to bargain only with his foreman, whose own decisions should be closely controlled by higher management. The board suggests that piece-work systems should be so operated that bonus earnings make up only a quarter of the average worker’s pay packet, and it prefers “time saved” systems (which set a maximum limit to earnings, however hard the worker sweats) to straight piece-work. Formal negotiations at factory level should lay down the procedure to be followed when setting rates, together with “standard” earnings for each grade of worker. The board summarises its basic intention thus – “mutuality” has to be removed from the individual job to the enterprise as a whole. [20]

A PBR system is working successfully where:

(a) The rate of increase of average hourly earnings (excluding overtime and increases paid under industry-wide agreements or their equivalent in non-federated firms, and excluding also increases demonstrably attributable to increased worker effort) is 1.5 percent or less a year.

(b) The proportion of average earnings (excluding overtime) which takes the form of variable output bonus does not exceed one quarter.

(c) Standards of performance are set by work measurement carried out by adequately trained stall whose consistency in rating is regularly checked.

(d) Enterprise or industry agreements establish clear ground rules separating the process of pay negotiation from the setting of work and ensuring uniformity of practice in respect of the latter.

(e) The “learning curve” of “improvement effect” is taken into account when establishing work standards for new jobs and new workers, or revising them for old jobs.

(f) The differentials between the pay of different occupational groups are determined in detail by job evaluation, or a systematic and comprehensive agreement (or both), and are specified not merely in terms of basic rates, but of “standard earnings” or the equivalent.

(g) The suitability and administration of the system has undergone a major investigation within the past three years. [21]

The Coventry Blue Book also suggests the imposition of more rigid managerial control over piece-work. Like the PIB it also sees the solution in abolishing the principle of “mutual agreement” on piece-rates between management and the individual worker. Instead it recommends that job times should be fixed unilaterally by “work study engineers”, with no opportunity for bargaining. These times would he translated into rates of pay, by means of a “conversion factor” negotiated for the factory as a whole. Workers would lose the means of raising wages through shopfloor pressure: “The complete elimination of bargaining about money or payment between the operator and the rate fixer means that management is in a much better position to control its labour costs than at present.” Under existing piece-work systems many shopfloor bargains take place every day, and management is usually reluctant to risk a strike which could close the whole factory over the wages of a handful of workers. Under the new system bargaining would take place only when the unions submitted a formal claim for an increase in the “conversion factor” for the whole factory. With such a claim, “as higher management will normally be able to anticipate the possibility of a confrontation, it should be able to plan ahead ... and may decide it is worth contemplating a serious strike”. Employers would be confident that, if the unions were defeated in such a strike, “they will be unlikely to submit another claim before a reasonable period of time has elapsed”. [22]
 

Measured day work

However, all suggestions for tighter control of piece-work are only palliatives. The ideal solution, from management’s point of view, is MDW. This has been defined thus:

A fixed hourly rate payment system based upon quantified performance standards which have been established by work measurement techniques. When operators fail to reach standards through their own fault, this becomes a question for discipline or retraining. [23]

Under MDW the worker gets time wages, yet management establishes and enforces production standards. Instead of merely controlling the price for each item produced by the worker, the management controls the worker’s production on an hourly basis throughout the day.

MDW is not new. The term was used in the United States in the 1930s, and the consultants who introduced it to Britain installed their first scheme in 1947. However, until the last few years the advance of MDW was very intermittent. In 1956 Vauxhall went over to MDW, sometime later the big engineering enterprise Glacier Metal followed suit, then Pet Food, and a short time later the whole cigarette industry adopted the system.

A variation on the straightforward MDW has been adopted by Philips Industries, the electrical appliance producers employing more than 30,000 workers in Britain. The system Philips adopted was halfway between MDW and an ordinary incentive scheme. Jobs are classified, with a scale of pay for each class. Performance is measured by adopting 70 work-units an hour as the minimum for a trained operator. A worker who thinks he can maintain this rate accepts a “contract” that he will do so whenever possible, the company pays him at the appropriate rate for all hours, and “when the next performance step has been attained, the worker is free to accept a new ‘contract’, involving the higher target and improved pay level”. [24]

In the mines the Power Loading Agreement of 1966 meant a change from piece-rate to MDW. Under the agreement “method study” is used to determine the number of men employed about the coalface. Members of these teams are paid a fixed wage per shift, which is based on the average earnings in each area before the agreement. The spread of earnings between regions is thus being narrowed, and it is intended that all power loading teams shall be on the same rate of pay by 1971.
 

Strengthening power of management

Upper Clyde Shipbuilders also moved towards MDW, following the pioneering work of the shipyard of Alexander Stephens & Sons, and then Fairfields. So did the Swan Hunter shipyards on the Tyne. MDW was also introduced into the railway workshops.

MDW is also being rapidly adopted in the car industry – first Vauxhall and Ford, and then came the turn of Rootes which, having successfully pushed it into its new Glasgow plants, has more recently got it adopted at the Coventry factory, although in a somewhat modified form. British Leyland has not so far got MDW introduced generally – in, for example, the new Scottish truck plant or in the Pressed Steel Fisher factory at Llanelli. Also, at the new British Leyland factory, Crofton Hackett, Longbridge, a brand new £26 million semi-automatic plant producing the new Maxi engine, workers are on an interim MDW system. It seems, however, as if British Leyland is about to make big efforts to get this system introduced into its main plants.

One of the main aims of productivity deals, in the words of Allan Flanders, publicist of the famous Fawley productivity agreement, is to put an end to the “abrogation of management by management”:

This is the aspect of productivity bargaining that I particularly want to stress. I find it difficult to see how the accumulated disorder, which is the heritage of two decades of post-war growth in the unofficial system of collective bargaining, can be cleared up without the help of productivity agreements. The re-establishment of order and control is central to my case for productivity bargaining, because in the long run this may be far more important than the immediate gains that can be found in terms of increased labour productivity. [25]

And, with considerable relish, the same author reports:

More and more managements seem to me to be becoming aware that the labour situation has drifted dangerously far and that they are faced with the need to re-establish control over their workers. And since in the modern world they can’t re-establish control unilaterally, the plant productivity bargain seems to them a logical first step towards a modern viable system of managerial control over pay and effort. [26]

The Coventry Blue Book explains how and why MDW will reduce the power of shop stewards: “The complete elimination of bargaining about money or payment between the operator and the rate-fixer ... means that higher management is in a much better position to control its labour costs than at present”. [27]

At the same time MDW will enhance the power of foremen:

If a company decided that it wished to change from piece-work to a fixed rate system of payment it would be necessary ... to improve the quality and increase the quantity of supervision.

Rootes Group has over the past year been considering the implications in regard to supervision of a move from piece-work to a fixed day rate. They concluded that the supervisor has a more direct responsibility for production in that he must ensure that each operator does, in fact, perform the operations, as specified, at the required rate and for the set period. They concluded that if the foreman were to do this effectively a higher density of supervision would be necessary and they have set out to reduce the ratio of men to supervisors from around 50 to one to 25 or 30 to one.

This should effect the re-establishment of the supervisor as a leader and manager of his section. He will be expected to take more decisions and exercise much closer control over his operators – for example, he would have to assess an operator’s capability, skill, reliability and future potential ...

He will be required to criticise subordinates when work or conduct fall below set standards. Further, he may be responsible for making an assessment of the subordinate’s rates of payment relative to his work level and, if necessary, persuade higher management to change the rate if he, the supervisor, feels that it is inconsistent with the work being carried out by the subordinate. [28]

In fact, in Rootes Stoke engine plant, since the introduction of MDW, the number of foremen has increased considerably. The ratio at present is about one to 20. The final aim is one to ten (because of their new uniforms, workers can see them coming).

Again, in the mines, since the Power Loading Agreement, there has been a rise in the number of supervisors and management officials. The table below gives an example for the North Derbyshire area NCB:

The ratio of officials to workers was approximately one to 12 in June 1967 and one to 9.5 in July 1968.

A Doncaster miner wrote to me:

Since the National Power Loading Agreement, power certainly has passed from the pit. Previously payment resulted from argument at the point of production, between checker (charge man), leading collier elected by his mates, and the official. Now argument is only possible on the fall back rate. The charge man increasingly is a management man.

The miners’ lodge has been impotent, union officials being trusted even less. If you go in with a union official you have got less chance of a favourable settlement than if you go in yourself.

The one remaining rank and file power lies on the safety question, the authority of the worker-appointed inspectorate being very strong.

Shop stewards in ICI wrote the following to me:

Charge hands on the floor had up to now certain duties other than man management. Foreman was an office job. Now the term charge hand has been abolished – all made up to foremen – but all of them are employed on the floor, and ancillary duties have been removed.

Leslie Blakeman, when he was labour relations officer of Ford, summed it up well, saying, “A day-rate plant probably requires 25 percent more supervision than one on payment by results, but this is a small price to pay for freedom from disputes and control over costs and methods”. [30]
 

Undermining the shop steward

All productivity deals aim to undermine the power of the shop steward. The Coventry Rootes 1968 Draft Agreement states:

It is accepted that the present system of shop steward representation will be revised in line with the reorganisation of both the management structure and the changed system for payment. This change will enable a more realistic approach to representation to be adopted, and will ensure more effective union representation with management at all levels. The elimination of piece-work and therefore the elimination of: (a) piece-work negotiations; (b) piece-work booking; and (c) claims for ALC and other compensatory payments will automatically alter the function of the shop steward, making it unnecessary to have representation on a gang basis. The introduction of additional foremen provides a more readily accessible contact with management ...

In view of these facts there will be an agreed and reduced ratio of shop stewards to employees which will ensure proper representation on a predominantly geographical basis. [31]

Rootes’ purpose was to restrict the stewards’ mobility within the factory. As the finishing touch Rootes proposed to turn senior stewards into minor appendages of management.

Following this, on 15 October 1969, Rootes management suggested a new procedure. The union’s representatives rejected the management proposals out of hand, but past experience suggests that similar proposals will nevertheless form the basis for subsequent discussion.

Rootes’ proposals cover four main areas: negotiating machinery, grievance procedure, shop stewards and union status.
 

(1) “Authoritative bodies” will be formed jointly of management and union representatives at local and national level to discuss “efficiency”, and wages and conditions.

The aim is clearly to eliminate traditional shopfloor bargaining and substitute bureaucratic joint bodies remote from shopfloor pressure. The stewards insist that the only authoritative negotiating body is the joint shop stewards committee at each plant.
 

(2) The new grievance procedure will require the worker himself first to raise any problem with his foreman, who will make a written report if no settlement is reached. Three stages of meetings will follow, which may involve up to three weeks delay. Only then will strike action be allowed – and then only after ten days notice has been given, national union officials called in, and a meeting held of the local negotiating council.

The proposals restrict the right of stewards to raise grievances on behalf of their members. They require formal written grievances which may well deter individual workers from raising problems and, while obliging the unions to exhaust procedure before taking action, place no restriction on management’s right to change conditions (and so are even more biased against the workers than is the official Engineering Procedure).
 

(3) The management intends to decide jointly with the unions the number and “constituencies” of stewards. Its aim is for geographical constituencies, in some cases with stewards representing members of several unions. Stewards will be allowed to leave their sections or see their convenor only after receiving permission from their supervisor. All stewards will have to attend “induction courses”. If a steward is moved from his section (mobility is one element in the MDW agreements) a new steward must be elected within two weeks.

The aim is clearly to impose numerous restrictions on the rights of stewards and their ability to exercise their functions. Attempts will be made to brainwash stewards. Where this fails, management has merely to move a militant steward to deprive him of his position.
 

(4) Management proposes a closed shop for new employees and a checkoff system. Unions will discuss with management their areas of recruitment and representation. Permission will be needed for union meetings in working hours. This will involve notifying the subject of the meeting and the decision reached. Management will even be able to control what goes on union noticeboards.

These proposals reflect the general intention to integrate the unions within the company’s authority structure and to limit all rights of independent initiative.

While the union side rejected these proposals, some features of the recent discussion are ominous. The company proposals were apparently sent to national union officials two or three weeks before the meeting; local union officials seem to have seen them only a few days beforehand, while convenors in general seem to have had no advance warning. Copies have not been provided for ordinary stewards, and there are reports of convenors refusing to discuss the proposals with the shopfloor or even with their JSSCs.
 

Similarly the productivity deal in ICI is going far in undermining the power of the shop steward. As an ICI steward wrote to me:

Prior to it jobs were assessed according to Work Study Standards, the minutest detail being haggled over by the steward, invariably the steward’s point being won. The fight here is for the wage packet.

Under the productivity deal (Weekly Staff Agreement) the intention is that Work Study Standards should be strictly adhered to, especially since they are “scientifically” appraised. The process of argument will be entirely different. A new process will be issued two weeks in advance of implementation. Time will be given for the stewards to haggle all right, but not in front of the machine and operative as before. Instead, even if there is no agreement, the process will be implemented after the two-week period has ended. Discussions under this arrangement are still allowed to continue.

The danger of management logic becomes obvious. It moves the steward away from the point of production and engages him in prolonged arguments over the minutiae of production.

It ceases to be a direct argument about money and becomes merely a diversion. The two-week rule takes power away from the steward.

Even if discussions continue, it is harder to reverse a process once started, and the changes, taken separately, are so small anyway that the operative is not going to argue.

Productivity deals are seen by employers as a means to curbing the militant shop steward. They hope to do this thus:
 

(1) Reorganise their payments systems in such a way as to remove from the bargaining table the issues around which stewards have traditionally argued and in doing so gained their strength. These are mainly the wage levels associated with piece-work rates but also include such questions as waiting times, availability of materials, etc.

(2) To deny stewards the right to bargain on details of new work systems such as MDW.

(3) Increase the number of supervisors substantially and to try and channel workers’ grievances through these lower rungs of management – thereby bypassing the shop steward.

(4) To introduce highly formalised grievance procedures within the factory which enable the management to exclude shop stewards and replace them by the local union officers.

(5) Under cover of flexibility clauses to establish the right to move militants around the factory whenever they begin to build a base and win support.

(6) Under cover of the deal to step up the indoctrination of stewards by means of joint management/union-sponsored courses.
 

The extent to which the employers are successful in these objectives depends very largely on the strength of the factory organisation. What the productivity deal does is to open the way for the acceptance of such changes which, under normal circumstances, would not even be countenanced.

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Notes

1. Even here there is a small amount of wage drift, resulting from the fixing of piece-rates in the situations where they do apply, from more liberal grading of workers, etc.

2. Ministry of Labour, Statistics on Incomes, Prices and Employment, December 1964, Table B12.

3. L.A. Dicks-Mireaux and J.R. Shepherd, The Wage Structure and Some Implications for Incomes Policy, Economic Review, November 1962, p.42.

4. L.A. Dicks-Mireaux and J.R. Shepherd, The Wage Structure, p.42.

5. That wage drift does push up wage rates is clear from the following table:

Whereas the rate of increase of hourly wage rates reached its peak in 1961 and its lowest point in 1959 and 1963, the rise in weekly earnings reached its peak in 1960 with lowest points in 1959 and 1962. Thus changes in weekly earnings (and in wage drift) appear generally a year earlier than changes in wage rates. The drift, therefore, although smaller than the rise in basic rates, accelerates the rise in basic rates. The same causal relationship between wage rate and wage drift was found in a sample of 45 firms in the engineering industry. See S.W. Lerner and J. Marquand, Workshop Bargaining, Wage Drift and Productivity in the British Engineering Industry, Manchester School of Economic and Social Studies, January 1962.

6. Proceedings of a Special Conference between Engineering Employers Federation and Confederation of Shipbuilding and Engineering Unions, 31 October 1967, p.5.

7. National Board for Prices and Incomes report no.104, Pay and Conditions of Service of Engineering Workers, Cmnd 3931, p.37.

8. Coventry and District Engineers’ Employers’ Association.

9. Coventry Blue Book, pp.2-3.

10. Coventry Blue Book, p.7.

11. Final Report of the Committee of Inquiry under the Rt Hon Lord Devlin into Certain Matters Concerning the Port Transport Industry (London, 1965), Cmnd 2734, pp.16-17. Hereafter referred to as the Devlin report.

12. Final Report, p.33.

13. Final Report, pp.4-5.

14. Coventry Blue Book, p.9.

15. J.B. Jeffreys, The Story of the Engineers (London, 1945), pp.34-42.

16. J.B. Jeffreys, Story, p139.

17. Coventry Blue Book, p9.

18. Coventry Blue Book, p189.

19. N.C. Hunt, Second Thoughts on Management Education, Manager no.28, 1960, quoted in R. Marriott, Payment Systems (London 1960), p25. A description of a really beautiful system of shopfloor control of PBR is to be found in S. Lerner and others, Workshop Wage Determination (Oxford, 1969), pp.87-94. Each department elects a piece-rate committee subject to the control of the JSSC. Each committee maintains a fund by levies on workers in the department. An annual works meeting decides a “minimax” earnings level for the whole factory. This minimum figure becomes the target for all piece-rate negotiations – no worker can accept a price which the piece-rate committee thinks inadequate. Where the price offered is inadequate, the worker goes slow and his loss of earnings is made up by the committee from its fund. The “minimax” is also an earnings ceiling – any earnings above the figure must be paid over to the committee, and deliberate rate-busting can attract serious penalties. When the rates on most jobs allow the majority of workers to reach their ceiling without much trouble a decision can be taken to raise the “minimax”.

This is an extreme and very effective form of collective control over PBR, which prevents the conflicts between individuals or sections which are often generated.

20. Prices and Incomes Board report no.65, Payment by Results Systems, Cmnd 3627, pp.49-54.

21. Prices and Incomes Board report no.65, Payment by Results Systems, pp.64-65.

22. Coventry Blue Book, pp.17-18 (my emphasis).

23. Coventry Blue Book.

24. Metalworking Production, 19 February 1964.

25. A. Flanders, in Engineering Employers’ Federation, A Productivity Bargaining Symposium, p.14.

26. Steel Review, July 1966, p.6.

27. Coventry Blue Book, p18

28. Coventry Blue Book, pp34-35.

29. R.H. Heath, The National Power-Loading Agreement in the Coal Industry and some Aspects of Workers’ Control, Trade Union Register 1969, p.190.

30. Financial Times, 19 November 1968.

31. Rootes Motors Limited, Coventry, Proposed Agreement, May 1968.

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Last updated on 16.6.2004