The most severe trial to which any system can be subjected is that of a
business which is in keen competition over a large territory, and in
which the labor cost of production forms a large element of the expense,
and it is in such establishments that one would naturally expect to find
the best type of management.

Yet it is an interesting fact that in several of the largest and most
important classes of industries in this country shop practice is still
twenty to thirty years behind what might be called modern management.
Not only is no attempt made by them to do tonnage or piece work, but the
oldest of old-fashioned day work is still in vogue under which one
overworked foreman manages the men. The workmen in these shops are still
herded in classes, all of those in a class being paid the same wages,
regardless of their respective efficiency.

In these industries, however, although they are keenly competitive, the
poor type of shop management does not interfere with dividends, since
they are in this respect all equally bad.

It would appear, therefore, that as an index to the quality of shop
management the earning of dividends is but a poor guide.

Any one who has the opportunity and takes the time to study the subject
will see that neither good nor bad management is confined to any one
system or type. He will find a few instances of good management
containing all of the elements necessary for permanent prosperity for
both employers and men under ordinary day work, the task system, piece
work, contract work, the premium plan, the bonus system and the
differential rate; and he will find a very much larger number of