Magnus Alexander, the economists and the issue of labour turnover

Business History

Volumn 47, Issue 4, 2005, Pages 493-510

  Bruce, Kyle ^a  

^a ASTON UNIVERSITY   (United Kingdom)

Author keywords

[No Author keywords available]

Indexed keywords

LABOR MARKET; LABOR RELATIONS; THEORETICAL STUDY;

EID: 23344445464     PISSN: 00076791     EISSN: 17437938     Source Type: Journal    
DOI: 10.1080/00076790500132936     Document Type: Review

References (103)

1. R.W. Schatz, The Electrical Workers: A History of Labor at General Electric and Westinghouse, 1923-60 (Chicago, 1983), pp. 17-18;
2. S. Jacoby, Employing Bureaucracy: Managers, Unions and the Transformation of Work in American Industry, 1900-1945 (New York, 1985), pp. 15-16.
3. For a deeper discussion of these issues, see K. Bruce and C. Nyland, 'Scientific Management, Institutionalism and Business Stabilization, 1903-1923', Journal of Economic Issues, Vol.35 (2001), pp.1-24.
4. On the latter note, the development of cost accounting rooted in the work of F.W. Taylor and his engineering disciples figured prominently. A deeper discussion of this issue can be found in J.A. Litterer, The Emergence of Systematic Management as Shown by the Literature of Management from 1870 to 1900 (New York, 1986), chapter 4, pp.149-84.
5. Also, Evan Metcalf in 'Economic Stabilization by American Business in the Twentieth Century' (unpublished Ph.D. thesis, University of Wisconsin, 1972) has argued that advocates of regularisation, many of whom were members of the scientific management community, agreed with Taylor's insistence that most businesses were not operating at optimum efficiency because of their ignorance of overheads, which were at the heart of the cost to the firm of fluctuating output and employment.
6. Jacoby, Employing Bureaucracy, pp. 116, 121.
7. B. Kaufman, 'Personnel/Human Resource Management: Its Roots as Applied Economics', History of Political Economy, Vol.32 (2000) Supplement, pp.229-56.
8. Jacoby, Employing Bureaucracy.
9. H. Gitelman, 'Being of Two Minds: American Employers Confront the Labor Problem, 1915-1919', Labor History, Vol.25 (1984), pp.189-216;
10. idem, 'Management's Crisis of Confidence and the Origin of the National Industrial Conference Board, 1914-1916', Business History Review, Vol.58 (1984), pp.153-77.
11. Kaufman, 'Personnel/Human Resource Management'.
12. Gitelman, 'Management's Crisis', p. 157, note 13;
13. idem, 'Being of Two Minds', p. 195, note 14.
14. Though David Noble in America By Design: Science, Technology, and the Rise of Corporate Capitalism (New York, 1979) asserts that he was born in Germany.
15. Gitelman,. 'Management's Crisis';
16. Noble, America By Design.
17. M.F. Guillen, Models of Management: Work, Authority, and Organization in Comparative Perspective (Chicago, 1994), pp.4-5.
18. At this time GE's board chairman, Owen D. Young and its president, Gerard Swope, were two leading corporate liberals or 'welfare capitalists' of the Progressive era, actively supporting the notion of 'management as a trusteeship', paternalistic 'welfare work' practices, and more scientific and humane employment/personnel management. Moreover, the immediate stimulus of GE's personnel policies was, in fact, Alexander's pioneering study. D. Wren, The Evolution of Management Thought (New York, 4th edn., 1994);
19. Schatz, The Electrical Workers, pp. 11-18.
20. Gitelman, 'Being of Two Minds';
21. idem, 'Management's Crisis'.
22. Gitelman, 'Being of Two Minds', p. 104.
23. Gitelman, 'Management's Crisis';
24. idem, 'Being of Two Minds';
25. Noble, America By Design.
26. His paper was later published as 'Hiring and Firing: Its Economic Waste and How to Avoid It', in Annals of the American Academy of Political and Social Sciences (Annals hereafter) in 1916, in a special forum on labour turnover.
27. The US Bureau of Labor Statistics saw fit to publish a version of this paper, 'The Cost of Labor Turnover', in its Bulletin in 1917;
28. reproduced in D. Bloomfield (ed.), Employment Management: Selected Articles (London, 1920), pp.259-76.
29. Alexander, 'The Cost of Labor Turnover', p.260.
30. Alexander, 'Hiring and Firing', p.128, emphasis added.
31. Ibid., pp. 134-5
32. In the later 1917 version of the paper, 'The Cost of Labor Turnover', the amount specified is $993,767.50 - I cannot account for the discrepancy given the raw data and the calculations cited in both papers are the same.
33. Alexander, 'Hiring and Firing', p.140
34. I b i d.
35. Alexander, 'The Cost of Labor Turnover', p.270.
36. Alexander, 'Hiring and Firing', pp. 143-4.
37. Wren, Evolution.
38. H. Eilburt, 'The Development of Personnel Management in the US', Business History Review, Vol.33 (1959), pp.345-64. Wren in his Evolution reaches a similar conclusion but does not explore the impact of the labour turnover issue.
39. Eilburt, 'Personnel Management', p.356.
40. Jacoby, Employing Bureaucracy, p. 126;
41. Wren, Evolution;
42. Eilburt, 'Personnel Management'.
43. B.E. Kaufman, 'The Case for the Company Union', Labor History, Vol.41 (2000), p.327.
44. I. McGivering, 'The Development of Personnel Management', in A. Tillett, T. Kempner and G. Wills (eds), Management Thinker (London, 1970).
45. Another excellent discussion of the historical development of personnel management in the UK can be found in M.M. Niven, Personnel Management, 1913-1916 (London, 1967).
46. Eilburt, 'Personnel Management';
47. Guillen, Models of Management, pp.2-3.
48. Jacoby, Employing Bureaucracy, pp. 123-4.
49. Ibid., p.124.
50. Ibid., p.128.
51. E. S. O'Connor, 'The Politics of Management Thought: A Case Study of the Harvard Business School and the Human Relations School', Academy of Management Review, Vol.24 (1999), pp. 117-31.
52. Guillen, Models of Management, p.58.
53. Kaufman, 'Personnel/Human Resource Management';
54. idem, 'Human Resource and Industrial Relations: Commonalities and Differences', Human Resource Management Review, Vol.11 (2001), pp.339-74;
55. idem, 'The Theory and Practice of Strategic HRM and Participative Management: Antecedents in Early Industrial Relations', Human Resource Management Review, Vol.11 (2001), pp.505-33.
56. Kaufman, 'Personnel/Human Resource Management'.
57. Person was also a long-time managing director of the Taylor Society, an organisation dedicated to furthering the philosophy of Frederick Winslow Taylor, and which still exists in the guise of the Society for the Advancement of Management.
58. E.M. Hopkins, 'A Functionalized Employment Department as a Factor in Industrial Efficiency', Annals, Vol.61 (1915), pp. 112, 116; emphasis added.
59. J. Willits, 'The Labor Turnover and the Humanizing of Industry', Annals, Vol.61 (1915), p. 127. Incidentally, Willits played a key role in sponsoring Elton Mayo's early studies in Philadelphia factories.
60. Ibid., pp. 134-5, emphasis added.
61. R. Feiss, 'Scientific Management applied to the Steadying of Employment, and its Effect in an Industrial Establishment', Annals, Vol.61 (1915), p.103.
62. Feiss, 'Scientific Management', p. 111.
63. E.F. Nichols, 'The Employment Manager', Annals, Vol.65 (1916), pp.1-8.
64. W.C. Redfield, 'The Employment Problem in Industry', Annals, Vol.65 (1916), pp.9-14.
65. E.M. Hopkins, 'Advantages of Centralized Employment', Annals, Vol.65 (1917), p.2.
66. B. Fisher, 'How to Reduce Labour Turnover', Annals, Vol.65 (1917), pp. 10-32.
67. 'Making the Boss More Efficient', Survey, Vol.38 (1917), pp.211-15,
68. reprinted in Bloomfield (ed.), Employment Management, p.42.
69. P. Douglas, 'The Problem of Labour Turnover', American Economic Review, Vol.8 (1918), p.315.
70. S. Slichter, 'The Management of Labour', Journal of Political Economy, Vol.27 (1919), p.823.
71. Ibid., pp.818-20.
72. P. Douglas, 'Plant Administration of Labour', Journal of Political Economy, Vol.27 (1919), pp.546-8, 551.
73. L.C. Marshall, 'Incentive and Output: A Statement of the Place of the Personnel Manager in Modern Industry', Journal of Political Economy, Vol.28 (1920), pp.718-20.
74. Ibid., p.728.
75. He also contributed a more technical discussion of measuring labour turnover in the same journal a couple of months later, 'The Scope and Nature of the Labour Turnover Problem', Quarterly Journal of Economics, Vol.34 (1920), pp.329-45.
76. S. Slichter, 'Industrial Morale', Quarterly Journal of Economics, Vol.35 (1920), p.57.
77. P. Douglas, 'Personnel Problems and the Business Cycle', Administration, Vol.4 (1922), p.16; emphasis added.
78. Ibid., p. 16.
79. K. Bruce and C. Nyland, 'Scientific Management, Institutionalism and Business Stabilization: 1903-1923', Journal of Economic Issues, Vol.35 (2001), pp. 1-24.
80. Still trading today as Avery-Dennison, a Fortune-500 company.
81. Dennison, in a career spanning some 50 years, was a devoted exponent of scientific management, a pioneer advocate of unemployment insurance and personnel management, and a leading corporate liberal of the inter-war period. He was a one-time president of the Taylor Society (1919-21), devoted to the philosophy of Frederick W. Taylor; his company, was the first in US corporate history to introduce private unemployment insurance in 1916; he was an economic adviser to the Wilson, Hoover and Roosevelt administrations; and he lectured at the Harvard Business School and was active in Harvard academic life, maintaining firm contacts with his friends Edwin Gay in the Business School, Felix Frankfurter in the Law School, and John Kenneth Galbraith in the Department of Economics. A lengthy discussion of Dennison's contributions to economic and management thought can be found in K. Bruce, 'Activist Management: The Institutional Economics of Henry S. Dennison' (unpublished Ph.D. dissertation, University of Wollongong, 1999).
82. It should be noted, however, that no mention was made of employee participation in areas of broader managerial interest, and consequently management continued to exercise an oligarchic bold over company policy.
83. For instance, Paul Douglas in 'The Problem' in 1918 discussed the DMC's employment department and its role in reducing labour turnover; in 1919, in ' The Management', Sumner Slichter widely cited the Dennison experience when he published his doctoral thesis on labour turnover; the British labour economist P. Sargant Florence, in his Economics of Fatigue and Unrest (London, 1924), cited the DMC's efforts to reduce labour turnover;
84. and monographs by Furniss and Gould, Labor Problems: A Book of Materials for their Study (Boston, 1925),
85. and by Douglas and Director, The Problem of Unemployment (New York, 1931), drew heavily upon Dennison's practice to combat cyclical unemployment.
86. A deeper discussion of these issues can be found in K. Bruce, 'Early Labor Economics: Its Links to Applied Management', Advances in Industrial and Labor Relations (unpublished mimeo, 2004).
87. B.E. Kaufman, The Origins and Evolution of the Field of Industrial Relations in the United States (Ithaca, NY, 1993);
88. P.H. Admiraal (ed.), The Corporate Triangle. the Structure and Performance of Corporate Systems in a Global Economy (Oxford, 1997);
89. S. Fraser, Labor Will Rule: Sidney Hillman and the Rise of American Labor (Ithaca, NY, 1991).
90. H.S. Dennison, 'The President's Industrial Conference of October 1919', Bulletin of the Taylor Society, Vol.5 (1920), pp.79-83.
91. P. Douglas, 'Shop Committees: Substitutes for, or Supplement to, Trade Unions?., Journal of Political Economy, Vol.29 (192 1), p. 107.
92. Who knew Dennison via their respective memberships of the Taylor Society and the American Association for Labor Legislation.
93. H.R. Seager, 'Company Unions vs. Trade Unions', American Economic Review, Vol. 13 (1923), pp. 1-13.
94. Slichter, 'The Management', p.823.
95. Douglas, 'The Problem', pp.546-8, 551.
96. J.R. Commons, R.W. Wissler and A. Haake, Industrial Government (New York, 1921), pp.vi-vii.
97. A. Gruchy, Modern Economic Thought: The American Contribution (New York, 1947), p. 174.
98. J.R. Commons, Industrial Goodwill (New York, 1919), pp. 19-20.
99. Gruchy 'Modern Economic Thought', p.182.
100. J.R. Commons, Institutional Economics: Its Place in Political Economy (Madison, 1934 [1959]), pp.671-2.
101. Ibid., p.672.
102. K. Bruce, 'Strategic Reconceptualizations of the Costs of Labour Turnover' (unpublished mimeo, 2004).
103. I b i d.