CHAPTER NINETEEN
Is Personnel Management Bankrupt?
A FEW YEARS AGO I received the following letter from the president of a company: I employ 2,300 people mostly women doing unskilled assembly work. Please send me at your earliest convenience a suitable personnel policy and enclose a statement of your fee. For a long time I thought this letter a good, though unintentional, joke. But lately it has dawned on me that the laugh was really on me. My correspondent, I have come to suspect, is much like the child in Andersen’s story of “The Emperor’s New Clothes” who had the innocence to say out loud that the emperor was naked when everybody else was trying to pretend that he could see the ruler’s garments.
A good deal of what passes today for management of the human organization is mechanical in nature and might indeed be dispensed by mail. The two generally accepted concepts of managing the worker—Personnel Administration and Human Relations—see the task to be done as something one tacks onto a business. Personnel Administration concerns itself with activities and procedures: hiring people, paying them, training them. Human Relations, as the term is commonly used, concerns itself with employee satisfaction, with communication and with attitudes. Yet both approaches seem to agree that to manage worker and work does not seem to require any change in the way the business is being conducted. And the tools and concepts needed seem to apply equally to any business.
An indication that this may not be the right approach is the lack of progress, of new thinking and of new contributions in either Personnel Administration or Human Relations. There is no field in the entire area of management where so many people are so hard at work. Personnel departments are growing like Jack’s beanstalk; and every one contains some research men equipped with computers and Ph.D. degrees. In every university hundreds of people lecture, research and gather data in the field. Indeed, a raft of new disciplines has been created—industrial psychology, industrial sociology, industrial anthropology, industrial relations, personnel management and so forth. They all produce supposedly original dissertations. They produce books and hold meetings. There are dozens of magazines devoted to the field. And no self-respecting business organization, whether the Seedgrowers of America or the Sioux City Chamber of Commerce, would consider a convention complete without at least one talk on the management of people at work.
And what has been the result of all this activity, what has all this work by so many good, devoted, intelligent people produced?
Personnel Administration and Human Relations
Personnel Administration, as the term is commonly understood, began with World War I. It grew out of the recruiting, training and payment of vast masses of new workers in the war-production effort. World War I has been over for sixty years. Yet everything we know today about Personnel Administration was known by the early twenties, everything we practice now was practiced then. There have been refinements, but little else. Everything to be found in one of the big textbooks of today (save only the chapter on union relations) can be found, for instance, in the articles and papers Thomas Spates (one of the founding fathers of Personnel Administration) published in the early twenties. We have only poured on a heavy dressing of humanitarian rhetoric—the way a poor cook pours a brown starchy sauce on overcooked brussels sprouts.
There has been the same intellectual aridity in the field of Human Relations— though there is perhaps even more activity there. Human Relations, too, grew out of World War I; but it took a little longer to mature. It reached its bloom in the famous experiments conducted by Elton Mayo of Harvard and his associates around 1928—a half century ago—in the Hawthorne, Illinois, plant of the Western Electric Company (the manufacturing subsidiary of the Bell Telephone System). These experiments showed that social and psychological factors, the amount of attention workers receive, for instance, may have more to do with productivity than objective working conditions, e.g., lighting at the workplace, or pay. And the reports of the Harvard group on the work at Hawthorne are still the best, the most advanced and the most complete works on the subject. Indeed, it is debatable whether the many refinements added since by the labor of countless people in industry, labor unions and academic life have clarified or obscured the original insight.
Novelty is, of course, no argument for soundness. Still, it is most unlikely for any new discipline to emerge fully formed and perfected at its birth like Venus from the waves. It takes decades to build the edifice on the foundations laid by the first thinkers in the field. That two new disciplines should have been blessed with full maturity at their birth is altogether improbable. Perhaps the reason that there has been so little building on the foundations of Personnel Administration and Human Relations is that the foundations themselves were inadequate.
A Survey of Recent Personnel Administration
The limitations of Personnel Administration are not hard to perceive. They are indeed admitted by most of the people in the field—at least by implication. The constant worry of all personnel administrators is their inability to prove that they are making a contribution to the enterprise. Their preoccupation is with the search for a “gimmick” that will impress their management associates. Their persistent complaint is that they lack status. For personnel administration— using the term in its common usage—is largely a collection of incidental techniques without much internal cohesion. Some wit once said maliciously that it puts together and calls “personnel management” all those things that do not deal with the work of people and that are not management.
There is, unfortunately, some justice to the gibe. As personnel administration conceives the job of managing worker and work, it is partly a file clerk’s job, partly a housekeeping job, partly a social worker’s job and partly “fire-fighting” to head off union trouble or to settle it. The things the personnel administrator is typically responsible for—safety and pension plans, the suggestion system, the employment office and union grievances—are necessary chores. They are mostly unpleasant chores. I doubt, though, that they should be put together in one department; for they are a hodgepodge, as one look at the organization chart of the typical personnel department, or at the table of contents of the typical textbook on personnel management, will show. They are neither one function by kinship of skills required to carry the activities, nor are they one function by being linked together in the work process, by forming a distinct stage in the work of the manager or in the process of the business.
None of these activities is in itself of such a nature as to call for more than moderate capacity in its management. None by itself has a major impact upon the business. Putting a great many of these activities together in one function does not produce a major function entitled to representation in top management or requiring the services of a top executive. For it is quality (that is, the kind of work and its impact upon the business) that alone makes a major function or defines the orbit of a senior executive.
Even if these things were best assembled into one department, they would not add up to managing people. They have indeed little to do with the job to be done in this area. Not only does the personnel department as a rule stay away from the management of the enterprise’s most important human resource, managers, it also generally avoids the two most important areas in the management of workers: the organization of the work, and the organization of people to do the work. It accepts both as it finds them.
Three Misconceptions
The reason for the sterility of Personnel Administration is its three basic misconceptions. First it assumes that people do not want to work. Personnel Administration views “work as a kind of punishment that people must undergo in order to get satisfaction elsewhere.” It tends therefore to put emphasis on satisfactions outside and beyond the work. Secondly, Personnel Administration looks upon the management of worker and work as the job of a specialist rather than as part of the manager’s job. To be sure, there is constant talk in all personnel departments of the need to educate operating managers in managing people. But 90 percent of the budget, manpower and effort is devoted to personnel programs, thought up, established and operated by the personnel deparment. The typical textbook of Personnel Administration starts out by saying that the two first jobs of the personnel administrator are to advise operating management and to diagnose the stability or morale of the organization as an effective team. But then it spends 95 percent of its pages on the programs that the department itself organizes and manages.
This means, in effect, either that personnel administration has to usurp the functions and responsibility of the operating manager (since whoever manages the people under the operating manager is the “boss,” whatever his or her title); or else it means that operating managers, in self-defense, have to confine personnel administration to the handling of incidental chores, that is, to those things that are not essential to the management of worker and work. It is not surprising that the latter has been the all but universal trend.
Finally, Personnel Administration tends to be “fire-fighting,” to see “personnel” as concerned with “problems” and “headaches” that threaten the otherwise smooth and unruffled course of production. It was born with this tendency. But the unionization drives of the thirties have made it dominant. It is not too much to say that many personnel administrators, though mostly subconsciously, have a stake in trouble. Indeed, there was some truth in the joking remark made by a union leader about the personnel department of a big company: “Those fellows ought to kick back 10 percent of their salaries into the union treasury; but for the union they’d still be hundred-dollars-a-week clerks.” But worker and work simply cannot be managed if trouble is the focus. It is not even enough to make “fire prevention” rather than “fire-fighting” the focus; managing worker and work must focus on the positive and must build on underlying strength and harmony.
The Insight of Human Relations—and Its Limitations
Human Relations, the second prevailing theory of the management of worker and work, starts out with the right basic concepts: people want to work; and managing people is the manager’s job, not that of a specialist. It is therefore not just a collection of unrelated activities. It also rests on a profound insight—the insight summarized when we say that “one cannot hire a hand; the whole person always comes with it.”
Human Relations recognizes that the human resource is a specific resource. It emphasizes this against mechanistic concepts of the human being, against the belief in the “slot-machine people” who respond only and automatically to monetary stimulus. It has made American management aware of the fact that the human resource requires definite attitudes and methods, which is a tremendous contribution. Human Relations, when first developed, was one of the great liberating forces, knocking off blinkers that management had been wearing for a century.
Yet Human Relations is, at least in the form in which it exists thus far, primarily a negative contribution. It freed management from the domination of viciously wrong ideas; but it did not succeed in substituting new concepts.
One reason is the belief in “spontaneous motivation.” “Remove fear,” the Human Relations people seem to say, “and people will work.” This was a tremendous contribution at a time when management still felt that people could be motivated only through fear. Even more important was the implied attack on the assumption that people do not want to work. Yet, absence of wrong motivation, we have learned, is not enough. And on positive motivations Human Relations offers little but generalities.
Human Relations also lacks an adequate focus on work. Positive motivations must have their center in work and job, yet, Human Relations puts all the stress on interpersonal relations and on the “informal group.” Its starting point was in individual psychology rather than in an analysis of worker and work. As a result, it assumes that it is immaterial what kind of work a person does since it is a worker’s relationship to co-workers that determines his or her attitude, behavior and effectiveness.
Its favorite saying, that “the happy worker is an efficient and a productive worker,” though a neat epigram, is at best a half truth. It is not the business of the enterprise to create happiness but to sell and make shoes. Nor can the worker be happy in the abstract.
Despite its emphasis on the social nature of people, Human Relations refuses to accept the fact that organized groups are not just the extension of individuals but have their own relationships, involving a real and healthy problem of power, and conflicts which are not conflicts of personalities but objective conflicts of vision and interests; that, in other words, there is a political sphere. This shows in the almost panicky fear of the labor union that runs through the entire work of the original Human Relations school at Harvard University.
Finally, Human Relations lacks any awareness of the economic dimension of the problem.
As a result, there is a tendency for Human Relations to degenerate into mere slogans which become an alibi for having no management policy in respect to the human organization. Worse still, because Human Relations started out from the attempt to adjust the “maladjusted” individual to the “reality” (which is always assumed to be rational and real), there is a strong manipulative tendency in the whole concept. With it there is the serious danger that Human Relations will degenerate into a new Freudian paternalism, a mere tool jor justifying management’s action, a device to “sell” whatever management is doing. It is no accident that there is so much talk in Human Relations about “giving workers a sense of responsibility” and so little about their responsibility, so much emphasis on their “feeling of importance” and so little on making them and their work important. Whenever we start out with the assumption that individuals have to be adjusted, we search for ways of controlling, manipulating, selling them—and we deny by implication that there may be anything in our own actions that needs adjustment. In fact, the popularity of Human Relations in this country today may reflect, above all, the ease with which it can be mistaken for a soothing syrup for irritable children, and misused to explain away as irrational and emotional resistance to management and to its policies.
This does not mean that we have to discard Human Relations. On the contrary, its insights are a major foundation in managing the human organization. But it is not the building. Indeed, it is only one of the foundations. The remainder of the edifice has still to be built. It will rest on more than Human Relations. It will also have to rise well above it.
“Scientific Management”—Our Most Widely Practiced Personnel-Management Concept
Personnel Administration and Human Relations are the things talked about and written about whenever the management of worker and work is being discussed. They are the things the Personnel Department concerns itself with. But they are not the concepts that underlie the actual management of worker and work in American industry. This concept is Scientific Management. Scientific Management focuses on the work. Its core is the organized study of work, the analysis of work into its simplest elements and the systematic improvement of the worker’s performance of each of these elements. Scientific Management has both basic concepts and easily applicable tools and techniques. And it has no difficulty proving the contribution it makes; its results in the form of higher output are visible and readily measurable.
Indeed, Scientific Management is all but a systematic philosophy of worker and work. Altogether it may well be one of the most powerful and lasting contributions America has made to Western thought. As long as industrial society endures, we shall never lose again the insight that human work can be studied systematically, can be analyzed, can be improved by work on its elementary parts.
Like all great insights, it was simplicity itself. People had worked for thousands of years. They had talked about improving work all that time. But few people had ever looked at human work systematically until Frederick W. Taylor started to do so around 1885. Work was taken for granted; and it is an axiom that one never sees what one takes for granted. Scientific Management was thus one of the great liberating, pioneering insights. Without it a real study of human beings at work would be impossible. Without it we could never, in managing worker and work, go beyond good intentions, exhortations or the “speed up.” Although its conclusions have proved dubious, its basic insight is a necessary foundation for thought and work in the field.
Scientific Management has been stagnant for a long time. It is the oldest of our three approaches to the management of worker and work; it rose together with the new profession of engineering in the last decades of the nineteenth century. It also ran dry first. From 1890 to 1920 Scientific Management produced one brilliant new insight after the other and one creative new thinker after the other—Taylor, Fayol, Gantt, the Gilbreths. During the last fifty or sixty years, it has given us little but pedestrian and wearisome tomes on the techniques, if not on the gadgets, of narrower and narrower specialties. There are, of course, exceptions—especially Mrs. Lillian Gilbreth and the late Harry Hopf. But on the whole there have been oceans of paper but few, if any, new insights. There has been a great deal of refinement; yet the most mature and most cogent statement on Scientific Management is still the testimony Taylor gave before a Special Committee of the House of Representatives in 1912.
The reason for this is that Scientific Management, despite all its worldly success, has not succeeded in solving the problem of managing worker and work. As so often happens in the history of ideas, its insight is only half an insight. It has two blind spots, one engineering and one philosophical. What it does not see is as important as what it does see; indeed, if we do not learn to see where Scientific Management has been blind, we may lose even the benefit of its genuine vision.
Confusing Analysis with Action: A Blind Spot
The first of these blind spots is the belief that because we must analyze work into its simplest constituent motions we must also organize it as a series of individual motions, each if possible carried out by an individual worker. It is possible that Taylor himself saw the need to integrate; Harry Hopf certainly did. But practically all other writers—and all practitioners—see in the individual motion the essence of good work organization.
This is false logic. It confuses a principle of analysis with a principle of action. To take apart and to put together are different things. To confuse the two is grossly unscientific. For the beginning of science is the realization that classification, while absolutely necessary, does not tell us any important fact about the nature of the thing classified.
The belief that work is best performed as it is analyzed is also wretched engineering.
The best proof of this is in the greatest achievement resulting from the application of the concepts that underlie Scientific Management: the alphabet. Its inventor, an anonymous clerk in a long-forgotten Semitic trading town, 3,500 years ago, will never be awarded the Gold Medal of the International Management Congress. But his analysis of the basic, simple and standardized elements that underlay the thousands of pictograms, ideograms, logograms, syllable signs and phonetic marks of the writing of his day, and their replacement by two dozen signs capable of expressing all sounds and of conveying all words and thoughts, was straight Scientific Management—of the highest order. Yet, the alphabet would not only be totally useless—it would be a complete barrier to communication—were we expected to say “Cee-Ay-Tee,” when we wanted to say “cat,” just because we spell the word with these three letters.
The job of integrating letters into words is not a simple one. Even retarded children can usually learn the letters, but even a bright one has difficulty making the jump from Cee-Ay-Tee to cat. Indeed, practically all reading difficulties of children (the biggest problem of elementary education) are problems of integrating letters into words; many people, we know, never learn to do that but learn instead to recognize common words and syllables—they learn pictograms and ideograms rather than letters. And yet the alphabet not only triumphed despite the difficulty of integration. It is the integration that is its triumph and its real achievement.
Finally, the confusion between analysis of work and action in work is a misunderstanding of the properties of the human resource. Scientific Management purports to organize human work. But it assumes—without any attempt to test or to verify the assumption—that the human being is a machine tool (though a poorly designed one.)
It is perfectly true that we have to analyze the work into its constituent motions. It is true that we can best improve work by improving the way the individual operations are performed. But it is simply not true that the closer the work comes to confining itself to the individual motion or operation, the better the human being will perform it. This is not even true of a machine tool; to assert it of human beings is nonsense. The human being does individual motions poorly; viewed as a machine tool, a human is badly designed. Let us leave aside all such considerations as a person’s will, personality, emotions, appetites and soul. Let us look at people only as a productive resource and only from the point of view of engineers concerned with input and output. We have no choice but to accept the fact that the specific contribution of people is always to perform many motions to integrate, to balance, to control, to measure, to judge. The individual operations must indeed be analyzed, studied and improved. But the human resource will be utilized productively only if a job is being formed out of the operations, a job that puts to work the specific qualities of people.
Planning Divorced from Doing: The Other Blind Spot
The second blind spot of Scientific Management is the “divorce of planning from doing”—one of its cardinal tenets. Again a sound analytical principle is being mistaken for a principle of action. But in addition the divorce of planning from doing reflects a dubious and dangerous philosophical concept of an elite which has a monopoly on esoteric knowledge entitling it to manipulate the unwashed peasantry.
To have discovered that planning is different from doing was one of Taylor’s most valuable insights. To emphasize that the work will become the easier, more effective, more productive, the more we plan before we do, was a greater contribution to America’s industrial rise than stopwatch or time-and-motion study. On it rests the entire structure of modern management. That we are able today to speak seriously and with meaning of management by objectives is a direct result of Taylor’s discovery of planning as a separate part of the job, and of his emphasis on its importance.
But it does not follow from the separation of planning and doing in the analysis of work that the planner and the doer should be two different people. It does not follow that the industrial world should be divided into two classes of people; a few who decide what is to be done, design the job, set the pace, rhythm and motions, and order others about; and the many who do what and as they are being told.
Planning and doing are separate parts of the same job; they are not separate jobs. There is no work that can be performed effectively unless it contains elements of both. One cannot plan exclusively all the time. There must be at least a trace of doing in one’s job. Otherwise one dreams rather than performs. One cannot, above all do only; without a trace of planning his or her job, the worker does not have the control needed even for the most mechanical and repetitive routine chore. Advocating the divorce of the two is like demanding that swallowing food and digesting it be carried on in separate bodies. To be understood, the two processes have to be studied separately. They require different organs, are subject to different ailments and are carried out in different parts of the body. But to be nourished at all, the same body needs both, just as a job must contain planning as well as doing.
Taylor’s divorce of planning from doing was both specifically American and specifically late nineteenth century. It is a descendant of our oldest tradition: the New England theocracy of the early Puritans. It puts the priestly-elite concept of Increase and Cotton Mather into modern dress, but leaves it otherwise almost unchanged; and like the Puritan divines Taylor deduced a God-given right of the planning elite to rule. It is no accident that we hear this right to rule described today as the “prerogative of management”—the term has always been applied to right by divine or priestly anointment.
But the divorce of planning and doing was also part of the elite philosophy that swept the Western World in the generation between Nietzsche and World War I—the philosophy that has produced such monster offspring in our time. Taylor belongs with Sorel, Lenin and Pareto. This movement is usually considered to have been anti-democratic. It was—in intent and direction—fully as much anti-aristocratic. For the assertion that power is grounded in technical competence—be it for revolutionary conspiracy or for management—is as hostile to aristocracy as to democracy. Both oppose to it the same absolute principle: power must be grounded in moral responsibility; anything else is tyranny and usurpation.
The divorce of planning from doing deprives us of the full benefit of the insights of Scientific Management. It sharply cuts down the yield to be obtained from the analysis of work, and especially the yield to be obtained from planning. We have seen cases where productivity greatly increased when the workers were given responsibility for planning their work. The same increase in productivity (not to mention the improvement in worker attitude and pride) has been obtained wherever we have combined the divorce of planning from doing with the marriage of the planner to doer.
The Blind Spots Explain Resistance to Change
The two blind spots of traditional Scientific Management explain why its application always increases workers’ resistance to change. Because they are being taught individual motions rather than given a job, their ability to unlearn is stifled rather than developed. They acquire experience and habit rather than knowledge and understanding. Because workers are supposed to do rather than to know—let alone to plan—every change represents the challenge of the incomprehensible and therefore threatens their psychological security.
It is an old criticism of Scientific Management that it can set up a job so as to get the most output per hour but not so as to get the most output over five hundred hours. It may be a much more serious and better-founded criticism that it knows how to organize the present job for maximum output but only by seriously impairing output in the worker’s next job. Of course, if the job were considered unchangeable, this would not matter. Henry Ford (one of the most thorough practitioners of Scientific Management, though he had never heard Taylor’s name) believed that once the putting on of a fender had been properly engineered, the job would remain unchanged in all eternity.
But we know that change is inevitable; it is, indeed, a major function of the enterprise to bring it about. We also know that the next few decades will bring tremendous changes—and nowhere more than in the worker’s job.
Scientific Management and the New Technology
The coming of the new technology converts what may have been considered limitations on the full effectiveness of Scientific Management into crippling diseases. Indeed the major problems of managing worker and work under the new technology will be to enable the worker to do a complete and integrated job and to do responsible planning.
Workers under Automation will no longer do the repetitive routine chores of machine feeding and materials handling. Instead, they will build, maintain and control machines that do the repetitive routine work. To do this they must be able to do many operations, must have the largest rather than the smallest content to their jobs, must be able to co-ordinate. This does not mean that they must be again manually skilled workers as the workers of yore. On the contrary, every one of the operations should be analyzed by means of Scientific Management to the point where they can be done by unskilled people. But the operations must be integrated again into a job—otherwise the work needed under Automation cannot be done. In the new technology we have no choice, but to say “cat.” We must learn how to put together—now that Scientific Management has taught us how to pull apart.
Similarly, we will not be able to organize worker and work in the new technology on the basis of the divorce of planning from doing. On the contrary, the new technology demands that the least production worker be capable of a good deal of planning. The more planning a worker can do and the more responsibility a worker can take for what he or she does, the more productive that worker will be. A worker who does only as instructed can do only harm. To maintain the equipment, to program it, to set it and to control it, all demand of the worker in the new technology knowledge, responsibility and decision-making—that is, planning. Our problem will not be that planning and doing are not divorced enough; it will be that many workers of tomorrow may have to be able to do more planning than a good many people who call themselves managers today are capable of.
We must preserve the fundamental insights of Scientific Management—just as we must preserve those of Human Relations. But we must go beyond the traditional application of Scientific Management, must learn to see where it has been blind. And the coming of the new technology makes this task doubly urgent.
Is Personnel Management Bankrupt?
Is Personnel Management bankrupt? asks the title of this chapter. We can now give the answer: “No, it is not bankrupt. Its liabilities do not exceed its assets. But it is certainly insolvent, certainly unable to honor, with the ready cash of performance, the promises of managing worker and work it so liberally makes. Its assets are great—the fundamental insights of Human Relations, the equally fundamental insights of Scientific Management. But these assets are frozen. There is also a lot of small stuff lying around in the form of Personnel Administration techniques and gadgets. But it does not help us too much in the big job of unfreezing the frozen assets, though it may produce enough saleable merchandise to pay the petty bills. Perhaps the biggest working capital is the things we have learned not to do; but what banker ever lent on such collateral?”
The facts permit, however, of a more optimistic interpretation. The last fifty years were years of minor refinements rather than of vigorous growth, of intellectual stagnation rather than of basic thinking. But everything points to a different picture for the years ahead. Technological change is forcing new thinking, new experimentation, new methods. The process has already begun. The relationship between workers and the kind of work they do, which traditional Human-Relations thinking pushed aside as almost irrelevant, is now being studied by the Human-Relations school. The problem of the organization of the job according to the properties of the human resource, rather than on the assumption of a person as a badly designed machine tool, is being given serious attention in the school of Scientific Management. And the practitioners are well ahead of the writers and theoreticians, and are already moving across the frontiers of the traditional concepts. At the very least we already know what we do know, what we don’t know and what we need to know about work, working, and workers.