Profit improvement as a way of thinking was being reflected by the widest range of plant workers, clerical employees, and field personnel. "Everyone's much more cost conscious," observed a machine shop foreman. In an assembly section, workers who had almost convinced management they needed new floor mats then reversed themselves, suggesting that the company have the old ones repaired and "save the difference." A business office suggestion that coolant oil for factory automatics be bought by the tank truck load instead of in drums was parlayed by a machine operator and his boss into an efficient oil pipe system to feed all machines.
From an office girl in the field came the sound thinking that eliminated an entire set of manuals formerly kept up to date by each branch and, incidentally, won her a hefty suggestion system award. In the plant, small parts and pieces began to take on a new monetary value. "You never see a dropped part kicked around anymore," said an employee representative of a labor management committee. "Even the sweepers pick them up," he added.
Quality control workers suggested that their "warm up" time before labor management meetings be cut from 30 to 15 minutes. One inspector asked for a second bench so that he wouldn't have to interrupt a big setup when a rush "first piece" came along. "And when there's a lull," he said, "it'll give me a place to sort out my work."
Offering his idea in exchange for the chance to work it out on company time, a grinder asked for and got two weeks in which he developed an improved deducting compound.
Some suggestions were so severe and out of line with PB's liberal employee policy that they had to be rejected. One, for example, proposed that a company nurse checks up regularly on those receiving sick pay. "We'll have no Gestapo," was the answer, in effect.
Gripes from workers began to take on a new note as they countered a management policy or decision with the question, "What's that going to do to our profit?"
"Maybe one of the best things about this campaign," said an executive, "is the fact that it puts management on its toes and gives employees a chance to take a crack at our errors. Workers are certainly more alert to what we are doing and, when we pull a boner, they have the satisfaction of disagreeing from a better informed point of view."
As the program progressed, it was clear that the financial statement, which is part of each quarterly letter sent to employees' homes, was making more and more sense to more and more employees.
Impressive further evidence of what the campaign had done to employee thinking came at the 1954 round of annual jobholder meetings, where the caliber and quantity of questions revealed an unprecedented awareness of economic fundamentals.
By products of the program were reflected in interviews with job applicants, who frequently "played back" community attitudes toward current policy and employee benefits. "You'd be surprised," said a Pitney Bowes personnel man, "at the number of outside people, mostly wage earners, who are watching our progress and following our stock on the market."
By mid 1954, the adverse profit trend had been checked and reversed, and Wheeler could confidently say "the worst is past."
"We're on the threshold of what can be a period of outstanding gains," he said. "The worry, hard work, and sweat all of us have put in will begin to show substantial results if we continue to hold the line on expenses and push sales in every way we can."
Third quarter profit before taxes was up 50 per cent, the net was 86 per cent above the same period in 1953, and the cash profit sharing rate was more than double what it had been earlier.
With three months to go, Wheeler said "I know this is going to be a year we'll be proud of in every respect."
Year end figures showed the goal had been reached, with the margin of profit before taxes restored to its 1951 level of 17.4 per cent, and the net profit margin thanks to removal of the excess profits tax was back up to 8.4, within striking distance of the 9 to 10 per cent the management had often set as its objective for a specialty business like PB's. Cash profit sharing was nearly back to the normal rate for most years.
In the opening words of PB's 35th annual report to stockholders, Wheeler said: "The operating results of 1954 were the best in our history, with new sales, gross income, operating profit, and per share earnings all reaching new high levels.
"These results are gratifying because they were achieved during a period when the country's general economy was not expanding, and were largely the result of a company wide program of improved efficiency which received the enthusiastic and effective support of our whole organization."
As Pitney Bowes continued its momentum in the succeeding years, Wheeler made these comments on the company's profit improvement experience in a 1956 address: After the "bad year" he said, employees should have lost interest, if the critics of profit sharing were to be believed.
"Actually," he said, "I have never seen a group of people work harder or with more dedicated interest than our people did to reverse the trend. What is more, our employees are determined to do even better, and I believe they will,"
In the modern concept of employee relations the accent is on mutual participation by all members of an enterprise. It has become apparent that productivity is neither an isolated element of management's function nor an enemy of employees. This is particularly evident when productivity programs arc punctuated by recognition of the individual, and when the benefits are spread through the organization.
Three axioms seem to emerge from studies of goals and vehicles in the employer employee relationship.
- The beneficiaries of a system are its stoutest defenders.
- Productivity links directly to morale.
- Free flowing communications and mutual participation are common denominators in employee morale.
Recruiting and Indoctrination:
To focus public attention on nursing as a career, the South Carolina Hospital Association sponsored the selection of "Miss Student Nurse of South Carolina." The selected student received a prize of $500 and was dispatched on a tour of the state to address high school students. The costs were shared with S.C.H.A. by Blue Cross and Blue Shield.
