Letters from an old railway official/Letter 20
LETTER XX.
HANDLING THE PAY ROLL.
July 31, 1904.
My Dear Boy:—I have your letter about the supply train. Please do not fail to consider that it is an inspection and administrative train as well as a traveling storehouse. The term company train perhaps comes the nearest to a comprehensive designation. As a tentative proposition, to be modified by experience, I think I would distribute one-half of the expense of the train to supply, the other half to inspection and consider both halves as money well spent. With the enormous growth of business, with the increasing expansion of systems, we have had to leave more and more to departments. The result is that each department becomes more and more forgetful of the others. It isn’t enough to have the heads at the general offices take lunch together. We must begin farther down in our administration to keep our departments in touch. Representatives of the traffic department should accompany the train and distribute their own advertising matter. Perhaps the best feature of all would be the improved feeling among the country agents due to more intimate acquaintance with the operating and traffic officials with whom they are doing business. We can afford to compete with the organizers of the telegraphers and clerks for this spirit. It will interest you to know that at least two large systems are figuring on a company train. When it comes, as come it will, we shall all wonder, as in the case of the telephone, how we ever got along without it.
You ask if the pay car should be included in the outfit. Yes, if local conditions permit. Before going into this very far, however, let us consider our system of paying only once a month. Has it sufficient merit to stand the test of time? It breaks down in some cases when we wish additional cheap labor. Many of us have turned over to contractors the unloading of company coal at fuel stations. The avowed reason for so doing is that the shovelers being often recruited from the hobo or the squalid class, we cannot hope to handle them as well as a contractor who pays daily or weekly. Right down the track a little way our agent is remitting company money which is not earning any interest. Another reason given is that our officials are too far away to give the coal wharves proper supervision. As a matter of fact the official is on hand about as frequently as the contractor. This is a sad commentary on the versatility and elasticity of our organization. Before throwing money to the contractors why not give our section foreman or our agent a bonus for supervising the coal heavers? Let our men be a little interchangeable. If a man becomes worn out from too much sun on the track, let the breeze blow through his whiskers in the coal shed for a few weeks. No, I do not think the track would suffer if the section foreman had to put the fear of the Lord in another gang of men. The old-time section foreman had ingenuity and originality enough to do many things. His prototype of to-day may be dwarfed by over-specialization. When we treat our men less like machines we can subdivide gangs and still get results.
Nearly every winter a bill is introduced in some legislature requiring corporations to pay their men at least twice a month. Railroads at once get busy and manage to be exempted from the provisions of these measures. Such resistance is based on a variety of arguments, the vastness of territory covered, the large number of men employed, the necessity for careful auditing, etc. How long we can hold out against the spirit of the age is a question. Why not keep ahead of the game and lead public opinion? At such times we become very solicitous of the thriftiness of our men. We claim that we are their benefactors; that by paying them so much money at one time we are helping them to save. As a matter of fact people who have studied such questions tell us that when payments are frequent less stuff is bought on credit and fewer bills are run. Savings banks find that, under certain conditions, men who are paid daily or weekly will put by more money than those who have a monthly pay day. It is an economic question, dependent more upon sociological conditions than upon railroad policy.
It is usually pretty good business sense to take advantage of trade discounts. Do you not think we could make better bargains with our men if we did not wait to pay them until we are six weeks in arrears? We pay them for only one month and are always in their debt. Every once in a while we lose a good man from the service because he is hard pressed and can raise money only by taking his time check.
The monthly payroll was adopted before bonding and surety companies revolutionized business methods. The theory is that the roll must be approved and audited before payment in order to insure accuracy and prevent fraud. Did you ever hear of a payroll being disapproved as such? No matter how unwise their employment, how injudicious the time put in, the men must be paid. We are under moral and legal obligations to pay for service performed. Did you ever hear of a padded payroll being caught in the auditor’s office? The man who stuffs the roll alters the data against which the auditor checks. The few arithmetical errors discovered do not justify the time consumed. Again, why should you send your general superintendent a payroll of names any more than you should send him copies of your train sheets? What difference should it make to him just how much each particular man worked? He should have a summary of results, totals, maxima, minima, averages, etc., just as the morning report gives him a summary of the train sheet. If he wants more detailed information, let him come to your office and examine the time books, just as he should occasionally go over your train sheets. He is furnished a car to travel for just such purposes.
Assuming the desirability for more frequent payments, the day, the trip, the piece, would seem the best unit. Railroads have comparatively few credit lists. The ability to force patrons to pay cash is a business asset, and should give us the benefits of a cash basis. Our present system of payments is slow and cumbrous. In our desire to guard every avenue to fraud we have gone too far and retarded administration. The bonding company gives us a check which should enable us, under a proper system of inspection, to have the timekeeper practically the paymaster. I confess that I have not yet been able to work out all the details to my own satisfaction. I have gone far enough, however, to be convinced that there are men in our business bright enough to solve the problem. When given proper attention it will be found that for the same or less expense we can pay daily, improve the service and render a better account of our stewardship to the stockholders.
An agent remits daily. Why not let him turn in as cash a receipt or a deduction to cover his own pay? If he can do this, it is an easy step to accept as cash the time slips of his force, of the operators and sectionmen at his station. The time slips of shopmen, roundhousemen, yardmen, trainmen, enginemen, etc., when countersigned by the proper chief clerk, should become cash at a certain designated agency or local bank. It might be found practicable to use a form of time slip similar to a postal note or a street car transfer which could be punched and then authenticated with a stamp. An advantage of this would be that these original data would be available for tabulation in electrical integrating machines in the auditor’s office. The plan followed in compiling statistics would be similar to that in use for many years in the census office in Washington.
Such a system of payment presupposes fewer checking clerks but more traveling auditors and inspectors. It does things first and talks about them afterward. It is predicated upon the belief that checks and balances must begin to work nearer the foundation, that true centralization of results demands a full measure of local autonomy.
Affectionately, your own
D. A. D.