PROFIT SHARING.

Dominion, Volume 7, Issue 1947, 2 January 1914, Page 5

PROFIT SHARING.

NO GRATUITY OR GIFT. „ ONLY SOUND BASIS. SIR WILLIAM LEVER'S IDEAS, "I have carefully studied the question of profit-sharing. It will be 25 years ■next spring since I made my first speech oti .it in 1889, and I am still an advocate of it, stronger than evw," 'J'iia foregoing statement'was made by Sir William Lever, of 'Lever Brothers, tho firm who have practised profit'sharinjj with such success at their works at Port Sunlight, and the statement was made in reply to an inquiry' by a Dominion iuwrvioiver.

. 'I approach the subject in this Way," said Sir William; "it is entirely a question of the relationship in which all those engaged in an industry ought to hear to oiio another, and to the profits which their united exertion ..may ha ''ii J:° l )r< -' ,( bice. I think it would generally be admitted that at tins beginning ot any year in any industry, be it manuor agriculture, it is impossible to say' whether the year will be a jood one or a bad one, what tiio profits will be, irliethcr there will be any profits. or whehor there will be a Joss. Therefore, in consgcocnce of tins uncertainty, .it is obvious that a wags system must bo the basis of tho relationship bchvecjt employer and employed, .or. as: I prefer to say it, between management and labour. The worker cannot live without his wage, and thoro must be a rate'for labour, just as there must be a fixed i.wt crest for capital. ■'At the end of the year there mav hayo been a profit, above those rates". Labour may have produced more than it received, anil capital mav •have produced more. This cannot be ascertained until thp end of the year, when the accounts arc iii-ade .up., Tho basis of my idea that, if at the end of tho year there is a loss shown, tho bearing of that loss must fall; and rightly fnlC Upon those who had. the. niniwgonieiit of the. undertaking. 7'ho iH'iee, that is to be paid for management or control, carries with it the responsibility for tearing losses. Of course from that many argue that it must also carry with it the right to take all tho. profits. And 1 think you will agree'thai what 'Labour, in effect, says to €aj:iital -wlieh" 1 - it- engages itself is: 'Guarantee mc- my weekly wage, or monthly, or quarterly., safer?. I can't live without it. ■ 1.1 ijiejii are anv profits in this, business they ;fre' yours, if there are any losses, yon will have to bear them.' . : ' ;, . ~ Closer Community of interest. "Before, therefore, proper sharing can become an expansion or development to assist tho worker from the position of wage-drawer to that of profitsharer there must be a closer coiumnn!tv «1 interest between Labour, and tho management that directs Labour. It is not reasonable to expect men to gjvn inore than a mechanical performance, of' duties unless they have an interest in tho results. .It is impossible to ask Labour to bo interested iu flic losses of a business, unless you .say to Labour, 'lou shall share with the management .in the direction of tho industry.' But it does seem to nie to tin 'air, and wise, and prudent, and logical that a cbinmuiiity of interest should he..treated by which tho mimageiiifiit can say to Labour; 'It is true that I pay you ■ a i,-.salary for the-- porformar.co oi certain duties, but if you take a keener interest ... in tlw business, and in , its development, and a^ keener interest-in tho. performance of tho dirties you have undertaken, then lot-us share, tho .profits that may result, notwithstanding the fact that if there are Josses you caiinot sham them with us,' _ On tho'.-e lines I feel that profit-sharing brings about ilia close relationship that used to exist centuries ago- in all industries' when they wore small, between master- and. man as tlwy wero then called. They worked togetjtor in one room, knew each other, and cadi had a lull nn-derstand-ing of every job undertaken—just tho ,samo conditions as appl.v in a viliagn smithy nowadays. In big industries that spirit ought to ho encouraged. and it can be encouraged only under a system in which the employer says to tliosn who nro employed, 'If this business by your efforts and my efforts results in a profit, you share on ii perfectly fair foot' ing with mo in' those profits.'

A Manly Relationship. "'That is the independent unci manly relationsliip that must exist betwoan employer and employed. . It make? t!w employee manly and independent. Ilu is not accepting a gratuity or a present, luit merely in a perfectly honourable, straightforward way with i.iiß

wnployer in the profits thoir joint labour, industry, intelligence, and skii! iiavo created.. The effect of profit-Shar-ing ought- to be increased eilieiwicy, and tli» profits siia.ml would be in a great measure tlic result of greater efficiency. They , are not 'Something added to the post of the nrtielo Which the consumer has to pay. 'They are not smiic-thm!; taken from the employer, but (he.v lire something jointly created, by th" intelligence of both parlies in the .industrial system , in wiifoli they can eiinre, in th« veal spirit of true worfsinon. If it ivero otherwise', -thoii- an.V' employer sharing profits with his workpeople, in addition to paying wages, would merely be adding to the. cost <}f product rait in his industry, and would find himself si; handicapped in composing with, others who did not share profits that ultimately, sooner rather t'hftn later, he would find liimsclf driven out of the field On tho other hand, under a, succcssfiil system of proiat sharing, tho greater and teener interest of tho workers gives stability and pcrmanence to an industry, and gives it-'power and strength to meet any competition. '1 havo tho (strongest faith in profit slwriiig on those lines, but as a gift or present from employer to workman it wotild ho a.delnsioii'aiid a snare, degrading to the worknian awl ruinous to tho emp10yer."....;...- .... ....