#managementscience

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The First Five Year Plan- USSR

The first five year plan was created to start rapid and large-scale industrialisation across the USSR (1). The Supreme Council of the National Economy (VSKNH or Vesenka) became the main group for industrial planning, coordinating industrial branches and control of fulfilling plans. Vesenka made a contract with the Walter Polakov Company of New York City in 1929. The owner, Walter N. Polakov arrived in Russia in December 1929. His first assignment was a machine tool factory where over 5,000 workers were employed. He found there were many idle men and machines, excesses of some items and shortages of others in the storeroom, the factory floor cluttered with half-finished products, and the inspector’s table buried under piles of work. It was undoubtedly a chaotic environment.

He proposed the use of the Gantt Chart to improve scheduling and reduce inefficiencies. He was met with resistance at first because of the Russian’s mistrust of Western ideas. However a compromise was reached and he began with the storeroom. Polakov created a daily order of work chart for the storeroom as it was the most pressing problem in the building. He was so successful that he was allowed to create machine-record charts, man-record charts and progress-record charts for the entire factory. 

Under the direction of Vesenka, Polakov moved onto other assignments. It was reported that the Gantt Chart method had led to an annual savings of one million rubles in 1930, in the machine-tool plant, which also reported a 400% increase in output (2).

Construction of the Hoover Dam

In 1928, the construction of the Hoover Dam was authorised by Congress. The Black Canyon Area in Nevada and Arizona was chosen as the sight of construction. Construction began in 1931 and finished in 1936. At the height of the project, 5,251 workers were employed to build the structure. Temperatures often reached 49°C (3). A Gantt Chart was used to plan the construction of the Hoover Dam bypass. The first task marks a milestone in the project which is the start of designing. After design was completed, six separate yet overlapping projects were needed to complete the bypass. Projects were put in order to increase competition and quality, pairing industry capabilities with work requirements (4). The bypass, known as ‘The Mike O'Callaghan–Pat Tillman Memorial Bridge’ was opened to traffic in October 2010.

That's everything on Gantt Charts. I hope you enjoyed it as much as I did.

Signing off,

The Gantt Team

Daniel Roche, 16/11/2022

Reference

The Editors of Encyclopaedia Britannica, 2022, https://www.britannica.com/topic/Five-Year-Plans

Daniel A. Wren, 1980, https://www-jstor-org.elib.tcd.ie/stable/257800#metadata_info_tab_contents

Trevor English, 2020, https://www.engineersireland.ie/Covid-19-information-base/the-engineering-behind-the-hoover-dam#:~:text=In%201928%2C%20Congress%20authorized%20the,and%20was%20completed%20in%201936.

Where it originated from

Gantt combined the ideas of Halsey and Taylor to produce the Task and Bonus System. The bonus ranged somewhere between 25% and 50% of employees agreed wages regarding their tasks were completed within a given timeframe. Halsey’s idea consisted of giving a basic daily wage to employees while Taylor introduced lower wages for incomplete tasks. Fredrick Taylor created the idea that employees should only be paid if they meet the tasks that they are assigned. Inefficient employees had no place in Taylor’s organisations. Employees were paid a normal wage if they met their tasks while they were paid a lower wage if they didn’t meet their appointed tasks in Taylor’s system.

Fredrick Taylor

Gantt believed that Taylor’s system could be altered slightly as he didn’t think it was fair on slower workers. Gantt implemented the first bonus rate on the 18th of March 1901. This was after Taylor’s methods didn’t impact the workplace as what he expected. Taylor gave instruction cards to employees and implemented his idea of paying employees less if they fail to complete their tasks. This only increased production by a small percentage. Gantt’s strategy proved successful as output in Bethlehem Steel (the firm at which Taylor and Gantt were working at) increased significantly. Output jumped from an average of 1,959,130 pounds per month in 1901 to an average of 2,699,557 pounds per month in 1902. Gantt continued to use this system as it worked well. This was the beginning of a unique strategy in the workplace!!

By Samuel Gammell

References -

Taylor's Differential Piece-Rate Plan and Ganit's Task and Bonus Plans (yourarticlelibrary.com)

Henry Laurence Gantt – Leader in Industry by L.P. Alford

Henry Gantt comes from Scottish lineage. Thomas Gantt and his wife Mary Graham, a Scotswoman, emigrated to the colony of Maryland in 1660 and settled on a plantation known as ‘Myrtle Range’ in Prince George’s Country.

Henry Laurence Gantt, leader in industry, by L.P. Alford

Hello Readers, today we are going to be introducing Gantt’s Task and Bonus System. First, we are going to look at what it actually is…

What it is -

The Task and Bonus system was designed by Henry Gantt to encourage more productive behaviour amongst employees and to increase output within an industry. This system involves rewarding employees with a monetary bonus upon completion of their daily tasks. An employer has the responsibility to appoint these tasks to employees for this system to work effectively and successfully. The employer must also decide on the bonus for their employees. This is just as important as deciding what their tasks should be as this drives incentive and is at the heart of the employees’ motivation. The task and bonus system boosted morality within the workplace as workers had it “placed in their power to earn a very substantial increase in wages by a corresponding increase in their productive capacity, and this has given them the feeling that the company is quite willing to reward the increased effort.” (1 – page 88.)

Advantages –

Incentives employees to be more productive.

Increases output for the business as they are now more efficient.

Reduced costs in the long run due to economies of scale.

Greater produce to sell which can lead to more revenue earned.

Limitations –

Potentially a slight disincentive to work as employees are comfortable on minimum wage.

Potentially overpaying employees as the tasks that they complete may not be worth as much as the extra wages employees are receiving. However, this is up to the employer to ensure that employees are getting paid the equivalent to the value of the additional work they are doing.

Deciding on what employee’s tasks should be, is time consuming for employers. It also may be difficult to ensure that these tasks are fair for all employees.

Our Thoughts –

The Task and Bonus System has been proven to work efficiently. When Gantt had originally introduced this system into the workplace, there was an instant jump in production. We can see why employees would enjoy this system and it’s evident that it gives a morality boost in the workplace. The Task and Bonus System is definitely a win for both business owners and their employees!

By Samuel Gammell, 03/11/22

References –

 Henry Laurence Gantt – Leader in Industry by L.P. Alford

Work, Wages and Profits – H. L. Gantt

How to Calculate Bonuses for Employees in 2021 | Eddy – Picture only