Page:American Journal of Sociology Volume 2.djvu/59

 PROFIT-SHARING AT IVORYDALE 45

prominence, and employes in manufacturing establishments throughout the country became more and more restless, the com- pany was having a great deal of trouble with its employes. Within the year it had fourteen strikes, from eleven to one hun- dred and fourteen of its employe's quitting work in a body, and for all sorts of trivial causes. The company was continually at the expense of breaking in new people and the question was one of constant anxiety. After considerable hesitation it was decided to put into force a plan of profit-sharing and to secure if possible some relief from these troubles. 1 There was also the thought of establishing friendly and kindly relations with employes, as is shown by the words of Mr. James N. Gamble in introducing the plan. "We want," said he, "to afford to the boys and girls and men an opportunity to make the most possible of themselves ; we want these boys to grow up step by step to positions better and more profitable. . . . We want to establish friendly and kindly relations with you, to make your interests as far as may be our interests."

The plan as originally adopted provided for a division of net profits on the basis of proportion of wages paid to business done ; each participating employe sharing according to his earnings. " It was decided to allow as a portion of the expense of manu- facturing a reasonable salary to each active member of the firm, (4000) and to divide the remainder of the net profits between the firm and the employe's in the proportion that the labor cost of of production bore to the total cost of production. In other words, if the sales were $100,000, and the net profits, after deducting the salaries of the firm, Si 0,000, then the total cost of production would be $90,000. Assuming that the amount paid for wages was $20,000, then the Si 0,000 of profit would be divided, seven-ninths to the firm and two-ninths to the employe's. 8 Certain limitations in regard to sharing profits were adopted, only those who had been employed more than three months being allowed to participate, and boys and girls receiving below $4. 50 a week (about seventy-five in number) were excluded.

1 Independent, M ay 2, 1 89 5 ' /