3. =Bonus Systems.= An immense advantage can be counted upon by the employment of a bonus system, of which there are a good many; and it should be said at the start, that a bonus system may, although it probably will not, be opposed by labor unions. The general idea of a bonus system is to place the men upon a contract footing whereby they will be guaranteed a minimum wage, and more money than the minimum if they perform unusually good work. A refinement of this system may be applied where the men receive less than the guaranteed minimum if their work is noticeably poor. Where this latter arrangement should be applied, will depend largely upon the local conditions; and this feature is the one that is peculiarly obnoxious to the labor unions. Where the supply of labor is adequate, it is usually better to discharge the inefficient men than to attempt to work them under a depressed rate.
On a recent piece of work, the steam drills, of which there were 14, were averaging 4 feet of hole drilled per drill hour, the drillers were getting 30 cents per drill hour, and helpers 18¾ cents. For a period of ten days the drills were kept under the personal supervision and instruction of the expert in charge; and at the end of that time a bonus of 2 cents per foot for everything above 70 feet in 8 hours was offered to the men. On this basis no one could get a bonus unless he did 100 per cent better than the average previously attained. Exceedingly cold weather intervened, preventing a good deal of drilling; but within two weeks of the return to normal weather conditions, the average drill output rose to over 6 feet per drill hour, and one man obtained the remarkable record of 142 feet in 9 hours, or over 15.7 feet per drill hour. On this work a careful record was kept day by day, of the performance of each man; and the men who had a consistently low average were gradually discharged, thereby helping out the bonus system. The men were also under more or less constant instruction, and therefore the improvement was not entirely due to the bonus system.
A further modification of the bonus system is advisable in some cases, where an extra bonus is given for exceedingly high performance, such, for example, as paying the men an extra cent bonus, making 3 cents above, say, 90 or 100 feet per 8 hours. It is well, however, to apply this modified arrangement only after there has been an elimination of the poorest men. When possible, the payment of bonuses should be made at very short intervals, and not left to a monthly settlement.