Incentive

In General Controls Co.'s plant at Glendale, Calif., nobody wastes time going out for coffee, hanging around the water stand, or watching the clock. This week General Controls, manufacturer of more than 400 products ranging from home thermostats to jet engine controls, showed why. In 1950, said the company, its 1,050 employees were paid bonuses of $2,050,000, an average of about $2,000 apiece above their salaries. Reason: a liberal incentive plan, which makes it pay to work harder. The plan paid off in another way. In 1950 General Controls' sales nearly doubled (to $13.2 million), and its net jumped from $579,186 to $1,152,366, a new record.

The incentive plan was started in 1943 to lure labor to General Controls and step up war production. Before then, General Controls had "a sort of incentive plan," says General Manager Alvin Ray. "But it was lousy. Frequently we cut bonuses after production increased. We have since learned that when you once tell a man what the rate is, you don't lower that rate."

Under the present plan, production standards are set according to the time an average worker needs to do a given job; employees get bonuses for all work in excess of the standards, also share in a profit-sharing plan. At first the union (the A.F.L.'s International Association of Machinists) balked at the incentive scheme. But now almost everyone is happy, since employees get 50% more pay than others doing similar work in the area.

All in the Family. General Controls was founded in an Oakland, Calif, loft in 1931 by William A. Ray, then 26, and his brother Charles. Fresh out of Stanford University's engineering school, and with $10,000 in capital borrowed from their father, the brothers designed an industrial fuel control unit, did badly. They did better with a thermostat control for home furnaces, but not till they invented a simplified home-heater control did sales start soaring. By 1940, sales were up to $612,848. Since then more than $2,000,000 in stock has been, issued, to finance expansion of their plant in Glendale, and three younger brothers (General Manager Al, Sales Boss Jack, Plant Superintendent Richard) have come to help President William A. After Charlie dropped out in 1935, father William R. Ray joined the boys, and now, at 73, is chairman.

In All Planes. General Controls, which ranks close to Minneapolis-Honeywell Co. in volume of heating and refrigeration controls, has expanded into the manufacture of units for rockets and guided missiles. During World War II nearly every U.S. plane carried at least one General Controls product.

As defense production steps up and the labor market tightens, the Rays are not worried about losing workers to other industries. Thanks to the incentive system, General Controls' labor turnover is only about 1/2 of 1% per month (v. an average 4% for the Los Angeles area). Says 40-year-old General Manager Al Ray: "This is the sort of incentive system we need throughout the land, if we are to get rolling on a maximum production effort."

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