Working on the assembly line (Photo credit: Wikipedia)
Think you know??? You probably don't
Henry Ford is famous for mass-producing the automobile with an assembly line. But the part of his legacy we should be looking back to and learning from today was born in 1914 -- one year after his assembly line's implementation.
This was when he effectively doubled his workers' pay to $5 a day, a move Fortune magazine recently declared one of "the greatest business decisions of all time."
Some folks then and now misinterpreted this move as an act of charity on his part. But what actually motivated Ford was profit.
At the time, employee turnover at Ford (F) was high (similar to Walmart today, where 70% of employees hired leave within the first year). And no wonder -- completing the same task over and over again on an assembly line is boring.
This left the company with the ever-growing expense of recruiting, interviewing, and training new employees to fill their shoes. By doubling employee pay, he successfully convinced employees that working on the line wasn't so bad after all ... at least not while making twice what they'd make elsewhere.
The move -- which cost nearly $10 million at the time to implement -- became "one of the finest cost-cutting moves we ever made," according to Ford himself. Productivity jumped and employee turnover dropped from 370% to just 16%.
And a Consumer Revolution Began ...