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Robert Owen: pioneer of personnel management.

Robert Owen (1771-1858) was an early industrialist--perhaps best known for his model textile factory and village at New Lanark in Scotland.

Conditions in early factories were extremely harsh, with very hazardous working conditions for all employees. Long working hours (normally at least 13 hours per day, six days a week) were the norm, with children as young as five or six working under the same conditions as adults. Factory owners placed more importance on the care of their expensive machines than on the well-being (or otherwise) of their expendable employees. Owen's strength was that he saw his employees as every bit as important to the success of his enterprise as the machines he owned. By examining working methods and conditions, and seeking to improve these, he is justifiably claimed as a father of personnel management.

Owen the factory owner

By the age of 19, Owen was joint owner of a textile factory in Manchester. Being new to the responsibilities of management, he learnt about the workings of the factory by observing his employees as they carried out their work. He wrote:

"I looked very wisely at the men in their different departments,although I really knew nothing. By intensely observing everything, I maintained order and regularity throughout the establishment, which proceeded under such circumstances much better than I had anticipated."

In 1799, Owen (with a group of partners) purchased the New Lanark mill from his father-in-law David Dale. Even though Dale was recognised as a progressive employer, conditions in and around the factory were still very poor. Children from five or six years old were employed through contracts with the local poor house, and working for 15 hours per day was common. Owen immediately withdrew from accepting any further children from the poor house and raised the minimum age of employment to 10. He also banned the beating of children.

Although a paternalistic employer, Owen was a business person above all else. He made no changes to employment conditions which could not be justified on economic grounds--all social improvements at New Lanark were funded through the profits of the factory. To achieve this, he required improved productivity from his workforce through changes to the working practices and methods of the factory.

For a workforce that was already working very hard, this was not popular. Owen (uniquely for the time) realised he had to gain the trust of his employees in order to get them to cooperate with the changes to the working environment he wished to achieve. He did this (in the language of today) by persuading `champions'. He wrote:

"I ... sought out the individuals who had most influence among [the workforce] from their natural powers or position, and to these I took pains to explain what were my intentions for the changes I wished to effect."

Owen further won the trust of his employees when, in 1808, America passed a trade embargo on British goods. Most mills closed and mass unemployment occurred. Unlike other mill owners of the time, Owen kept his employees on full pay just to maintain the factory machinery in a clean, working condition.

This approach of fair management proved to be successful, and as returns from the business grew Owen began to alter the working environment. Employment of children gradually ceased (as no further children were indentured from the poor house) and those still in employment were sent to a purpose-built school in New Lanark. The housing available to his workers was gradually improved, the environment was freed from gin shops and crime decreased. The first adult night school anywhere in the world also operated in New Lanark. Finally, Owen set up a shop at New Lanark, and the principles behind this laid the basis for the later retail cooperative movement.

Owen the innovator

Owen's innovations, however, did not merely extend to improving working conditions for his employees. The Industrial Revolution (which began in the mid to late 1700s) led to a belief in the supremacy of machines. Owen opposed this growing view by seeking to humanise work.

"Many of you have long experiences in your manufacturing operations of the advantage of substantial, well-contrived and well-executed machinery. If, then, due care as to the state of your inanimate machines can produce such beneficial results, what may not be expected if you devote equal attention to your vital machines, which are far more wonderfully constructed."

As already indicated, Owen was one of the first to `manage' rather than order his workforce, and the first to attempt to gain agreement for his ideas rather than impose them on others (a worker could not be sacked for disagreeing with Owen). Additionally, he required his managers to behave with some autonomy (the first example of empowerment at work?); Managers (or Superintendents) were selected carefully and trained to be able to act in Owen's absence.

Owen developed an aid to motivation and discipline--the Silent Monitor system--which could be described as a distant ancestor of appraisal schemes in practice today. Each machine within the factory had a block of wood mounted on it with a different colour--black, blue, yellow or white--painted on each face. Each day the superintendents rated the work of their subordinates and awarded each a colour that was then turned to face the aisle so that everyone was able to see all ratings. The intention of this scheme was that high achievers were rewarded and slackers were motivated to improve.

Owen the reformer

The factory at New Lanark was spectacularly profitable, with returns of over 50% on investment, and Owen held this to be proof of the validity and importance of his theories. Strengthened by his profitability, he tried to persuade other manufacturers to follow his example in employment practices. This was first attempted through those of influence who visited New Lanark (estimates put the number of visitors at an incredible 20,000 between 1815 and 1825) and then, in 1815, via his attempt to introduce a bill to legislate on working conditions in factories.

The aim of the bill was to ban the employment of those under 10, to ban night shifts for all children, to provide 30 minutes education a day for those under 18, and to limit the working day to 10 1/2 hours. This would have been enforced by a system of government factory inspectors. The bill failed to be introduced in its intended form, as its opponents argued that it would be bad for business and that in any case most employers were voluntarily doing what the bill would require. By the time it was finally introduced in 1819 the legislation was limited to banning the employment of those under nine.

In 1823, disillusioned with his failure to successfully introduce far-reaching employment legislation, but still enthusiastic about his ideals, Owen left for America, where he founded New Harmony in Indiana. This, along with other projects, failed due to internal disagreements and bad planning. He returned to England, where in 1834 he founded (and briefly chaired) the Grand National Consolidated Trades Union and continued to push for social reform and the growth of the cooperative movement. Robert Owen died aged 87 in 1858.

Owen in perspective

Owen occupies a curious position in the history of management thinking. Dismissed by his contemporaries and now little recognised apart from the linking of his name with that of New Lanark, his vision and foresight place him as the pioneer of management practices which are taken for granted today.

Although many influential people visited the sites of New Lanark and New Harmony, the ideas he propounded failed to win him immediate followers. There is much debate about the reasons behind this. The New Lanark factory was obviously very profitable (although as Frank Podmore argued, almost any personnel policy could have been profitable that because profits in the cotton spinning industry at the time were so large), but still none of his factory-owning contemporaries adopted his ideas. Possibly the radical nature of his views contributed to this--if he had instead advocated a step-by-step approach towards improving working conditions and relations with employees instead of an `all-or-nothing' approach, then he might have been more successful.

Although it is not too surprising that resistance to his ideas came from factory owners (who may indeed have felt they had much to lose from following them), antipathy was also expressed from across the political spectrum. Some of the most long-lasting criticism was expressed by Marx and Engels in their Communist Manifesto. The label of "Utopian" that they applied to Owen is one by which he is still well known. The Manifesto expressed the view that his ideas could not work in practice; his success at New Lanark was, they argued, due to luck rather than judgment.

Against these negative views must be set the experiences of those followers Owen did inspire. Although Owen's own partnership with Quakers and non-conformists at the end of his time at New Lanark failed (due to their wish to impose religious instruction on all), it was this sector of society that produced those who were most influenced by his ideas; they included Titus Salt, George Palmer and Joseph Rowntree.

The foresight he demonstrated in areas such as motivation of employees, industrial relations and management by observation was appreciated only a century later in the work of FW Taylor and Mary Parker Follett, amongst others. In 1949, Urwick and Brech wrote of Owen:

"Generations ahead of his time, he preached and practised a conception of industrial relations which is, even now, accepted in only a few of the most progressive undertakings."

Owen's lasting contribution may be best seen in the fact that for modern employers not to meet the practices he advocated is unthinkable.

Works by, and about, Robert Owen
A new view of society
London: np, 1817

The life of Robert Owen
London: Effingham Wilson, 1857

Robert Owen, Frank Podmore
London: Appleton, 1906

These items are not available from the Management Information Centre.

Further reading

The editions cited here are those held in, and available for loan to members from, the Chartered Management Institute's Management Information Centre. These may not always be the first edition.
Leading change: overcoming the ideology of comfort and
the tyranny of custom, James
O'Toole, San Francisco: Jossey-Bass, 1995

Makers of management: men and women who changed the business
world, David Clutterbuck and Stuart Crainer
London: Macmillan, 1990

Evolution of management thought, Daniel Wren
New York: John Wiley, 1987

Making of scientific management: volume ii management in
British industry, Lionel
Urwick and Edward Brech
London: Management Publications Trust, 1949
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Geographic Code:4EUUK
Date:Dec 1, 1999
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