Scanlon, Joseph N. (Joseph Norbert), 1899-1956

Joseph Scanlon was born to Irish immigrants in Cleveland, Ohio in 1899. He served with the Navy in the early 1920s before being trained as an accountant. His experiences with industrial relations began when he worked as a cost accountant for a small Ohio steel company. Scanlon quit this position to tend an open hearth at the mill and in 1936 became a volunteer union organizer for the C.I.O. Steel Workers Organizing Committee (S.W.O.C.). By 1938 he was president of S.W.O.C. Local 169 in Ohio. While serving in this position, Scanlon managed to save the plant from closure by having plant management meet with the union at the union headquarters in Pittsburgh, Pa., to create a more efficient production plan based on workers' suggestions. Because of his success in saving this steel mill, United Steel Workers of America President Philip Murray hired Scanlon and in 1946 made him director of their department of research and engineering to aid other ailing companies. One year later he resigned his position in the USWA to become a lecturer at the Massachusetts Institute of Technology's Industrial Relations Department, a post he held until his death in 1956. During World War II Scanlon served on labor advisory committees for the War Production Board. In 1948 he was a member of Life's Round Table on the Pursuit of Happiness, and in the 1950s was a technical advisor to the Anglo-American Council on Productivity of the Mutual Security Agency. Scanlon is best known for his origination of the so-called "Scanlon Plan". This plan was developed in 1945 as a combination of different methods he had used to help companies become more efficient and productive. The Scanlon Plan is a set of profit sharing arrangements based on a company's historic ratio of labor cost and sales value of production. A key attribute of the plan is that union workers and management work together to cut costs while still maintaining or improving production by utilizing suggestions made by the workers. The money saved through these suggestions is then put aside and distributed among the workers and management. This placed emphasis not on individual achievement, but rather on the production of the workers as a whole because all bonuses were based on overall profit, thus making co-workers more likely to push each other to work more proficiently. The Scanlon Plan was applied to various industrial companies throughout the country and, after Scanlon's death, was continued by his associates, Fred Lesieur and Carl Frost.