A COMMENT ON ‘ANALYSIS OF AN INDEX OF INDUSTRIAL MORALE’
| Published date | 01 March 1974 |
| Author | Roger Lasko |
| Date | 01 March 1974 |
| DOI | http://doi.org/10.1111/j.1467-8543.1974.tb00007.x |
A
COMMENT
ON
‘ANALYSIS
OF
AN
INDEX
OF
INDUSTRIAL MORALE’
ROGER
LASKO*
THE
publicationof ‘Analysis of an Index of Industrial Morale’ by
J.
H.
Pencavel
(pp.
48-55)
provides a good opportunity to examine precisely what statistics
can and cannot tell us. To do this, let us examine the method he has used and
some of the more important statements that he has made.
Pencavel starts by taking the four variables absenteeism, quit rate, accident
rate and strike activity and defines each of them in terms of one factor which
is
common to them all and of factors which are common to each. The factor which
is common to all four variables is defined as Industrial Morale. This factor,
Industrial Morale, is then fed into
a
Cobb-Douglas production function to find
the relationship that it has with the output
of
coal. Finally, he estimates the
relationship between Industrial Morale and financial performance, average age
of miners and the degree of mechanization.
This is what Pencavel has done. Before going on to look at what he has said,
let
us
look at the measurement
of
the four variables from which the factor
Industrial Morale is constructed. The quit rate is the ratio of leavers to total
employment and the accident rate is the number of accidents per hundred
manshifts. Strike activity is coal lost as
a
percentage of actual output and
absenteeism is the number of miners failing to attend work as
a
fraction of the
number expected to attend. Although not expressed as such, it would seem
reasonable to assume that absenteeism could also be defined in terms of output
1ost.l Without commenting any further at this stage on the significance of these
definitions, let us look at what Pencavel actually says.
The factor
m
which is common to quit rate, accident rate, strike activity and
absenteeism could well be Industrial Morale, but it could be say, the combined
effect of redundancies, profitability and pit closures,
or
it could be any one of
these things on their own, or it could be none of these things. Naming
m
Industrial Morale is an
assertion.
It is justified only if we choose to accept that it
is. We are perfectly free to interpret it as any other, equally plausible,
phenomenon.
Let us go on to equation
(2)
which is extremely important for Pencavel’s
findings. After calculating the estimates associated with Industrial Morale,
Pencavel states that: ‘An increase in labour morale has
a
positive and significant
impact upon output’. But what equation
(2)
allows us to arrive at
is
the extent
of association, not
a
direction of causality. It is just as likely that an increase in
output has an impact upon labour morale. It is in fact quite feasible to accept
the direction of causality in the statement above but only because of the ways
that the variables making up Industrial Morale are measured. If output is
lost
*
Research
Assistant, London
School
of
Economics
and
Political Science.
1
This
would be untrue
only
if the marginal
productivity
of
miners
is
zero-which
is
unlikely.
114
To continue reading
Request your trial