Applied Dynamics Places All Employes On Salary

Applied Dynamics Places All Employees On Salary

In an attempt to erase the factory worker complex for production employees and to remove the enigma of class distinction between them and other employees, Applied Dynamics, Inc., has put all full-time personnel on a schedule of salary payment.

The move was in general recognition of the professional level of the company’s manufacturing personnel. “We feel that our production people are a cut or more above the typical factory worker,” Director of Industrial Relations Robert Higdon said.

Company officials feel that the move will lead to a greater awareness on the part of the employees of the responsibility that they have in the production of delicate computer components. The responsibility has always existed but Higdon feels putting the people on salary will make them recognize and accept the responsibility.

The key ingredient and the biggest asset in Applied Dynamics are its people, according to Higdon. “We really believe this and are not like a lot of other companies who mouth the words but do not put any of the principles into practice.”

If the production employees recognize and accept the responsibility, then Applied Dynamics expects to consistently grow and improve. If the responsibility is not accepted then the firm will proceed on a more or less hit and miss basis, Higdon explained.

As far as company officials know there are only a few other firms in the country which have made a similar move. “We didn’t research or investigate the idea in any great depth or copy some other company’s plan so we didn’t have background experience to apply. This is our idea for better or worse.”

The idea was one of several which came out of an office “bull” session between President Ralph Shapcott and Higdon. The two men were trying to come up with ideas that would make Applied Dynamics the best place to work. Officials felt that they had the best computer, marketing techniques, engineers and manufacturing operations but not the best wage conditions which would attract top notch people, Higdon said. “You can’t have a first class product if you have second class people.

“Of course we still have things to improve but company officials feel a great stride has been taken with the salary provision and other changes such as an improvement in take-home pay for manufacturing personnel as well as better insurance coverage and more holidays.”

Higdon feels that the company must attract the best possible people because the firm can’t operate effectively in its highly technical and specialized field with what is left over in the labor market.

With the present relatively low unemployment rate and therefore highly volatile labor market it is difficult to get and then difficult to keep enough employees. This general condition encourages job hopping and little or no actual commitment by the employee to his work, Higdon said. Furthermore, some companies are not above pirating, he added.

“Since Applied Dynamics is looking for production employees who are as committed as the president, we try to create an atmosphere which will encourage this line of thinking.” The company wants the individual employee to be concerned not only with doing his little job well but with the whole success of Applied Dynamics, Higdon explained.

Higdon said he was attempting to remove the time clock stigma and develop a sense of responsibility on the part of the employee so he will be challenged to step up and perform on a professional level.

The only problem the company has encountered is the initial load of paperwork which was required to make the transfer from an hourly to a monthly rate, according to Higdon.

The salary idea, which was introduced several months ago but only put into effect this month, has drawn a very favorable response from the affected employees. “I have yet to hear one negative comment,” he said.

“Applied Dynamics has come a long way since 1957 when four men started the company by building a computer in the basement of one of their homes,” Higdon said. Now the operation has 370 employees, 230 of which have been affected by the switch to a salary scale.

"Furthermore, we are anticipating a tremendous expansion in the Ann Arbor area during the next several years. Plans are being made for the near future to consolidate our operation from the five locations into one plant which will be a considerable increase over the present total square footage.”

The recent merger with Reliance Electric Co. of Cleveland, Ohio, has given Applied Dynamics a much larger source of capital and enabled the company to broaden its product base, Higdon explained. Becoming the fourth operating group of a $301 million corporation has changed the outlook considerably for Applied Dynamics. Sales for the local firm in 1968 were reported at $6.4 million.

Applied Dynamics has moved from exclusively developing analog hybrid computers to participating in the process automation market, an operation which most manufacturing companies can use and are seeking to implement.

Until four years ago Reliance Electric dealt mostly in motors and their controls. But since then the company has expanded rapidly and now includes three other groups besides Applied Dynamics: the Dodge Manufacturing Division, the Toledo Group and the Industrial Drives Group. Reliance’s main area now will be the process automation market. Applied Dynamics will complement the other groups by offering technical ability to tie together the industrial processes through computer technology, Higdon explained.