In answer to a request from Archie T. in Rockford, AL - "I'm very interested in learning more about why the games you use to improve businesses work as well as I'm told they do. To be honest, I think giving out gold stars to grown ups seems rather childish. Try to convince me otherwise."

The  Million Dollar, Gold Star

Authored By: Gene Levine, C.E.O. Gene Levine Associates

Keynote speech given to 1,378 attendees at the Georgia World Congress Center, Atlanta - 1971

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One of the main business goals is to increase profits. Very often additional profits come from increasing employee’s production. If increasing profits is your company’s goal, can something properly used that costs less than a penny increase employee output 30 percent or more?

Answer this, back when you were a child in school, did your teacher give you a gold star or a stamped piece of paper to show your parents – when you did something very good? Most likely, that psychic reward made you feel very good.

What you are about to hear is true. It’s about seven words and a psychic gold star reward that not only increased y client’s labor-intensive production worker’s take home pay 40 percent but also how that allowed my clientele to make millions of additional dollars of profit. Maybe those ideas will also work for you.

The story begins in 1942 New York City when I was nine years old. The United States was now in World War II fighting both Germany and Japan. Because of the war, civilian doctors and dentists had to find innovative ways to overcome a shortage of vital pain killing medicines needed by the military. That’s why, with having my first toothache, my mother knowing my low tolerance for pain at the time, was recommended to an advertised “Painless” Dentist – Dr. Macklin.

When we got to his office, he told my mom to remain in the waiting room. Then we went into his procedure room. Instead Dr. Macklin of seating me, he motioned me to walk over to some hanging charts printed on poster board entitled, "I CAN TAKE IT CLUB". On the left side of the charts were many names one under another. To the right of each name, were little boxes, which had gold stars in them. I recognized some names as being my classmates and friends. DDS. Macklin sensing I knew many of the names, spoke and said, "When I drilled your friend's teeth, they were brave, they didn't scream, shout, squirm, or cry. That’s how they got those gold stars." Without saying another word he sat me on the chair, put a bib on me and put a bit in his drill.

I sat silently apprehensively anticipating what was going to soon take place. But, I made up my mind that if my friends got gold stars I could also get at least one. To this day I clearly remember the whirring of the drill, smelling burning bone, and how much it hurt. But, I wanted that gold star so much I wasn’t going to move or cry! So as he drilled I kept pressing my eyes tight shut and squeezing the porcelain arms of that dental chair so hard I wondered why the porcelain wasn’t turning to dust. When he finished, I silently thought. YIPPEE, I DID IT!

After he finished, he added my name on the chart. Then he called in my mom and bragged about me as he put a gold star next to my name. Little did I realize it at the time but that was to be the most important gold star I would ever receive in my life.

Sixteen years later after I received that star from DDS Macklin. I am now 24 years old and the Manager of Production Engineering at Allendale Garment Company in Allendale, SC. Howard Stringer my boss knew I was autodidactic and read everything I could to improve my job knowledge and performance. He came to me in the factory and said, “Gene, I’ve registered you attend a seminar being held at the Westinghouse factory in Hampton, SC.” He then handed me the seminar’s flyer and a paid ticket.

The scheduled speaker was, Douglas McGregor a distinguished professor at M.I.Ts Sloan School of Management. He was doing consulting work for Westinghouse and agreed to conduct a seminar on, "The Human Side of Enterprise," the name of the book he had recently published.

The flyer explained Dr. McGregor was well known for his Theory X and Theory Y. Theory X explaining the importance of heightened supervision, external rewards, and penalties, while Theory Y highlights the motivating role of job satisfaction and encourages workers to approach tasks without direct supervision.

It was at that meeting, during his lengthy speech, that I heard Professor McGregor nonchalantly remark, "When dealing with people, the most important seven words you could know are,
A satisfied need no longer motivates behavior". I wrote down and underlined that thought in the notes I was taking. It was how he said those seven words that somehow told me they would be important to me and my job and my future. I was right!

At the end of his talk, Professor McGregor entertained questions. I asked him if he could recommend books that would help me in my job as engineer trainee in a garment factory. He then questioned me about my job, type of products we made, and some of my problems. Then, he answered my question, "Any book written by Abraham Maslow would probably help you."

Up to then I had never heard of Maslow and his renowned theory of Hierarchy of Human Needs. Then he added, “Dr. Maslow, incidentally, coined those seven words, '"A satisfied need no longer motivates behavior" that I talked about earlier,"

I bought and read both Dr. McGregor’s and Abraham’s Maslow's books, Not only were they applicable to my better job performance when I finished them, I was also a different person. Their thoughts positively changed my life.

About a year went by after that seminar at Westinghouse when once again, Howard Stringer’ came to me and explained that he had just learned the Manager of our Barnwell factory had suddenly been taken to the hospital and he needed me to “watch” Barnwell for a while.

As he drove me towards Barnwell, Howard said, “The Barnwell factory has been making the same products for years so it was an easy factory to manage.” He emphasized, “Nothing there needed changing. “Levine, everything in Barnwell is balanced. The truck will come on Fridays to drop off the cut work for the next week and pick up finished goods.” “Let’s keep it that way.” When he left his directive of not changing anything in Barnwell was indelibly engraved in my mind.

Now, you may need to understand that in sewing factories operators work and get paid for each piece they produce. That system is called “piece work. At that time, in Barnwell, the average operator was only earning $.60 per hour but still got paid the prevailing federal minimum wage of $.75 per hour. Because the operators got paid more than the earned it had reduced their incentive to produce.

I began talking to the operators. The more I talked to them the more it became obvious to me that as a group, they didn’t seem to want to earn more because the federal minimum was good enough and to earn “really good” money they would have to work harder. They justified their lack of additional effort  stating the piece rates of pay, “were too low.” What was strange to me was that the operators in the Allendale factory had identical jobs and piece rates yet in the Allendale factory operators were earning an average of $1.00 per hour – or 40% more than the Barnwell operators.

The operator’s negative attitudes of no need or desire to produce more was the issue. I felt if I could somehow get them to work smarter, not harder they could earn at least $.40 more per hour. What I needed a way to change their mindsets, but how to do that without violating Howard’s instructions. For about a month I unsuccessfully pondered and pondered how to do it.

One day, an idea came to me when I remembered how Dr. Macklin had succeeded in changing my fear by offering me a gold star to overcome that fear. Maybe . . . would gold stars provide the motivators to reverse their negative thinking? I concluded that it was worth a try.

I purchased 20 poster boards and designed “I CAN MAKE $1.00 PER HOUR CLUB” charts. I put all the operator’s names on them. I told the supervisors that, each day any operator earned $1.00 or even more they would be given a gold star.

Immediately, by their reactions the supervisors were convinced that their new Yankee boss was nuts. They told me, “How can you expect them to earn $1.00 when no one even now comes close. . . and do it for silly little stars?” I told them, please say nothing to the operators about those charts and be patient. If any ask, just tell them to check the spelling of their name

It took about five weeks before the first star appeared. The next day that same operator got another star. On the third day the same operator again got a star but that day, another operator’s gold star also appeared elsewhere on the chart. The race was on, the game had begun. The operators were apparently saying to themselves the same thing I said to myself in Dr. Macklin’s office, if she can do it, I can do it too, because they are no better than me.

Now when in the factory talking to the operators, I would ask them, if there was anything I could do or get for them that would help make their jobs easier so they too could earn gold stars?  

Soon production increased and gold stars were all over the charts and so I called the Allendale factory to send me the truck two days earlier because, the operators were running out of work.

Within minutes received a phone call from Howard Stringer, He asked, “Why has production suddenly increased? I told him the truth – Howard, I never asked or told any of the operators to increase their production. They just decided on their own and figured out faster ways or had a a reason to increase their output.

About a half hour later, Howard’s walked into the Barnwell factory and saw the charts on the wall. As he looked at the charts, I sensed his mood and felt I might be in trouble. The sounds of the machines had become louder so he motioned to me to put my ear near his lips which I did. Pointing to the charts he asked, “what are these charts all about?” He went on to say, “Levine, didn’t I say no changes?” I replied, Howard, all I did was make and hung those charts on the wall.

He then turned and walked towards the door shaking his head from right to left, and said, “Levine, can you be in my office in about an hour?” I nodded and when he left. I felt I was going to be fired.

I drove to Allendale. When I entered his office, Howard silently handed me an envelope with my name neatly typed on it. When I opened it there was a small piece of paper with a gold star along with these words, “Congratulations on your promotion and pay raise.” When I looked up, he was smiling! Howard then sent me to the other Allendale Garment Factories where I used gold stars to sustainably increased their production.

Because of my unique and successful approach to increasing production throughout the entire company, Howard asked me to write an article for a trade journal. And in 1960 I did. It was entitled, Management’s Biggest Problem – Human Relations. That article caused one of the largest companies in the sewn product’s industry to make me a job offer I couldn’t refuse.

My many trade magazine articles along with solid reputation of always increasing production 30% or more had many companies make me job offers in 1964 I decided to open my Management Consultant firm.

In closing my father once told me, "Grown-ups were once children and children are the same all over. they always want what the other kids have. So, If you want to capture the additional profits that are available to you right now, stop focusing on what your employees already have because those things no longer motivates them.

You do know what their unsatisfied needs are.. . . don’t you?