50 Years of Computer-Produced Payroll
Saturday, October 30, 2004
Posted by: John K. Swearingen, AITP President from 1964-65
The attached story is based on John's memory as an active participant in computer programming and operations.
October 2004 will mark the 50th anniversary of the first business or accounting computer application: computer-produced payrolls. In the second week of October 1954, Univac I at GE's Appliance Park in Louisville, Ky., produced weekly paychecks for about 2,000 factory employees. Over the next few months, departments were added until all 11,000 factory employees and the 2,000 office staff and managers were receiving their pay via the computer. Programming began a year earlier, after a summer of extensive study of factory production systems, timekeeping and payroll practices.
This first-ever computer-prepared payroll was also one of the most complex and comprehensive ever. The factories at Appliance Park operated on an incentive basis, and factory employees were paid according to their production; individual pieceworkers were paid for each part produced, and assembly line workers were paid according to the number of units produced by the entire group. In the course of a week, an employee might be shifted back and forth from piecework to assembly line. Time cards were matched to piecework tickets and group data, to ensure that all of an employee's time was covered and to give factory schedulers a complete record of production.
Group incentive calculations started with quantity and ID of units produced, time needed for production and skill sets of all group members. Due to the dynamics of GE's production schedules, the same product was seldom produced for more than a few hours, resulting in multiple group configurations in the course of a day on an assembly line.
All tax, insurance and benefit participation deductions were calculated. Weekly, monthly, quarterly and year-end tax and payroll reports, including W-2s were printed.
The pay week was Monday through Sunday. All data was entered via punch cards received from the payroll offices on Tuesday night. This was followed by more than 40 hours of computer time. Univac I was a vacuum tube machine so restarts usually burned up an additional 25 hours and our programming wasn't that bug-proof. (Management had promised paychecks would be produced in 20 minutes.) We were committed to delivering paychecks to the payroll offices on Friday. Paychecks were distributed on the following Tuesday, nine days after the end of the pay week. The midnight shift was given paychecks as they clocked in on Monday night.
That schedule made the life of operators and the operations manager pretty exciting. Especially after production control and accounting systems were installed and competed for that limited computer time.
In the years that I was associated with it there was not one missed or late payroll.
Our pride of accomplishment was chilled by the embarrassment of our failure to meet the original schedule for completing the programming. GE's management expected projects to be so thoroughly planned that resources and time needed to reach completion were known in advance. Missed deadlines were cause for deep sanction.
When our team (consisting of Byron Burch, Mildred Henderson, Nancy Tafel and me) began programming in the fall of 1953, there were no benchmarks for estimating, as no one had ever done this. Management - not the programmers - assigned resources and set completion for end of 1953 with payroll to begin Jan. 1, 1954. When we understood the enormous task we had undertaken, Univac, Arthur Andersen and additional GE employees all fresh out of programming class augmented the four original programmers.