PERSONNEL ADMINlSTRATlON lN LARGE ADVERUSlNG AGENCIES T‘ms‘s ‘or “10 De ‘ . MICHIGAN STATE umvmsm James Kent Elierbrake 1962 {J ' 7. LIBR A R Y Michigan State 1 University 5 PERSONNEL ADMINISTRATION IN LARGE ADVERTISING AGENCIES BY JAMES KENT ELLERBRAKE‘ AN ABSTRACT OF A THESIS Submitted to the College of Communication Arts of Michigan State University in partial fulfillment of the requirements for the degree of MASTER OF ARTS Department of Advertising 962 l l'.’ / Approved WM /\ PERSONNEL ADMINISTRATION IN LARGE ADVERTISING AGENCIES By James Kent Ellerbrake Since the close of World War II advertising expenditures have quadrupled from three billion dollars in 1945, to twelve billion dollars in 1961. Consequently advertising agency manpower requirements have increased. To fill these require- ments agencies have recruited personnel from other industries, and pirated needed employees from other agencies. Modern persbnnel procedures are needed to bring ordef>out of this "musical chairs" dilemma. It was the purpose of this study to ascertain the present status of personnel administration in the nation's largest advertising agencies. The study was divided into two areas: (1) the structure of the agencies' personnel departments, and the characteristics of the person- nel directors; and (2) the personnel policies and practices followed by the agencies. To obtain the desired information a mail questionnaire was sent to the personnel director of each of the nation's twenty-five largest advertising agencies. Fifteen returned a usable questionnaire. James Kent Ellerbrake The findings revealed that most large agencies now maintain an organic personnel department. That this is a fairly recent development, is shown by the fact that few agencies had departments ten years ago. The personnel directors were judged well-qualified for their position as chief personnel executive by virtue of edu— cation and experience in personnel administration. The major- ity of the directors were college graduates, most of whom had college backgrounds in psychology and personnel. Primary sources for new salaried personnel were: (1) referrals from staff members, (2) voluntary applicants, (3) employment agencies, and (4) selective recruiting (pirating). College recruiting, although not yet a major procurement source, is gaining in importance. Following the initial con- tact, agencies employed resumés, mental tests, and extensive personal interviews to screen applicants for employment. The majority of the agencies utilized organized training programs for new employees. The most popular programs were Department Routing, and Department Training. College intern- ship programs were provided by one-third of the agencies. More than half of the agencies have instituted some form of job analysis and description. All the agencies maintained central personnel records and have adopted health and benefit programs. James Kent Ellerbrake The larger agencies are beginning to adopt modern personnel practices in their approach to the critical problem of effectively utilizing their human resources. PERSONNEL ADMINISTRATION IN LARGE ADVERTISING AGENCIES BY JAMES KENT ELLERBRAKE A THESIS Submitted to the College of Communication Arts of Michigan State University in partial fulfillment of the requirements for the degree of MASTER OF ARTS Department of Advertising 1962 /. f 1’- » ’ ‘ / 4 / ' ’7’ h . / , 0/ {BREFACE A major problem facing advertising agencies today is that of manpower. Advertising in the United States has under- gone dynamic changes since WOrld War II. Advertising expendi— tures have quadrupled, from three billion dollars in 1945 to twelve billion dollars in 1961. Agency operations have become vastly more complex. As a consequence, a manpower shortage evolved which, until recently, was solved largely by adflhoc measures. Today, many of the larger agencies are making an effort to effect a more orderly solution through the appli- cation of modern personnel procedures. Little has been published concerning the personnel prac- tices of agencies: Therefore,this study was designed to ascertain how many large agencies have personnel departments, the organization of the departments, the background of their directors, and the personnel policies and practices followed. Exploratory discussion with several agencies resulted in the decision to restrict this study to those agencies most likely to have introduced some of the current corporate per- sonnel practices. By industrial standards even the largest agencies are still small businesses: the average agency is economically unable to support a personnel department. A 9 ii General Motors, a Du Pont, or a General Electric agency hires more people in a single year than all agencies put together. Therefore, only the twenty-five largest agencies were surveyed. Fifteen returned usable questionnaires. The findings thus may be considered representative of the largest agencies but should not be generalized to the agency field as a whole. I would like to express my sincere thanks to Dr. Kenward L. Atkin, Department of Advertising, Michigan State University. Without his initial impetus, and his continued advice and encouragement throughout, the project would never have been completed. I am also grateful to Professor John W. Crawford, chairman, Department of Advertising, Michigan State University, for his many contributions. A study of this type is completely dependent for its success on the cooperation received from the respondents. I wish to express my deep appreciation to all those responding to the questionnaire; the study would not have been accom- plished without their generous cooperation. iii IPREFACE TABLE OF CONTENTS TABLE OF CONTENTS . . . . . . . . . . . . . . . . . LIST OF TABLES . . . . . . . . . . . . . . . . . . LIST OF APPENDICES . . . . . . . . . .'. . . . . . . CHAPTER: I INTRODUCTION . . . . . . . . . . . . . . . . ‘ II STRUCTURE OF THE PERSONNEL DEPARTMENTS AND GENERAL CHARACTERISTICS OF THE DIRECTORS . . . . . . . . . . . . . . . . . . ‘Number of Agencies Maintaining Personnel “/ Departments . . . . . . . . . . . . . . . Number of Years the Departments Have Been, in Operation . . . . . . . . . . . . .'. Number and Type of Personnel Department Employees . . . . . . . . . . How the Personnel Function is Handled by Those Agencies Not Maintaining a Personnel Department . . . . . . . . . Respondents' Characteristics . . . . . . . Prior Job Experience of the Respondents . . . . . . . . . . . . . . Agency Officer to Whom Directors Report . . . . . . . . . . . . . . . . . Title of Agency Director‘s of Personnel Activities . . . . . . . . . . iv Page iiv iv vii 10 ll 12 14 15 16 III Educational Background of Personnel Director . . . . . . . . . . . . Undergraduate Colleges and Universities Attended by the Respondents . . . . . Undergraduate Curricula Followed by the Respondents . . . . . . . . . . Respondents Who Have Had College Courses in Psychology and Personnel . . . Graduate School . . . . . . . . . General Advice on Education and Experience for Agency Personnel WOrk . AGENCY PERSONNEL POLICIES AND PRACTICES . Procurement . . . . . . . . . . College Recruiting . . . . . . . . . . RespondentS' Hiring Preferences“. . . . Desirability of Advertising Courses in the Background of Prospective Salaried Employees . . . . . . . . . . . . Additional Procurement Procedures . . . Training . . . . . . . . . . . . . . . . The Internship Plan . . . . . . . . . Administration . . . . . . . . . . . . . Job Analysis and Specifications . . . Central Personnel Record File . . . . . Health and Benefit Programs . . . . . Vacation Policy . . . . . . . . . . . 17 18 19 20 20 21 24 24 26 31 33 34 37 42 44 44 45 47 49 Compensation Status of Agency Personnel Management IV SUMMARY APPENDIX . . . . . . BIBLIOGRAPHY . vi 50 52 55 61 69 (‘\\ Number II-l II-2 II-3 II-4 II-5 II-8 11-9 11-10 11-11 III-1 III-2 III-3 III-4 LIST OF TABLES NUmber of Agencies With Organic Personnel Departments . . . . . . . . . NUmber of Years the Personnel Departments Have Been in Operation . . . . . . . . Size of the Personnel Department Staff . RespondentS' Characteristics . . . . Previous Job Experience . . . . . . . . Agency Officer to Whom Directors Report Official Title of Director of Personnel Activities . . . . . . . . . . . . . . Educational Background of the Sample Group . . . . . . . . . . . . Undergraduate Colleges and Universities Attended by the Respondents . . . . Undergraduate Curriculum Followed by Those Who Attended College . . . . . . Respondents Who Have Taken College Courses In Personnel or Psychology . . Sources of Salaried Agency Personnel . Number of Schools Visited Last Year by Agencies Doing College Recruiting . . Universities Visited by Agency Recruiters . . . . . . . . . . . . Per Cent of New Salaried Employees Gained Through College Recruiting . . . . . . vii Page 10 11 13 14 15 16 17 18 19 20 26 27 28 29 III-5 III-6 III-7 III-8 III-9 III-10 III-11 III-12 III-13 III-14 III-15 III-16 III-l7 Opinions of the Respondents Concerning Hiring Preference to Possible Salaried Applicants According to Their Educational Training . . . . . . . . . . Hiring Preferences of the Respondents . . NUmber of Responding Agencies Maintaining Training Programs . . . . . . . . . . . Combination Training Programs Vs. Single Training Programs . . . . . . . . . . . Agency Training Programs . . . . . . . . . Respondents' Opinions on the Desirability of an Internship Plan for Students Who Have a Vocational Interest in Advertising . . . . . . . . . . . . . . Agencies Maintaining Internship Programs . Opinions of the Respondents Who Recommend an Internship Plan as to When the Training Should Take Place . . . . . . Incidence of Job Analysis and Job Specifications in Agency Per- sonnel Administration . . . . . . . . . Incidence of Central Personnel Record Files in Agency Personnel Administration . . . . . . . . . . . . . Elements of Agency Personnel Record . . . Incidence of Health and Benefit Programs in Agency Personnel Administration . . . Incidence of Various Elements of Health and Benefit Programs . . . . . . . . viii 31 32 37 39 4o 43 43 44 45 46 47 48 49 III-18 Starting Salary for College Graduates Applying for Positions in Advertising Agencies . . . . . 51 111-19 Methods Utilized in Determining Agency Wage Levels . . . . . . . . . . . . . . . . . . 52 ix A. LIST OF APPENDICES Survey Questionnaire . . . . . . . Page 61 CHAPTER I INTRODUCTION It is not uncommon to hear ad men remark that manpower is among the most critical problems facing agencies today. A recent publication by the American Association of Advertising Agencies underlines the urgency of the problem: "The adver- tising business in all its aspects will require about 18,000 new people every year for many years, of which advertising agencies will absorb about 6,000."1 Dr. Samuel Stevens, of the consulting firm of Stevens, Thurow,and Associates, Chicago, reports that "there is scarcely an agency that has adequate manpower in the senior level, adequate reserve manpower in the middle ranges, and sufficient number of young persons in training who will inev- itably become senior professionals in agencies in the years ahead."2 The Advertising Business and Its Career Opportunities, The American Association of Advertising Agencies, 1961, p. 21. Samuel Stevens, "Encouraging Creativity," Papers from 1961 Annual Meeting of the American Association of Advertis- ing Agencies, p. 43. Dr. Stevens submits that the prime cause of the manpower situation is a failure on the part of agencies and their per- sonnel departments to utilize the modern tools of personnel administration: "In the last decade practically every large corporation has developed fairly complete systems and proce- dures for the procurement,the up—grading and the motivation of its manpower through the efforts of their personnel department. Only a relatively small number of AAAA members have carried out any systematic studies designed to improve the quality of agency performance, either in recruiting, in-service training, or in up-grading mature, senior staff personnel." According to Mr. Gordon Buck, former Vice President of Foote, Cone,and Belding, "the need for more and better people is going to become more acute in the years ahead. The popular prediction for total advertising volume in 1965 is fifteen billion dollars. . .national advertising placed through agen- cies may account for nine billion of this. This will neces— sitate additional personnel; furthermore they will have to be better educated and better trained to deal with the increased complexities of marketing and advertising. Such people are 31bid. going to be hard to get from other businesses, and too few agencies are prepared to develop such people.“ Stevens believes that part of the problem is a failure of the agencies to follow through on recruiting efforts once begun. "Responsible agency executives estimate that nearly a .million dollars will be spent this year in the securing, influ- encing and preliminary training of young men and women for advertising," he said, but "only a small percentage of those sought after will be employed, and a smaller percentage of those who are given first employment will develop into pro— fessional ad men." The editors of Printer's Ink suggest that the reason for the lack of competent young people is "a lack of college recruitment programs by advertising firms, scarcity of bona fide and adequate agency recruitment programs by advertising firms, scarcity of in-service training programs, and a declin- ing appeal of advertising as a profession to young people today."6 Gordon Buck, "Recruiting Ad Men From College Ranks: Is Advertising Passing Up Good Talent?" Printer's Ink, April 12, 1958, p. 47. 5Stevens, op. cit., p. 43. 6"Agency Recruiting," Printer's Ink. April 22: 1960' p. 34. Agencies raid one another to gain needed personnel. In a recent address to the American Association of Advertising Agencies, Professor John W. Crawford, Chairman of the Depart- ment of Advertising at Michigan State University, stated that "agencies are playing musical chairs to fill responsible job positions. “This practice has become part of the tradition of advertising agencies; however, because it is a traditional . . . 7 practice does not mean It IS a good one." Advertising Education Dr. Stevens suggests that the deficiency of advertising education programs (there are only 39 accredited educational programs in advertising across the country), low starting salary, and lack of in-service training programs are reasons college graduates tend to shy away from agency work. In order to improve the present manpower situation, Dr. Stevens recommends a plan of action using as its main force the modern tools of personnel administration: 1. Advertising must find ways of influencing educa- tional institutions to do a more comprehensive job 7John W. Crawford, Speech presented to the American Asso- ciation of Advertising Agencies meeting in Detroit, Michigan, November 30, 1961. 8Stevens, op. cit., p. 44. than it has done in preparing young men and women, both intellectually and psychologically, for crea- tive participation in advertising and selling as a professional way of life. Effective utilization of existing manpower within the agency. This would include personnel control, ade— quate position descriptions for various types of work which have to be done in the agency. In the second place, the personnel system should include effective performance review or job evaluation. In the third place counseling and motivating senior employees to improve their performance. The third aspect would be setting up adequate man- power inventories on the basis of procurement poli- cies so that additional personnel may be determined. This would be carried out by a sound realistic posi- tion description to work from, and a system of man- power inventory of present and future needs will make it possible for the recruiting of inexperienced per- sonnel to be planned and carried through with the intelligence and thoroughness which it deserves. Above everything else, agencies will need an articulate in- service training program wh'ch can understand, train, and evaluate prospects. /7 It is the purpose of this study to determine how far this nation's largest advertising agencies have moved in establish- ing adequate personnel facilities and direction to confront the manpower dilemma. Study Design To obtain the desired information, the survey used a mailed questionnaire (see Appendix). Preliminary discussion with several agencies revealed that only the largest 9Stevens, op. cit., p. 45. advertising agencies were likely to have introduced personnel department practices. Therefore,it was decided to restrict the survey to the nation's twenty-five largest agencies. The twenty-five were selected on the basis of billings as pub- lished in the February 22, l96l,issue of Advertising Age as follows: J. walter Thompson Company McCann-Erickson Advertising Young & Rubicam, Inc. Batten, Barton, Durstine & Osborn, Inc. Ted Bates & Company Leo Burnett Company, Inc. N. W. Ayer & Son, Inc. Foote, Cone, & Belding Benton & Bowles,Inc. 10. Dancer-Fitzgerald-Sample, Inc. 11. Lennen & Newell, Inc. 12. Kenyon & Eckhardt, Inc. 13. Compton Advertising, Inc. 14. William Esty Company, Inc. 15. D'Arcy Advertising Company 16. Sullivan, Stauffer, Colwell & Bayles, Inc. '17. Grey Advertising Agency, Inc. 18. Erwin wasey, Ruthrauff & Ryan, Inc. 19. Needham, Louis and Brorby, Inc. 20. Campbell-Ewald Company 21. Campbell-Mithun Inc. 22. Doyle, Dane, Bernbach,Inc. 23. Fuller & Smith & Ross 24. Cunningham & Walsh, Inc. 25. Ogilvy, Benson & Mather, Inc.lO KOCDQOWU‘ItF-LAJNH The questionnaire and a cover letter were mailed to the personnel director of each of the twenty-five agencies. O | "Agency Billings Rank," Advertising Age, February 22, 1961, p. 54. Seventeen agencies replied, fifteen of whom returned a com- pleted questionnaire. CHAPTER II STRUCTURE OF THE PERSONNEL DEPARTMENTS AND GENERAL CHARACTERISTICS OF THE DIRECTORS The first section of this chapter describes the organi- zation of the personnel function of the agencies studied, including how many had established personnel departments, the number of years in operation, how the departments are staffed, and how the personnel function is handled by those agencies not maintaining a personnel department. The second section discusses the characteristics of the director (e.g. sex, age, and education), and the directorS' opinion as to the best education and experience for a position in agency personnel management. SECTION I Number of Agencies Maintaining Personnel Departments Thirteen agencies (76%) of the responding agencies main- tain an organic personnel department. In the remaining four agencies the personnel function is carried on as a supplemen- tary operation by other agency departments. TABLE II—1 NUMBER OF AGENCIES WITH ORGANIC PERSONNEL DEPARTMENTS* Does your agency maintain a personnel department? Number of Agencies Yes 13 (76%) No 4 (24%) Total 17 (100%) * The two agencies declining to answer the questionnaire disclosed that one maintained a department while the other did not. Number of Years the Personnel Departments Have Been in Operation The number of years the personnel departments had been in operation varied considerably. The oldest personnel de; partment was established in 1920. The most recent was founded in 1961. Only two agencies had established personnel de- partments prior to 1950, indicating that the organic personnel department is a relatively recent addition to the agency organization when compared to such traditional departments as media or copy. 10 TABLE II-2 NUMBER OF YEARS THE PERSONNEL DEPARTMENTS HAVE BEEN IN OPERATION X§§£§_ Number of Agencies Less than 1 1 1-3 4-5 6-7 8-9 10-11 12-13 14-15 16 and over Total @0NONHI—‘b—‘l—‘O Not Answered Number and Type of Personnel Department Employees There was a direct relationship between the size of the agency and the size of the personnel department. The largest department maintained a staff of sixteen full-time employees, while the smallest department had only one part-time employee. The median was five. Four different classifications of employees were reported: full-time clerical, part-time cleri- cal, full-time salaried, part-time salaried. The majority of agencies replying to this question maintained only full-time employees on their staff. In the remaining agencies, the 11 personnel department consisted of only part-time employees, with one exception, that being an agency which used a combina- tion of full—time and part-time employees. A comparison between salaried and clerical employees disclosed a ratio of one clerical to one salaried employee. TABLE II-3 SIZE OF THE PERSONNEL DEPARTMENT'S STAFF* Size of Staff Number of Agencies Less than 1 1 1-3 4 4-6 5 7—9 1 10-12 1 13-15 1 16 or more 1 Total 14 Not Answered 1 1% Part-time employees are counted as one—half. How the Personnel Function is Handled by Those Agencies Not Maintaining a Personnel Department Three agencies did not maintain an organic personnel department. Their replies indicated that the personnel func- tion is handled by the joint effort of a number of departments. 12 In one case, the employment and training were handled by a Vice President and an administrative assistant, while bene- fits and payroll were controlled by the agency's treasurer. In another, the personnel department was part of a coordi- nated effort with the office services department, while the recruitment of top personnel was carried out by the President and Chairman of the Board. SECTION II This section describes the characteristics of those directing agency personnel activities. The characteristics include age, sex, number of years in present position, posi— tion title, income, recent job experience, title of immediate superior, educational background and their opinions concerning appropriate backgrounds for entering agency personnel work. Respondents' Characteristics The average director's age was forty-five. All but two were men. The average income for the directors was $23,600 per year. A wide variation was noted in the tenure of service of the various directors; the longest was twenty-four years, the shortest was three months. The average tenure was six years 13 (three years more than the tenure of service for the average agency employee). TABLE II-4 RESPONDENTE' CHARACTERISTICS Ag§_ M§l§_ Female Total Number 30-35 3 3 36-40 1 l 2 41-45 3 l 4 46-50 2 2 51-55 3 3 56-60 1 1 Total 13 2 15 Mean Age 45 years Income Levels (000) NUmber Less than 10 2 10-13 3 14-17 2 18-21 1 22-25 - 26-29 - 30-33 1 34-37 1 38-41 2 42 or over 1 Total 13 th Answered 2 Mean $23,600 14 Years of Service Number 1-4 9 5—8 3 9-12 1 13-16 — 17-20 1 21-24 1 Total r 15 Mean 6 years Prior Job Experience of the Respondents The background of the respondents reveals most to have had previous experience in personnel work. Ten respondents had worked in personnel prior to their present position. Of these, four had worked in a personnel position in the agency in which he is now personnel director, four had held a person- nel position in a corporation, while two had been employed in personnel work in another agency. The remaining five held a non-personnel position in the same agency. TABLE II-5 PREVIOUS JOB EXPERIENCE Previous Position Held by Director Number Personnel Position in Present Agency 4 Non-Personnel Position in Present Agency 5 Personnel Position in a Corporation 4 Personnel Position in Another Agency 2 Total 15 15 Agency Offiper to Whom Directors Report One of the primary factors in determining the authority of fluadepartment head is his position in the agency's chain of command, and the degree to which he is influenced or con- trolled by other officials in the agency. All of the direc- tors stated that they reported to a member of the agency's top management team (President, Vice President, Chairman of the Board, or other agency officers). Seven titles for the particular officer to whom the directors reported were men- tioned. The fact that six directors reported either to the President or to an equivalent officer indicate that the activities of the personnel department are of major interest to the principal executive of advertising agencies. TABLE II-6 AGENCY OFFICER TO WHOM DIRECTORS REPORT Officer's Title Number President Vice-President of Administration Senior Vice President, General Manager Treasurer Chairman of the Board Chairman of Executive Committee Senior Vice President Ull-‘l-‘l—‘wap Total p... 16 Title of Agency Director's of Personnel Activities This study reveals the variation in titles which have been assigned to the director of personnel activities. The most popular titles were Persennel Director, Director of Personnel, and Vice President and Director of Personnel. Each received three replies. If titles have any bearing on the responsibil- ity of the position over twenty per cent of those replying to this question, who were Vice Presidents could be considered among the ranks of tOp management. TABLE II-7 OFFICIAL TITLE OF DIRECTOR OF PERSONNEL ACTIVITIES Title Number Vice President and Personnel Director 3 Director of Personnel Personnel Director Vice President of Administration Personnel Manager Manager of the Personnel Department F1 H‘ F‘ H1 u» w Office Manager Personnel Director and Assistant Secretary 1 Personnel Director and Corporate Secretary 1 Total 15 17 Educational Background of Personnel Director 'nfis section will concern itself with the educational background of the respondents, the undergraduate college attended and curriculum followed by those who attended college, as well as the curriculum followed by those who attended grad- uate school. The section concludes with the directors' recom- mendation as to the best education and experience for a person interested in agency personnel work. A formal education background of the sample group is presented in Table 11—8. It can be noted that the entire sample luas graduated from high school, and that twelve attended and graduated from college. Five did graduate work, one of whom received an advanced degree. TABLE II-8 EDUCATIONAL BACKGROUND OF THE SAMPLE GROUP Education Number Bachelors Degree Only 7 Bachelors plus Graduate Courses 4 Ph.D. 1 Total 12 No College Education 2 No Reply 1 18 Undergraduate Colleges and Universities Attended by the Respondents No single conference or group of universities (Big Ten, Ivy League, etc.) proved to be more popular than any other. It was anticipated that the Ivy League would make the strong- est showing, in view of the allegation that Ivy Leaguers tend to dominate the agency field; however, this is not the case as far as agency personnel administration is concerned. The only school that was attended by more than one of the respond- ents was Northwestern. TABLE II-9 UNDERGRADUATE COLLEGES AND UNIVERSITIES ATTENDED BY THE RESPONDENTS College or University Attended Number Yale 1 Dartmouth University of California University of Maryland Baker University Northwestern Spanior College Brooklyn College University of North Dakota N.Y. U. F4 F4 F‘ F1 F1 R) F4 F‘ F‘ F‘ Haverford College Total l-' DON No Reply 19 Undergraduate Curricula Followed by the Respondents The undergraduate academic curricula followed by those who attended college varied little, as seen in Table 11-10. The main areas of concentration were in Business-Commerce and Liberal Arts. These two curricula included ninety-two per cent of all curricula mentioned by those who attended college. Fifty per cent majored in Liberal Arts, forty-two per cent in Business, and eight per cent in Engineering. The specific majors followed by the respondents receiving degrees in Lib- eral Arts varied considerably. The opposite trend was noted in those who received degrees in Business, nearly all the Bus- iness respondents received a general businesss background, rather than specific degrees in such areas as marketing or personnel. TABLE II-1O UNDERGRADUATE CURRICULUM FOLLOWED BY THOSE WHO ATTENDED COLLEGE Curriculum Followed Number Liberal Arts 6 50% Psychology (2) 16% Political Science (1) 8% English (1) 8% Sociology (l) 8% Economics (1) 8% Business-Commerce 5 42% Engineering 1 8% Total 12 100% No Reply 3 20 Respondents Who Have Had College Courses in Psychology and Personnel The term ”curriculum” has a fairly wide meaning and does not necessarily indicate specific courses taken at the college level. Therefore, two questions were included to determine whether or not any of the respondents had received course credits in psychology or personnel. Six of the directors had, at one time or another, taken college courses in personnel, while eleven of the respondents received college credit for courses in psychology. TABLE II-ll RESPONDENTS WHO HAVE TAKEN COLLEGE COURSES IN PERSONNEL OR PSYCHOLOGY Courses Number Psychology 11 (78.5%) Personnel 6 (43%) Graduate School As noted in Table 11-8, five of the respondents attended graduate school, although only one received an advanced degree. The curricula followed by those who attended graduate school 21 were all different: Personnel Administration, Banking and Finance, Advertising, and Law. The one graduate obtained a Ph.D. in Psychology. General Advice on Education and Experience for Agency Personnel WOrk The respondents were asked to give their opinion as to the kind of education and experience which would be most appropriate for agency personnel work. A large number of respondents took advantage of this opportunity and gave some very interesting comments. The attempt was made to select representative answers from the group and only those which elaborated on the general advice obtained from the survey. Experience in an agency (not necessarily personnel). To be able to understand the workings of an agency. Experience in handling people at an individual level, since placement and problems are individual rather than aggregate as a general rule. Experience (and/or training) in indoctrination and training procedures. Education: Personnel Orientation-Psychology. Experience: Job exposure to top management. Varied department background in Media/Research. I'm not convinced that education plays an essential role in successful agency personnel administration. . . believe following characteristics are important: sensi- tivity to people, objectivity, good business sense, good human relations, thoroughness, and imagination. Education: Business Administration with special courses in personnel and psychology. 22 Liberal arts undergraduate. At graduate level personnel and psychology. Experience: all phases of interviewing, employment, training, wage and administration. I cannot help but feel that the composition of my own educational background is a most desirable one to recom- mend. It consisted of a general business administration major, with courses in advertising, psychology, sociology, marketing, accounting and economics. This provided the basic understanding I have needed to properly understand and serve the extreme variations in personalities and occupations that exist in agencies. I have added to this academic background the learning about specific areas of testing, systems, etc., required by the jobs I have held. Experience—wise, the best teacher is a business that employs a lot of people, with a variety of positions. A progressive, aggressive marketing-advertising minded com- pany like P&G is an example. This could also be a large reputable retailer. I'm not sure starting in an agency would be best. To survive in a business like an adver- tising agency, I think a personnel executive needs to come in with a good solid reputation that isn't watered down by the image of having learned the job there. Education: A combination of psychology and economics or business will be most helpful. Experience in all phases of personnel is a must. Direct agency experience is not necessary. Education: Liberal Arts (broad cultural base) plus a number of technical personnel courses (salary administration, etc.). Experience: Early part—time or summer sales experience four or five years over all agency training progressing to position of Account Executive. Education: Should be a college graduate (minimum). Experience: Background in administrative work. 23 a. Training in sales and marketing principles b. Training in communications c. Training in public and community relations d. Experience in trade e. Experience in personnel operations There seems to be two schools of thought about this, both of which are supported by success. One is to get an MA degree in Personnel Administration, including substantial courses in Psychology and a course in Test- ing. The other school of thought is that practical experience is more important than theory. In this case, the man starts in a business and after substantial expe— rience and with natural judgment, liking of people, and a sound though perhaps broad college education, moves into the Personnel Department. A liberal education with emphasis on social sciences (especially Sociology) courses which develop skill in writing would be important. So would a course in Busi- ness Statistics. I think anyone in this field can bene- fit from having had a variety of jobs and exposure to people of all social and economic levels. Professional training and experience outside agency field in manufacturing or major retailing highly desir- able before an agency assignment. Liberal Arts background. I believe the man should have a rather broad background in the agency business with supervisory experience in his background. These comments indicate no uniformity of opinion as to the best background for an agency personnel director. Most of the respondents favored backgrounds similar to their own. Liberal Arts and Business Administration were favored as the best edu- cation for the position, while agency background and/or expe- rience in personnel provide the best practical experience. CHAPTER III AGENCY PERSONNEL POLICIES AND PRACTICES This chapter presents the findings related to agency per— sonnel policies and procedures in three broad areas: procure- ment, training, and administration. The first section sets forth the practices of agencies in the vital area of manpower procurement: What are the charac- teristics desired in new employees? Where are they obtained? What procedures are followed? In the second section, agency training policies are the focus of attention: Are training programs used? For what kind of employees? How long do the programs last? Are col- lege internship plans worthwhile? The last section concerns itself with the administrative functions normally carried on by personnel departments: job description, job evaluation, central personnel files, health and benefit programs, vacations, and compensation. Procurement Agencies utilize a variety of sources in their staffing function. In many of the large agencies, it is not uncommon 24 25 to find all of these sources being utilized to gain personnel: a. friends of present employees b. former employees c. college recruiting d. employment agencies e. newspaper ads f. business and trade paper ads g. voluntary applicants h. professional associations 1. selective recruiting In order to determine the frequency and importance of the various sources, the directors were asked to rank the sources used in order of importance. Referrals from staff members within the agency seemed to be the most popular supplier of salaried personnel, voluntary applicants ranked second, while employment agencies filled the third position. These rankings may not reflect actual conditions for two reasons. The sources are not mutually exclusive, e.g., referrals from with- in the agency could also come under selective recruiting (pi- rating). Second, it is often the practice of various depart- ment heads to recruit their own specialists, and do their own training. The personnel department may only process the candidate and not be familiar with how he was obtained. 26 TABLE III-l SOURCES OF SALARIED AGENCY PERSONNEL* Source Total Points Referrals from agency staff 26 Voluntary applicants 23 Employment agencies 18 Selective recruiting (pirating) 10 College recruiting 8 Newspaper ads Former Employees 1 *Tabulation based on point system, three points for first place, two for second place, and one point for a third place rating. College Recruiting Many advertising leaders have strongly advocated that college recruiting be utilized to a greater degree by adver- tising agencies. Relevant questions concerning agency col- lege recruiting were included in the survey. Do agencies recruit from colleges? How many universities were visited last year by agency representatives? Which universities? What percentage of new salaried employees were gained through college recruiting efforts last year? Ten of the fifteen agencies responding do college recruiting. These agencies made seventy-seven visits to 27 college campuses last year. The number of universities visited per agency varied from two to thirteen. TABLE III-2 NUMBER OF SCHOOLS VISITED LAST YEAR BY AGENCIES DOING COLLEGE RECRUITING Number of Number of Schools Visited Agencies 2 2 5 l 6 1 7 1 8 l 10 1 l3 3 Total 77 10 Eight of the ten agencies who did college recruiting listed the universities visited by their representatives last year. Twenty-nine universities were visited. Harvard, Columbia, Princeton, Dartmouth, Stanford, and NOrthwestern were visited most, each playing host to recruiters from four agencies. Regional boundaries were not respected by the agencies. Eastern and Mid-western agencies visited college campuses in the other's "area,' (e.g. Princeton was visited by four 28 agencies, three of which were Mid-western based, while Michigan State was visited by three agencies, two of which were Eastern based). Two agencies reported visiting women's colleges. One stated that it did not visit campuses but did contact college placement bureaus. TABLE III-3 UNIVERSITIES VISITED BY AGENCY RECRUITERS Number of Agencies Univergity Visiting* Harvard 4 (BAAA) Columbia 4 (AAAA) Princeton 4 (BBBA) Northwestern 4 (BBAA) Dartmouth 4 (AAAB) Stanford 4 (AAAB) Michigan State 3 (BBA) Michigan 3 (BBA) Virginia 3 (AAA) Chicago 3 (BBA) Syracuse 2 (BA) Yale 2 (BB) Missouri 2 (AB) Pennsylvania 2 (AA) Texas 1 (A) Colgate l (A) N.Y.U. 1 (A) 29 Brooklyn College (A) (A) (A) (A) (B) (B) (B) (B) (B) (B) (A) (B) Boston University Pratt Institute Pace College Illinois Notre Dame Wisconsin Miami of Ohio DePauw Purdue C.C.N.Y. Indiana u la (a is be P4 F4 F‘ F1 F‘ P‘ H‘ H \1 Total * A - Eastern Based Agency B - Mid-western Based Agency Of the ten agencies who did college recruiting, seven listed the percentage of their new salaried employees gained through this method last year. The percentages varied from two to twenty-five. TABLE III-4 PER CENT OF NEW SALARIED EMPLOYEES GAINED THROUGH COLLEGE RECRUITING Per Cent Number of Agencies Under 10 10-25 Over 25 Total muchu No Reply 30 The attitudes of the respondents toward the value of college training, as well as specific curricula were also ascertained (e.g. Liberal Arts/Business Administration, Under- graduate/Graduate). The directors are strongly in favor of a college degree as preparation for agency work. However, they expressed rela- tive indifference as to whether the graduate majored in Lib- eral Arts or Business Administration. This finding is indic- ative of the specialized nature of large agencies, where both Liberal Arts and Business Administration graduates are nec- essary (e.g. Art and Copy—Liberal Arts, Account Management— Business Administration). The reaction toward the holder of advanced degrees is mild indeed. Only three agencies indicated that they would give hiring preference to such degree holders, thus indicating the general indifference of the respondents toward graduate education. 31 TABLE III-5 OPINIONS OF THE RESPONDENTS CONCERNING HIRING PREFERENCE TO POSSIBLE SALARIED APPLICANTS ACCORDING TO THEIR EDUCATIONAL TRAINING WOuld You Give jg; Hiring Preference To: Yes Np_ Reply Total College Graduates ll 2 2 15 Liberal Arts Graduates 5 3 7 15 Business Administration Graduates 4 3 8 15 Holders of Advanced Degrees 3 3 9 l5 Respondents' Hiring Preferences The respondents were asked to state their hiring prefer- ences for salaried positions between men and women, married and single prospects, and applicants in various age groupings. It would appear that women, even with "equal qualifica- tions,‘ have a difficult time entering the agency world. Six of the respondents stated they definitely preferred males when hiring employees for salaried positions; none of the respond- ents stated they preferred females, while nine stated they held no preference. With regard to the marital status of candidates for salaried positions, twelve respondents stated they held no preference, two preferred married persons, while one said he preferred single prospects. 32 The question of the age characteristic was structured to include four age groups; under 25, 25-35, 36-45, and over 45. It was found that seven directors favored prospective salaried employees in the 26-35 age bracket, one preferred those from 36—45, and seven expressed no preference. TABLE III-6 HIRING PREFERENCES OF THE RESPONDENTS Hiring Preference Between Men and WOmen With Equal Employment Qualifications Would Give Preference in Hiring To: Number Male 6 Female 0 No Preference 9 Total‘ 15 Preference Between Single and Married Prospects Would Give Preference in Hiring To: Number Married Prospect 2 Single Prospect 1 No Preference 12 Total 15 33 Hiring Preference Between Various Age Groups would Give Preference in Hiring To: Number Under 25 0 25-35 36—45 Over 45 No Preference U'l\lOl-'\l Total 1 Desirability of Advertising Courses in the Background of Prospective Salaried Employees The value of specialized courses in advertising is often discussed; however, no study has been undertaken to determine the opinions of those responsible for the hiring of agency employees. The directors were asked their opinions concern— ing specialized courses in advertising. All but one favored such "specialization" as indicated in the comments below: There is an advantage in hiring a man with specialized training in marketing. However,creative people with a good broad educational background seem to do as well as the person with a specialized advertising background. Yes, but are not as important as practical experience. For special positions, i.e. market research, courses in economics, psychology are important. In some fields; yes, such as art, research, and possibly copy. The M.B.A. degree is becoming more valuable to candidates for account executive jobs, but here the de- gree is secondary to ability and business experience. 34 No, experience has shown us that we must "unlearn" much which a new man has learned in these courses. we prefer to teach advertising our way. Our candidates must have a broad spectrum of education and understanding of mar- keting practice, not advertising techniques. 'Yes, but not to the exclusion of other important educa— tional preparation. The tendency I have noted in adver- tising curriculum is to provide such a broad and varied area of study that the student comes out so well-rounded he has difficulty fitting into the specialities of adver— tising, which is the reason he took a specialized course in the first place. I feel the advertising curriculum should be divided rather precisely into creative and non- creative course structure so that proper emphasis can be given to these two basic areas that are most apparent in the jobs that exist in agencies. With this dual course focus, better direction can be given to the types of courses that should be taken preparatory to the selection ofcg creative or non-creative advertising major. O.K. if they do not take too much time away from liberal arts courses--we consider courses in literature, sociology, history, etc., of greater value. Yes, an indication that an applicant probably made up his mind at an early age what he wished to do. He is not "vague" about opportunities in the field. Yes, it denotes a basic interest in the advertising field. Yes, if he also rounds out his education with cultural courses as well as the social sciences. Additional Procurement Procedures A concern of this study was to determine what steps were followed by the agency after the initial contact was made with the salaried prospect. The respondents were asked to compare their program to a standard program followed by many large corporations, as follows: 35 A brief interview to determine quickly if the candidate is a likely prospect for hiring. Application form to provide pertinent personnel data. Issuance of mental examinations. Further interview to determine area of applicants' interest, qualifications, and background. Hiring or rejection. Induction to job or training program and prepara- tion of proper personnel payroll records. The majority of the responding agencies follow procure- ment programs similar to those of industrial corporations. The chief difference between the agency and corporate pro- I//gram was the stress on multiple interviewing and approval by V \. \‘ the appropriate department head (e.g. art directors interview applicants for positions in the art department, copy chiefs interview applicants for the copy department). A typical example of an agency procedure is as follows: a. b. l \k Application form or resumé. Brief interview by Personnel Director to determine if the prospect is a likely candidate. Issuance of mental exams. Interview by supervisor and department head. George Terry, Principles of Management(Homewood, Illi- nois, R. D. Irwin, 1950), p. 231. 36 e. Hiring or rejection. f. Induction to job and preparation of records. Four respondents varied the order of the procedure and did not use mental tests. The number of persons involved in the hiring of an appli— cant varied considerably. One agency involves twelve persons when hiring candidates for high level positions, while all the agencies required at least two persons to pass a salaried applicant. The personnel director, department heads, group super- visors, and senior account executives were named by many agen- cies as those who influence the decision as to whether an applicant will be hired or rejected. Of these the department heads make the final decision in most agencies. In those agencies using mental testing it was discovered that two types of tests were given each applicant. H0wever, there was little uniformity among the agencies in regard to the types of tests administered. Three agencies reported using a combination of intelligence and aptitude tests, two used personality plus aptitude, another used an attitude and interest test, etc. Apparently, the use of tests by agencies is still in an exploratory stage. 37 Training Perhaps one of the primary reponsibilities of a personnel department is the establishment of a workable training program for new company employees. This section seeks to determine whether or not the responding agencies have instituted a training program for their employees, and if so what type of program is employed. It is also hoped to determine the direc— tors' attitude toward a college internship program, and whether or not their agency is now employing one. All but three of the responding agencies have instituted an organized training program. TABLE III-7 NUMBER OF RESPONDING AGENCIES MAINTAINING TRAINING PROGRAMS Does Your Agency Have a Training Program? Number Yes 12 No 3 Total 15 To classify the programs, the questionnaire contained the training programs listed by Barton in Advertising Agency Opera- tions and Management: a. Master and apprentice. Here the beginner is assigned to assist an experienced copy writer or account executive. b. 38 _Department routing. The beginner spends several weeks or months in various departments such as pro- duction, research, traffic, media, and sometimes copy and art. He is indoctrinated in this process, and also has an opportunity to show what special inclina- tions he may have. He may be allowed to contribute ideas or prepare complete advertisements which he may submit to the creative executives. Lecture series. The beginners meet periodically to hear talks by department heads about functions and operation of their department. A question-answer period usually follows the talk. Junior discussion group. The beginners are organized into a group with a chairman or leader chosen from among their own number and meet periodically to dis- cuss problems and operations, usually with an experi- enced executive to answer questions. Junior project group. The group works on specific projects involving the solution of either actual or hypothetical agency problems, and the results are sub— mitted to an executive for appraisal and criticism. Department training. This is different from the sys- tem of departmental routing in that the beginner gets his preliminary training in only one department instead of several. Some agencies prefer the research department for this purpose, others production, others traffic. While in the department, he works as a mem- ber of the department, not as a trainee for another and different kind of job. He may stay in this depart- ment from six months to a year or more. Reading course. A list of advertising books and busi— ness papers is made available to the beginners, who get specific reading assignments on which they are given oral or written tests by one or more executives. Review Meeting. Beginners attend regular meetings, usually one a week, conducted under the leadership of an experienced executive, at which various aspects of 39 the agency's work are reviewed such as individual campaign plans for new accounts and new-business solicitations. Six agencies used two or more of the above training pro- grams to fit their needs, while the remaining agencies used only one type. A combination of Department Routing, Depart- ment Training, and Lecture Series proved to be the most popu- lar combination for the former group, while a program of Department Training was utilized most by the latter group. TABLE III-8 COMBINATION TRAINING PROGRAMS VS. SINGLE TRAINING PROGRAMS Type of Training Program Number Combination of Training Systems 6 Single Training System 6 Total 12 No Reply 3 Roger Barton, Advertising Agency Operations, and Mangge— ment (New York: McGraw Hill, 1955), p. 212. 40 TABLE III-9 AGENCY TRAINING PROGRAMS Type of Training PrOgram Number of Agencies Using Department Routing 7 Department Training 7 Lecture Series 4 Junior Discussion Group 2 Master Apprentice 2 Review Meetings 2 Junior Project Group 1 Reading Course 1 Observation Without Participation 1 No Reply 3 The length of the training programs varied depending on the agency, and the program employed. The longest program lasted from two to three years; the shortest, three to nine months. Most of the agencies were not definite in replying to this question; either they listed a broad period or they stated that the training program time period varied with the type of work for which the person was being trained. Five agencies follow a policy of sending their employees to colleges or professional schools for further training. Thus not all of the employee training takes place within the agency. 41 All of the agencies provided an introductory booklet for prospective and new employees. While these findings indicate nearly all large agencies maintain organized, well-developed training programs, it is interesting to note the results of an A.A.A.A. study conducted in 1956 to find out how many member agencies had training programs, and what kind of programs they had. Only one—quarter maintained organized, well-developed training programs. Another quarter used only informal train- ing activities, while the remaining half reported no training or educational activities at all.3 The personnel manager of a major agency which has had a formal training program in operation for the past four years explains that management decided on the training program after the agency did a turnover study. The study indicated there was fifty per cent greater turnover in people hired from the outside than with people trained by the agency. The agency proved to itself that in the long run, though the agency training program is a heavy financial expenditure, the end result saves the agency money in lower turnover and better trained people. 3 , . . . . . "Training and Picking Ad Men," Advert1s1ng Age, August 3, 1956, p. 23. 42 Internship,Plans One means of aiding college students to acquire actual experience in their desired field of work is a system whereby the students attend college for a period of time and then work in their actual field for a period of time. This cycle may be repeated until the students complete their degree programs. The system may take many forms, including part-time guided work with a suitable firm, arranged summer employment, or some combination of thesetwo. The arrangement is agreed upon by the school and the participating agency. This is commonly referred to as an internship plan. The respondents were questioned concerning the desir- ability of such a program, how it could be carried out, and whether or not their agency is presently utilizing an intern program. Six directors favored internship programs, seven doubted their value, and the remaining two did not feel such a pro- gram should be included in agency operations. Five agencies employ an internship program at this time. Of the six agencies favoring an internship program, three (felt that the summer was the most appropriate time, the rest stated an internship could be programmed at any time during the year. 43 TABLE III-10 RESPONDENTS' OPINIONS ON THE DESIRABILITY OF AN INTERNSHIP PLAN FOR STUDENTS WHO HAVE A VOCATIONAL INTEREST IN ADVERTISING Do You Think An Internship Plan is Desirable? Number Yes 6 No 2 Doubtful 7 Total 15 TABLE III-11 AGENCIES MAINTAINING INTERNSHIP PROGRAMS Does Your Agency Have An Internship Program? Number Yes 5 No 10 Total 15 44 TABLE III-12 OPINIONS OF THE RESPONDENTS WHO RECOMMEND AN INTERNSHIP PLAN AS TO WHEN THE TRAINING SHOULD TAKE PLACE When Should the Training Take Place? Number During School Year 1 During Summer Vacation All Year Total \JQNW No Reply Administration What tools of personnel administration do agencies use? These tools include job analysis, job description, job evalu- ation, central personnel record file, health and benefit pro- grams, and enlightened vacation and compensation policies. This section seeks to determine to what degree the agencies in the sample are utilizing these tools of personnel administration. Job Analysis and Specifications Job analysis consists of a detailed study of every task in the agency to find out just what is done, how it is done, and who does it. A job specification puts the results of the analysis in a form that agency management can use to improve the handling of personnel. They make it easier to select good 45 applicants, for the interviewer knows exactly what qualifica— tions the new employee must have. They show just what train— ing is needed for every job. The lines of promotion into and out of jobs are indicated or established and job specifications make possible job evaluation. Eight of the respondent agencies used job analysis and job descriptions as part of their personnel administration procedures, while seven did not. Indicating an approximate one-to—one ratio. TABLE III-13 INCIDENCE OF JOB ANALYSIS AND JOB SPECIFICATIONS IN AGENCY PERSONNEL ADMINISTRATION Technique Used Yes Np Totals Job Analysis 8 7 15 Job Specifications 8 7 15 Central Personnel Record File Another administrative tool that has proven to be of value to personnel operations is the central personnel record file. Such a file provides a running account of employment history, thereby giving the personnel department a clear pic— -ture of each employee's progress. All of the agencies maintain 4Terry, op. cit., p. 238. 46 such a record, thus making the record a practical necessity in agency personnel departments. TABLE III—14 INCIDENCE OF CENTRAL PERSONNEL RECORD FILES IN AGENCY PERSONNEL ADMINISTRATION Does Your Agency Maintain a Central Personnel Record File? Number Yes 15 No 0 Total 15 These records usually include ten elements when employed in large corporations, they are: a. Application form b. Interview results c. Mental and physical test results d. Training received e. Progress reports f. Wage advances g. Transfers and promotions h. Accident and sick leaves i. Disciplinary notations j. Result of exit interview5 Eight of the agencys' records included all of the ele- ments mentioned above. In those seven agencies which did not include all of the elements in their records, it was discov- ered that the elements of training received, result of exit interview, and disciplinary notation were excluded most. 5Terry, op. cit., p. 239. 47 While the application form and transfers and promotions were found to be included in all of the personnel records. TABLE III-15 ELEMENTS OF AGENCY PERSONNEL RECORD Elements of Record Agencies Having Element Application form 15 Interview results 12 Mental test results 13 Training received 8 Progress reports 12 Wage advances 12 Transfers and promotions 15 Accident and sick leaves 14 Disciplinary notations 12 Result of exit interview 9 Health and Benefit Programs The installation of various health and benefit programs in an organization has proven to be one of the best methods for lowering employee turnover. These programs also tend to foster employee initiative and provide an incentive for remaining with the company. There would seem to be a need for such programs in an industry such as advertising which has been plagued with high employee turnover. It was found that 48 all of the agencies maintain a health and benefit program in one form or.another. TABLE III-16 INCIDENCE OF HEALTH AND BENEFIT PROGRAMS IN AGENCY PERSONNEL ADMINISTRATION Does Your Agency Maintain A Health and Benefit Program? Number Yes 15 Total 15 Seven programs have proven themselves quite successful in other fields and have become standard in most large indus- tries, they are as follows: a. Medical attendant on the premises b. Group insurance. c. Profit sharing d. Hospitalization e. Pension plans f. Stock participation 9. Bonuses Six of the agencies included all of the above in their Health and Benefit Programs. Three of the programs, profit sharing, hospitalization, and group insurance were utilized by all the agencies. Bonuses, pension plans, and medical attend- ant on the premises, were excluded in most of the nine agencies 6Ibid., p. 240. 49 TABLE III-17 INCIDENCE OF VARIOUS ELEMENTS OF HEALTH AND BENEFIT PROGRAMS Programs Number of Agencies Medical attendants on premises 2 Group insurance 15 Profit sharing 9 Pension plans 15 Hospitalization 15 Stock participation 11 Bonuses 8 Vacation Policy All of the agencies maintained a vacation program based upon the length of tenure of the employee. The majority divided the length of tenure in time periods of less than one year, one year, and five years. After the fifth year the divi- sions varied, some agencies placed the next division at ten years, others twenty, and twenty—five. In terms of the length of the vacations,all of the agencies gave one day for each month of employment for those working less than one year, two weeks for those employed from one to five years, and from three to four weeks thereafter. All of the vacations were with pay. By granting generous vacations with pay based on length of tenure, these agencies provide an incentive for their employees to remain with the agency. 50 Compensation Relevant questions were included in the survey to ascer- tain the agencys' policies regarding compensation. What is the starting salary for recent college graduates entering agency work? Who determines the agencys' wage level? What method is employed in setting salaries? The graduating college senior who seeks employment in advertising may expect to begin work at a minimum of $250 per month. In the opinion of the group, the starting salary which should be expected ranges from $376 to $400 per month. This latter range closely approximates the average starting salary for graduates in advertising at Michigan State University which is $411 per month.7 7"Four Jobs for Every Ad Graduate," Advertising Age, December 17, 1961, p. 61. 51 TABLE III-18 STARTING SALARY FOR COLLEGE GRADUATES APPLYING FOR POSITIONS IN ADVERTISING AGENCIES Starting Salary Per Month Number 250-275 1 276-300 1 301-325 0 326-350 1 351-375 2 376-400 3 401-425 1 426—450 3 451-476 2 Total 14 No Reply 1 In eight of the agencies the wage level for job cate- gories was determined by the personnel director. In the remaining seven agencies, the level was structured through the coordinated efforts of the personnel director and other agency executives. These executives included the Vice President of Finance, department heads, general managers and special salary committees. Twelve agencies used a combination of methods to determine agency wage levels, while the remaining four employed only one method. The prevailing wage level in the industry and the prevailing wage level in the area were most popular. 52 do TABLE III-19 METHODS UTILIZED IN DETERMINING) AGENCY WAGE LEVELS Method Number of Agencies Prevailing wage level in the industry 12 Prevailing wage level in the area Job evaluation Tradition in the agency Arbitrary decisions l—‘NNU‘IO No Reply What is the Status of Agency Personnel Management Today, and What Will it be in 1972? The final question in the survey asked each respondent to give his opinions concerning both the present status of personnel management in agencies, and also, what it would be ten years from now. The following replies were selected: The last six years has seen a notable increase in the number of accredited Personnel Departments in the agency field. Most have gained in status and participation. I believe this trend will be accelerated in the future. Varies considerably from agency to agency. In many, position carries title little authority--in mine it's important because of support by top management. In ten years, more agencies should have the well—rounded per— sonnel operations we see in most large non-service organizations today. 53 Right now it goes all over the map. An agency personnel manager can be anywhere from a clerical placement service to office manager to Director of Personnel. As agencies grow larger it will undoubtedly become more important. Centralized control is a prerequisite to bigness. Personnel Management in agencies is a vital function if management recognizes the long term objective of manage- ment and talent development. This can only be done if the target is enforced and if programs and procedures are created with this in mind. The agency business itself cannot progress within the next ten years unless a higher caliber and better qualified personnel management is introduced, encouraged and developed. This depends entirely on agency size. The larger the agency, the greater the opportunity. Very low status in most agencies (limited to clerical recruiting and record keeping). Much more influential in next ten years as authority in executive recruiting and formal personnel administration measures. This depends upon size of agency. However, in a personal service business--the Personnel Department should continue to be a key factor in: selection, recruiting, and training of employees. I think agency management expects genius results from non- career personnel staff, operating with too little manage- ment recognition and budget support. Personnel Management is now occupying an important role in most large agencies. This has come about through the needs of the agencies and has won acceptance through the noticeable improvements it has brought to the process of better selection and better retention of better people. Personnel Management in agencies has a very bright future and will make noticeable strides in the advertising agency field in the next ten years. In most, not good--should be better in ten years. 54 Personnel management is becoming more recognized as a necessary part of agency management and is expanding its role continuously. In ten years I think it will be comparable to the position it now has in most industries. CHAPTER IV SUMMARY The purpose of this study was to ascertain the present status of personnel administration in the nation's largest advertising agencies. A review of recent literature in trade publications revealed that manpower is one of the most impor- tant problems facing agencies today. Advertising expendi- tures have quadrupled, from three billion dollars after WCrld war II to twelve billion dollars in 1961. Agency operations have become vastly more complex. As a consequence, a man- power shortage evolved which manifested itself in the unhealthy game of "musical chairs,‘ whereby agencies pirate each other' to gain needed employees. Such practices are harmful to agen- cies as well as employees. To confront the dilemma there is a need for professional personnel management and application of modern personnel practices. The findings of this survey reveal that the management of the largest agencies are increasingly recognizing the value of the personnel function as indicated by the finding that twelve of the fifteen agen- cies studied now maintain an organic personnel department. Only four had such a department in 1950. 55 56 The size of these departments were directly related to the size of the agency. The largest department maintained a staff of sixteen full—time employees, while the smallest employed only one. The average number of employees per department was seven. The directors of the agencys' personnel function seemed well qualified for their position by virtue of previous expe- rience in personnel work (more than two-thirds were employed in personnel immediately before becoming the agencies' top personnel administrator). Twelve of the fifteen directors were college graduates, a large percentage of whom had courses in personnel and/or psychology. Their position in the agency is one of importance and responsibility, borne out by the fact that all reported directly to top management. A profile of the "average" director is a man aged forty- five, married, a college graduate, earning $23,600 per year. He is head of a department of six employees, and has held this administrative position for a period of six years. His title may be Vice President and Director of Personnel, Personnel Director or Director of Personnel. The directors expressed no consensus of opinion as to either the "best" education or ”best" experience for personnel work. The majority favored college training in liberal arts 57 or business administration. Most felt that prior experience in personnel work, either in agencies or other firms was desirable. The primary sources of new salaried employees, in order of importance were, referrals from agency staff members, voluntary applicants, employment agencies, and selective recruiting ("pirating"). College recruiting, although not yet a major procurement source,, is gaining in importance. In 1961 ten of the agencies made seventy—seven visits to twenty- nine universities. The directors were strongly in favor of a college back- ground as preparation for agency work, preferably with course- work in liberal arts or business administration including courses in advertising. The administrative steps following initial contact were similar in all the agencies and generally corresponded to pro- cedures employed in large industries. The agency program is as follows: a. Application form or resumé. b. Brief interview by Personnel Director to deter- mine if candidate is a likely prospect. c. Issuance of mental exams. d. Depth interview by appropriate department head. e. Introduction to job and preparation of records. 58 For most positions, this procedure provides adequate screening through the selective techniques of resumés, mental tests, and extensive personal interviews. Perhaps one of the primary responsibilities of';person- nel departments is the establishment of a workable training program for new company employees. These programs tend to better employee morale and forestall employee turnover. It was discovered that all but three agencies maintained an organ- ized training program. This is a definite step forward when compared to the finding of a study undertaken by the A.A.A.A. in 1956 at that time less than half of the A.A.A.A. members maintained an organized training program. The most popular programs employed by the agencies in this study were Depart- ment Routing and Department Training. Department Routing was utilized by four agencies, Department Training was employed by three, while four used a combination of both programs to fit their training needs. The length of the programs varied, depending on the agency, the program employed and the trainee's needs. The longest program lasted three years, while the shortest lasted only three months. College internship programs are now employed by one-third of the agencies, and it would appear that the concept is growing in popularity. 59 A comprehensive system of personnel control, which includes, among other things, adequate job analysis, position description, and central personnel records, is perhaps the best method for effective utilization of existing manpower within the agency. The findings of this study reveal that more than half of the large agencies have instituted programs of job analysis and position descriptions. All the agencies maintain central personnel records. The installation of various health and benefit programs, adequate vacations plans, and just wages are excellent methods of attracting and keeping talented personnel in agencies. All of the large agencies have instituted health and benefit programs in one form or another. Such programs included pen- sion plans, profit sharing, stock participation, hospitaliza- tion, group insurance, and employee bonuses. The vacation policies of the agencies were remarkably similar; all offered vacations with pay based on tenure of employee service. Salaried personnel employed less than one year received one dayis vacation for each month they were employed. Two week vacations for those employed from one to five years, and three to four weeks thereafter. The starting salary for recent college graduates averaged from $376 to $400 per month. The primary methods used in 6O determining wage levels in all classifications of agency posi- tions were the prevailing wage level in the advertising indus- try and the prevailing wage in the city in which the agencies were located. Divergent views were expressed concerning the present state of agency personnel management. Some felt that personnel management had low status in agencies, being used only to recruit clerical employees and compile personnel records. Others expressed the view that personnel management was growing in importance and responsibility and would soon be on the same plane it holds in industry. Without exception, all of the directors felt that in ten years the position held by agency personnel management would be improved to the point of being responsible for all the agencies procurement, training and personnel administration. Agencies appear to be making an effort to place the per- sonnel function on a plane with major corporations in the development of a total personnel program; organic personnel departments staffed with competent employees, utilizing the tools of personnel management in recruiting, training, and administering the agencies' human resources. By adhering to such a program agencies are making an important step forward in solving the manpower problem. APPENDIX MICHIGAN STATE UNIVERSITY East Lansing -.- «“4 .- “m- u - *5- College of Communication Arts . Department of Advertising July 27, 1952 Dear Sir: We are making a study of how agency personnel people feel about agency personnel practices, their own particular jobs, and a number of other things.. By means of this study, we aim to increase the general under- standing of advertising personnel practices. In order to do this successfully, we must have your help. You who work in personnel administration are the only ones who can tell us accurately what your reactions to this work are. And don't worry about being quali- fied to help us-~you are. Enclosed you will find a questionnaire. We have tried to ask those questions which will be most reliable and meaningful. Naturally, we hope you will express yourself very frankly and fully. You are asked to identify yourself; however, the reputation of the Department of Advertising depends on our keeping your individual replies in strict confidence. The reports issued on this study will deal only in terms of groups of people in which no single individual or agency can be identified. It is highly important that you answer every question. Preliminary testing indicates that completion of the questionnaire will probably take less than 20 minutes. We shall be very grateful to you for your cooperation in this work which seems to us to have a valuable potential. Your assistance may provide answers which will benefit all those who are in this vital and little publicized area of agency operations.. Sincerely yours, MAM/If? (£th ‘75 e ward L. Atkins Assistant Professor James Ellerbrake Graduate Assistant Enclosure P.S. ‘A self - addressed envelope is attached for your reply. SURVEY pg PERSONNEL PRACTICES g: SELECTED ADVERTISING AGENCIES CONFIDENTIAL - The identity of persons responding to this questionnaire, and their agencies, will not be revealed to anyone. The study is conducted under the supervision of the Department of Advertising, College of Communication Arts, Michigan State University. SECTION I - Personal data of the director of personnel activities: What is your name and title? _y; ._ __ . Who do you report to? (title) . How long have you held your present position? ..' What was your position immediately before becoming director of personnel - activities? - ° ~ _— What is your age. Marital Status? Approximate yearly income; ___ Education: 1. Circle the last year of regular school you completed - High School 9-10-11-12 College 13-14-15-16 What colleges did you attend? .f What major cflrriculm.did you follow (e.g. Liberal Arts-Psychology; Business and Economics-Marketing) ___ . Did you take courses in personnel administration? Yes No Did you take courses in psychology? Yes No 2. Graduate Studies: Yes No School . .. In what area did you specialize? __L". . . Did you receive a degree? Yes No What degree? . Are you presently taking any graduate courses? Yes No In what area? _. Please state the kind of education and experience that you feel is most apprOpriate for an agency personnel director? 0.. m —‘—- *‘ - soo..-“ *-m—Mcmuu w ~—- ~. ‘0 - --—.-h--..~.--.~sa 40..-; SECTION II - The personnel department: Does your agency maintain a personnel department as a separate entity? Yes No Year organized? If your agency does not maintain a separate personnel department where and how is the personnel function handled? ___ How many persons are employed in personnel work? Clerical part time Clerical full time Salaried part time Salaried full time SECTION III - Agency personnel practices: Procurement: 1. Below are listed a number of sources of Supply for salaried employees, check those utilized by your agency. Friends of present employees Business and Trade Paper Ads Former Employees Voluntary applicants College recruiting Professional Associations Employment agencies Selective recruiting (recruiting Newspaper ads employees from other agencies) -’,vrn Please rank in order of importance as sources for salaried personnel. lst 2nd 3rd If you do college recruiting, how many colleges were visited last year? __‘ m__Would you name them. _“y “a “w-. . — *a co... -.... o. tummms-c I-“fl‘ I-bfl‘ou-m - ~~sa neat... *n...w.‘—_-.—.—-—-— What per cent of your new salaried employees were gained through your college recruiting efforts last year? per cent. Personal qualifications of prospective salaried employees: Assuming equal qualifications, which do you prefer? Male __ Female __ No preference Married Single No preference Age: Under 25 25-35 36-45 Over 45 In hiring employees for salaried positions, do you give preference to: Non-College Grads. Yes No College Grads. Yes No Liberal Arts Grads. Yes No Business Adm. Grads. Yes No Applicants with Advanced Degrees Yes No Do you feel specialized courses in advertising are an asset in an applicant's background? Please comment. _—~¢.‘--o— .u A b— .— —... ...~.o-——.- .b- .*.*on ._.— _- “hn-e _- m...» -. ._~ ~—-.- Training: Additional procurement procedures: After making initial contact with the prospect what planned policy policy program do you follow before the applicant is hired or rejected. (In order to aid you, below is a sample program followed by the personnel deparhment of a large corporation in its screening of salaried applicants.) ‘ a. A brief interview to determine quickly if the candidate is a likely prospect for hiring. b. Application form to provide pertinent personnel data. c. Issuance of mental examinations. d. Further interview to determine area of applicants interest, qualifications, and background. e. Hiring or rejection , 3. Induction to job or training program and preparation of proper personnel and payroll records. List your procedure in screening salaried applicants: How many persons must pass upon a salaried applicant before hiring? Who are these people? (title) Who makes the final decision as to whether applicant will be hired or rejected? (title) If mental tests are given what kind are they (e.g. Aptitude, I.Q., Personality, etc.) A__- Does your agency provide any organized training program for beginning salaried employees? Yes No (If yes,) which Of the following does it most nearly approximate? ___,Master and Apprentice ___ Observation without participation ___ Department Routing ___ Department Training (concentration ___ MSil Room Orientation in one department) ___.Lecture Series ___ Reading Course ___ Jr. Discussion Group ___.Review Meeting Jr. Project Group If your program defies classification within any of the above programs or is a combination of a number of them please describe its main tenets. '1. ,. 4. How long does your training program last? 5. Do you follow a policy of sending some of your employees to colleges or professional schools for further training. Yes No 6. Do you think that an internship plan (a plan whereby a student can leave the university fiar a certain period and gain practical experience in an agency, with the understanding that he will return to the university following this internship period) would be desirable. Yes No Doubtful 7. When should the internship program take place? During the school year during the summer all year 8. Does your agency have such a program? Yes No 9. Does your agency provide any introductory booklet for prOSpective or new employees (e.g. Welcome to Young and Rubicam) Yes No Administration: 1. Does your department carry on job analysis (study the duties and operations of jobs?) Yes No 2. Do you maintain a file of job descriptions (written descriptions of an individual job and includes duties, responsibilities, and work perform- ed?) Yes No ' 3. Does your agency maintain a central personnel record file which provides a running account of employment history? Yes No 4. (If yes) check which of the following are included: ___ application form wage advances interview results transfers and promotions mental and physical test results accident and sick leaves training received disciplinary notations progress reports result of exit interview 5. To which of the following health and benefit programs does your agency subscribe? medical attendants on the premises ___ pension plans group insurance stock participation profit sharing bonuses hospitilization o. What is your policy on vacations? (e.g. length, with pay, etc.) Compensation: 1. In your estimation what starting monthly salary should a person applying for a salaried position in your agency expect if he is a recent college graduate? ‘0‘ 2. Who determines the wage rates in your agency? (title) 3. How are these wage rates determined? (Check influencing factors): .___ Prevailing wage level in the industry ‘___ Tradition in the agency' ___ Prevailing wage levels in the area ___ Job Evaluation __ Arbitrary decisions __ ranking or’ grading ____ factor comparison ___ point system SECTION IV - Concluding comments: What do you think is the position of personnel management in agencies today? What do you think it will be in ten years? BIBLIOGRAPHY 70 Books Barton, Roger. Advertising Agency Operations and Management. New York, McGraw-Hill, 1955. Packard, Vance. The Status Seekers. New York, McKay Company, 1959. Parten, Mildred. Surveys, Polls, and Samples: Practical Procedures. New YCrk, Harper Brothers, 1950. Terry, George. Principles of Management. Homewood, Illinois, R. D. Irwin, 1950. Articles and Periodicals "Accent on Youth in Ad Business is Accelerated, Accentuated: Campbell-Ewald Uses Training Courses, Special Tests to Get Hopefuls," Advertising Age, January 2, 1961. "Ad Agency Salaries, Here's How Ad Men Are Paid Why Some Get More, Some Less; Special Report," Printer's Ink, August 8, 1958. "AFA is Told of Sagging Status of Ad Education," Advertising Age, June 16, 1958. "Agency Billings Rank," Advertising Age, February 22, 1961. "Agency Hiring is Still a Rat Race," Printer's Ink, September 8. 1961. ”Agency Recruiting," Printer's Ink, April 22, 1960. "Agency Training Program; How They Develop Ad Men of the Future,” Printer's Ink, December 12, 1958. Blier, J. "Agency That Plants Now Reaps Later," Printer's Ink, December 12, 1958. 71 Bonner, T. "Ad Men's Hiring Policies: Why So Short Sighted?" Printer's Ink, December 12, 1958. Buck, Gordon. "Recruiting Ad Men From College Ranks: Is Adver- tising Passing Up Good Talent?" Printer's Ink, April 18, 1958. Crawford, John W. and Sabine, Gordon A. "Educators Discuss Need For Better Instructors, More Broad Gage Instruction in Advertising," Advertising Age, November 3, 1958. "Finding Talent Off Madison Avenue: Do Non-New York Agencies Have Difficulty Attracting Personnel They Need?" Printer;§,Ink, October 21, 1960. "Four Jobs for Every Ad Graduate,” Advertising Age, December 19, 1961. Grosbeck, Kenneth. "How to Pick the Sure to Grow Agency Men or women," Advertising Age, January 2, 1961. . "Key Man Can Be Brought Into Your Agency Business by Incorporating, Issuing Common Stock, Insilating Profit Sharing,“ Advertising Agency Magazine, March 14, 1958. "New TalentzkurAgencies," Sponcer, August 9, 1958. Rasner, R. "Individual NCt the Group is Key to Successful Personnel Policy," Office, May, 1958. ”Training and Picking Ad Men," Advertising Age, August 3, 1956. Valenstein, L. "Agency Personnel to Double by 1970," Adver- tising Age, January 18, 1960. W01f, Jack. "How College Co-op Courses Build Better Ad Men," Printer's Ink, June 8, 1956. WOOd, Jordan. "Is There A Right Education For Industrial Ad Men?" Industrial Marketing, July, 1954. 72 Pamphlets Gamble, Frederic. "Agency Profits, the Public Relations of Relations of Advertising, the Purpose of the A.A.A.A., and Unemployment in the Agency Business," Papers from from A.A.A.A. Annual Meeting, 1961. "Introduction to the Career Opportunities in Advertising- Marketing at Benton and Bowles,” Career Booklet from Benton & Bowles, Inc., 1961. Stevens, Samuel. "Encouraging Creativity," Papers from 1961 Annual Meeting of the A.A.A.A., 1961. The Advertising Business and Its Career Opportunities, The American Association of Advertising Agencies, 1961. Wright, Moorhead. "Development of Men," American Association of Advertising Agencies, 1961. Unpublished Material Crawford, John. Speech made before the American Association of Advertising Agencies in Detroit, Michigan, Noyember 30, 1961. McGarrity, Richard A. "A Survey of Milwaukee's Advertising Men and women to Determine Their Background and Opinions on Modern Education for Advertising." Mast's dissertation, Department of Business Administration, Marquette Univer- sity, 1959. .,. "N . ‘ “$35.1 (15 _ "iiiiii(ii(iiiiiiiiimi