What's Driving the New Economy? The Benefits of Workplace Innovation

Using a unique nationally representative sample of U.S. establishments surveyed in both 1993 and 1996, we examine the relationship between workplace innovations and establishment productivity and wages. Using both cross-sectional and longitudinal data, we find evidence that high-performance workplace practices are associated with both higher productivity and higher wages. Specifically, we find a positive and significant relationship between the proportion of non-managers using computers and the productivity of establishments. We find that firms re-engineer their workplaces and incorporate` more high-performance practices experience higher productivity. For example, profit sharing is associated with increased productivity, and employee voice has a large positive effect on productivity when it is implemented in the context of unionized establishments. These workplace practices appear to explain a large part of the movement in multifactor productivity over the 1993-96 period. When we examine the determinants of wages within these establishments, we find that re-engineering a workplace to incorporate more high-performance practices leads to higher wages. However, increasing the usage of profit sharing results in lower regular pay for workers, especially technical workers and clerical/sales workers. Finally, increasing the percentage of workers meeting regularly in groups has a larger positive effect on wages in unionized establishments

In Search of the High Road: Meaning and Evidence

This article is the first in a series to celebrate the 70th anniversary of the ILR Review. We will be highlighting important research themes that have been featured in the journal over its many years of publication. In this article, Paul Osterman reviews research on the quality of jobs and recent debates over “High Road” and “Low Road” approaches to employment practices. Scholars and policy advocates frequently utilize the distinction between High Road and Low Road firms as a framework for efforts to improve the quality of work in low-wage employers. This article assesses the logic and evidence that underlies this construct. The author provides a definition of the concept and examines the evidence behind the assumption that firms have a choice in how they design their employment policies. He then takes up the assertion that firms that adopt a High Road model can “do well by doing good” and adds precision to this claim by reviewing the evidence that a profit-maximizing firm would benefit from following the High Road path. The article concludes by suggesting a research agenda and providing a framework for policy that flows from the conclusions drawn from the existing research base

Editor's Note

No Abstract.Peer Reviewedhttp://deepblue.lib.umich.edu/bitstream/2027.42/34583/1/4011_ftp.pd

Essays on human resource management practices, turnover, productivity, and firm performance.

This study comprehensively evaluated the links between systems of High Performance Work Practices and firm performance. Results based on a national sample of nearly one thousand firms indicate that these practices have an economically and statistically significant impact on both intermediate employee outcomes (turnover and productivity) and short-and long-term measures of corporate financial performance. Support for predictions that the impact of High Performance Work Practices on firm performance is in part contingent on their interrelationships and links with competitive strategy was limited

Essays on human resource management practices, turnover, productivity, and firm performance.

This study comprehensively evaluated the links between systems of High Performance Work Practices and firm performance. Results based on a national sample of nearly one thousand firms indicate that these practices have an economically and statistically significant impact on both intermediate employee outcomes (turnover and productivity) and short-and long-term measures of corporate financial performance. Support for predictions that the impact of High Performance Work Practices on firm performance is in part contingent on their interrelationships and links with competitive strategy was limited