Groundbreaking Study Work in America Revisited; Authors Urge Employee Involvement and Ownership

Back in 1973, James O'Toole and Edward Lawler (a recent NCEO/Beyster Institute keynote speaker) wrote the groundbreaking study Work in America. Among other things, the study urged the expansion of the then-nascent trend towards employee involvement programs. That book largely defined the way people talked about business for many years. Now the authors have revisited the study in The New American Workplace (Palgrave-McMillan, 2006). They report a considerable expansion of employee involvement programs. "We have seen that the redesign of work is feasible, that a careful alteration of jobs can lead to participation in responsibility and profits, and that the precise nature and extent of participation is a matter for experimentation within each workplace," they told Fast Company magazine (June 2006). But the growth has not been nearly as great as its economic merits would suggest it should be.

"We were naive," they write. "We failed to recognize that the greatest obstacles to high-involvement workplaces are the attitudes and assumptions of top executives. Many are still threatened by the prospect of worker participation. And too many leaders of American corporations still believe they have 'no choice' but to match the working conditions and employment practices of their lowest-wage competitors at home and, increasingly, abroad.

"They are wrong. In 2006, the most promising fact we are able to document is the existence of high-involvement, high-wage, high-profit companies in almost every industry--for example, Southwest Airlines, Nucor Corp., W.L. Gore & Associates, Xilinx Inc., Harley-Davidson Inc., UPS, Costco Wholesale Corp., and Alcoa Inc., to cite just a few. These are productive and growing companies that have lower labor costs overall than their low-wage competitors. Because these companies involve their workers in decision making, reward them fairly for their efforts, and provide them with good training and career opportunities, their employees reciprocate the favor in terms of much higher productivity than workers in comparable low-wage companies. As executives at Starbucks explain, they are able to offer unusually high benefits to their employees not because they charge a premium for their product, but because their productive, customer-sensitive employees allow the company to realize a premium for the products and services they offer.

"The bottom line: All the evidence shows that workers who participate in decision making, training, profit sharing, and stock ownership are so much more productive than workers who don't enjoy these working conditions that they pay for their own higher salaries and benefits. They also work to keep jobs in America."