Participation, Productivity, and the Firm’s Environment
Author(s)
Levine, David I.; Tyson, Laura D’Andrea
Abstract
How does employee participation in decision-making affect productivity? Global competition has spurred interest in this question, especially in light of the strong performance of Japanese and other companies with participatory industrial relations. This article examines the effect of participation on productivity, concluding that the theoretical relationship is ambiguous, while the empirical literature finds a usually positive, often small, effect. It then identifies features of a firm’s management and human resource systems that are needed to sustain employee participation, and discusses the effects of the external economic environment on the firm’s decision to introduce such features.
