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Wage effects of high performance work organization in manufacturing

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  • Paul Osterman
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    Abstract

    An unresolved question about now-widespread innovative work systems such as teams and quality programs is whether they influence wage determination. This study examines that possible association in manufacturing. The author uses data from the 1997 National Establishment Survey that allow examination of how new work systems affected not only employees who were directly involved in them but other workers as well. The key finding is that for core blue-collar manufacturing employees, higher wages were associated with High Performance Work Organization (HPWO) systems. While higher skill levels and computer-based technologies were associated with higher wages, the key mechanism appears to have been productivity gains, independent of skill and technology, that were shared via various across-the-board wage payment systems. HPWO systems appear to have increased managers' wages as well, although through different channels. The author finds no evidence that HPWO-related wage gains led to greater wage inequality among the directly involved employees. (Free full-text download available at http://digitalcommons.ilr.cornell.edu/ilrreview/.)

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    Bibliographic Info

    Article provided by ILR Review, Cornell University, ILR School in its journal ILR Review.

    Volume (Year): 59 (2006)
    Issue (Month): 2 (January)
    Pages: 187-204

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    Handle: RePEc:ilr:articl:v:59:y:2006:i:2:p:187-204

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    Cited by:
    1. Gupta, Vishal, . "Development of a Causal Framework linking High Perofrmance HRM Practices, Positive Psychological Capital, Creative Behaviours," IIMA Working Papers WP2013-03-05, Indian Institute of Management Ahmedabad, Research and Publication Department.
    2. Böckerman, Petri & Bryson, Alex & Ilmakunnas, Pekka, 2011. "Does high involvement management lead to higher pay?," MPRA Paper 28711, University Library of Munich, Germany.
    3. Stark, Oded & Hyll, Walter, 2011. "On the economic architecture of the workplace: Repercussions of social comparisons among heterogeneous workers," MPRA Paper 28910, University Library of Munich, Germany.
    4. Jirjahn, Uwe & Kraft, Kornelius, 2008. "Teamwork and Intra-Firm Wage Dispersion among Blue-Collar Workers," IZA Discussion Papers 3291, Institute for the Study of Labor (IZA).
    5. Bloom, Nicholas & Van Reenen, John, 2010. "Human Resource Management and Productivity," CEPR Discussion Papers 7849, C.E.P.R. Discussion Papers.
    6. Annalisa Cristini & Alessandro Gaj & Riccardo Leoni, 2008. "Direct and Indirect Complementarity between Workplace Reorganization and New Technology," Rivista di Politica Economica, SIPI Spa, vol. 98(2), pages 87-117, March-Apr.
    7. Massimiliano Mazzanti & Davide Antonioli & Susanna Mancinelli, 2011. "Are Environmental Innovations Embedded within High-Performance Organizational Changes?," Working Papers 201115, University of Ferrara, Department of Economics.
    8. Paolo Ghinetti, 2007. "Technology Innovations, Organisational Changes and Firms’ Wages in Italy," Working Papers 111, SEMEQ Department - Faculty of Economics - University of Eastern Piedmont.
    9. Vinod Mishra & Russell Smyth, 2012. "High Performance Work Practices and Workplace Training in China: Evidence from Matched Employee-Employer Data," Development Research Unit Working Paper Series 30-12, Monash University, Department of Economics.
    10. repec:iab:iabzaf:v:41:i:2/3:p:259-285 is not listed on IDEAS
    11. Michael Beckmann & Dieter Kuhn, 2010. "Complementarities between Workplace Organisation and Human Resource Management:," Working papers 2010/03, Faculty of Business and Economics - University of Basel.
    12. Wolf, Elke & Heinze, Anja, 2007. "How to Limit Discrimination? Analyzing the Effects of Innovative Workplace Practices on Intra-Firm Gender Wage Gaps Using Linked Employer-Employee Data," ZEW Discussion Papers 07-077, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.

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