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International Differences in Lean Production, Productivity and Employee Attitudes

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  • Susan Helper
  • Morris M. Kleiner

Abstract

The study examines US-European productivity and worker attitude differences, focusing on changes in incentive structures. We analyze productivity and worker attitudes in five plants in the UK and US belonging to the same multinational producer of automotive sensors and actuators. We examine the firm's efforts to make complementary changes in product strategy and human-resource policies. In particular, we look at the impact of a Value-Added Gainsharing plan (VAG) that was introduced at different times among the four plants. Our analysis draws on multiple plant visits, surveys of almost all of the workforce, and confidential financial data. Our study offers a rare look inside a low-wage, non-union firm. We find that the VAG had an impact on productivity and profitability. We find that the UK plant's productivity and worker satisfaction was well below that of the US plants. However, neither our analysis nor interviews with managers suggest that differences in national institutions play a key role in explaining these results.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 13015.

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Date of creation: Apr 2007
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Publication status: published as Shaw, Kathryn and Richard Freeman (eds.) International Differences in the Business Practices and Productivity of Firm, A National Bureau of Economic Research Conference Report. Chicago and London: University of Chicago Press, 2009.
Handle: RePEc:nbr:nberwo:13015

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  1. Martin J. Conyon & Richard B. Freeman, 2002. "Shared modes of compensation and firm performance: UK evidence," LSE Research Online Documents on Economics, London School of Economics and Political Science, LSE Library 20060, London School of Economics and Political Science, LSE Library.
  2. Sandra E. Black & Lisa M. Lynch, 2003. "What's driving the new economy?: the benefits of workplace innovation," Working Paper Series, Federal Reserve Bank of San Francisco 2003-23, Federal Reserve Bank of San Francisco.
  3. Morris M. Kleiner & Jonathan S. Leonard & Adam M. Pilarski, 2002. "How industrial relations affects plant performance: The case of commercial aircraft manufacturing," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 55(2), pages 195-218, January.
  4. Milgrom, Paul & Roberts, John, 1990. "The Economics of Modern Manufacturing: Technology, Strategy, and Organization," American Economic Review, American Economic Association, American Economic Association, vol. 80(3), pages 511-28, June.
  5. Wei Chi & Richard B. Freeman & Morris M. Kleiner, 2011. "Adoption and Termination of Employee Involvement Programs," LABOUR, CEIS, CEIS, vol. 25(1), pages 45-62, 03.
  6. Ichniowski, Casey & Shaw, Kathryn & Prennushi, Giovanna, 1997. "The Effects of Human Resource Management Practices on Productivity: A Study of Steel Finishing Lines," American Economic Review, American Economic Association, American Economic Association, vol. 87(3), pages 291-313, June.
  7. Peter Cappelli & David Neumark, 2001. "External Job Churning and Internal Job Flexibility," NBER Working Papers 8111, National Bureau of Economic Research, Inc.
  8. Richard B. Freeman & Morris M. Kleiner & Cheri Ostroff, 2000. "The Anatomy of Employee Involvement and Its Effects on Firms and Workers," NBER Working Papers 8050, National Bureau of Economic Research, Inc.
  9. Roger T. Kaufman, 1992. "The effects of IMPROSHARE on productivity," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 45(2), pages 311-322, January.
  10. Edward P. Lazear, 1996. "Performance Pay and Productivity," NBER Working Papers 5672, National Bureau of Economic Research, Inc.
  11. Ronald G. Ehrenberg, 1990. "Do compensation policies matter? A symposium. Introduction," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 43(3), pages 3-12, February.
  12. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2002. "How Much Should We Trust Differences-in-Differences Estimates?," NBER Working Papers 8841, National Bureau of Economic Research, Inc.
  13. Helper, Susan & Levine, David I, 1992. "Long-Term Supplier Relations and Product-Market Structure," Journal of Law, Economics and Organization, Oxford University Press, Oxford University Press, vol. 8(3), pages 561-81, October.
  14. Joel Cutcher-Gershenfeld, 1991. "The impact on economic performance of a transformation in industrial relations," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 44(2), pages 241-260, January.
  15. S. Baranzoni & P. Bianchi & L. Lambertini, 2000. "Market Structure," Working Papers 368, Dipartimento Scienze Economiche, Universita' di Bologna.
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Cited by:
  1. Susan Helper & Morris M. Kleiner & Yingchun Wang, 2010. "Analyzing Compensation Methods in Manufacturing: Piece Rates, Time Rates, or Gain-Sharing?," NBER Working Papers 16540, National Bureau of Economic Research, Inc.

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