Time to Get Serious about Workplace Change: Big Productivity Increases Are Possible for Companies Switching to High-Performance Work Systems; Government Can Aid the Transition
Jarboe, Kenan Patrick, Yudken, Joel, Issues in Science and Technology
Big productivity increases are possible for companies switching to high-performance work systems; government can aid the transition.
In the early 1990s, Lockheed Martin's Government Electronic Systems plant in Moorestown, New Jersey, was suffering from the decline in defense markets. Layoffs were widespread. By 1992, it looked as if the plant would have to shut down, eliminating hundreds of jobs. But management made an enlightened decision: It formed a joint partnership with the International Union of Electrical Workers Local 106 to implement a high-performance work system. The company stopped outsourcing subassemblies and ordered new technology. Workers, in cooperation with management, redesigned the work flow and created a new training program. In short order, they turned the plant around. Between 1992 and 1995, productivity increased 64 percent. Scrap and defects were reduced by over 80 percent. Product cycle time was cut by 50 percent, inventory by 80 percent, and manufacturing costs by 25 percent. Not only have jobs been saved, but the job loss was reversed.
In the midst of massive downsizings and plant closings, some of the United States's most forward-looking companies have transformed themselves with the aid of high-performance work systems: Corning, Folgers Coffee, Harley-Davidson, John Deere, LTV, Magma Copper, Mercury Marine, Reynolds Metals, Rockwell, Union Carbide, Weyerhauser, and Xerox, among others. Their success, bolstered by a growing body of research about the organizational importance of deep worker involvement, indicates that high-performance work systems are the best way to leverage the capabilities of a company's workers to achieve impressive gains in quality, productivity, and profits.
A high-performance work system seeks to enhance organizational performance by combining innovative work and management practices with reorganized work flows, advanced information systems, and new technologies. Most important, it builds on and develops the skills and abilities of frontline workers to achieve gains in speed, flexibility, productivity, and customer satisfaction.
Unfortunately, only a relatively few companies are pursuing this approach. Most chief executive officers and directors of large companies see high-performance work systems as risky because they require a sweeping change in operations. They find it easier to cut costs by laying people off. Although this may improve the bottom line for a few quarters, it does little or nothing to ignite growth, add jobs, or improve competitiveness. And small and mid-sized companies - the economic bulwark of small towns and the engine of this country's economic growth - simply don't have the knowledge, tools, or resources to implement these systems.
Neither the marketplace nor current public policy seems to be able to provide sufficient incentives for companies to develop high-performance work systems. Without this investment, however, U.S. companies will continue down the well-trodden low-road path, laying off more and more workers, outsourcing more work, and further weakening our nation's ability to compete. We cannot cut our way to jobs and growth.
With only modest changes in a variety of existing federal programs, government can play a role in countering this trend. The government can help break down the barriers to implementing high-performance work systems and speed the diffusion of this new form of work. As an enabler, the federal government can support the development and diffusion of training, tools, technologies, technical assistance, standards, and resources that will make it possible for companies to reap the benefits of this vital approach.
Ultimately, however, businesses and workers must take the lead in fostering change. Success will depend on how well the system performs in the competitive marketplace. But public policies can help companies overcome the initial hurdles. With minimal investment, …
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Publication information: Article title: Time to Get Serious about Workplace Change: Big Productivity Increases Are Possible for Companies Switching to High-Performance Work Systems; Government Can Aid the Transition. Contributors: Jarboe, Kenan Patrick - Author, Yudken, Joel - Author. Magazine title: Issues in Science and Technology. Volume: 13. Issue: 4 Publication date: Summer 1997. Page number: 65+. © 1999 National Academy of Sciences. COPYRIGHT 1997 Gale Group.
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