Academic journal article Monthly Labor Review

Firm Productivity and Competitiveness

Academic journal article Monthly Labor Review

Firm Productivity and Competitiveness

Article excerpt

In a study of 62 automobile-assembly plants, John Paul Macduffie found strong evidence that innovative human-resource practices increased firm-level performance and national competitiveness. Macduffie, writing in the January 1995 Industrial and Labor Relations Review, analyzed the relationship between human resource practices, manufacturing policies and productivity using data from plants in the United States, Japan, Europe, Australia, Korea, Taiwan, Mexico, and Brazil. He found that regardless of location, plants using team-based work systems, extensive training, and per formance-based compensation linked with flexible production operations such as low inventory and repair buffers, outperformed mass production plants in both quality and productivity.

Macduffie suggested that three conditions must be met before innovative human-resource practices can improve economic performance: employees must have skills and knowledge that managers lack, they must be given the motivation to apply them, and the production system must channels their effort towards performance improvement. He focused on "bundles" of, rather than individual, human resource practices, as they create the mutually reinforcing conditions that support employee motivation and skill acquisition. …

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