Using data for the years 1985–92 from a discontinued suggestion program at a manufacturing plant in the United States, this study examines the benefits and costs of suggestions under gainsharing. The implemented suggestions are found to have improved labor productivity and reduced grievances and disciplinary actions, but more robust evidence suggests that they also incurred transaction costs and implementation costs. The author speculates that substantial transaction and implementation costs may be a factor responsible for the typically modest outcomes and generally short longevity of employee involvement programs and high-performance work practices.
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