The authors use the econometric case study method to investigate the direct impact of offline teams on productivity in a non-unionized subsidiary of a multinational firm from January 1999 through November 2001. They analyze daily data on rejection, production, and downtime rates for both team and non-team-member operators. They hypothesize that team membership without complementary involvement practices is initially sufficient to enhance productivity and quality control. Further, the use of teams leads initially to more downtime, but this cost will diminish over time. Findings indicate that membership in offline teams initially increases individual productivity by about 3% and lowers rejection rates by about 27%. These improvements dissipate, however, typically at a rate of 10 to 16% per 100 days in a team. For these benefits to be sustained, team membership must be complemented with measures that provide extrinsic rewards. The authors also find that the performance-enhancing effects of team membership are generally greater and longer-lasting for more educated members.
Get full access to this article
View all access options for this article.
References
1.
AlchianArmen A.DemsetzHarold. 1972. “Production, Information Costs, and Economic Organization.”American Economic Review, Vol. 62, No. 5, pp. 777–95.
2.
AmabileTeresa M.1993. “Motivational Synergy: Toward New Conceptualizations of Intrinsic and Extrinsic Motivation in the Workplace.”Human Resource Management Review, Vol. 3, No. 3, pp. 185–202.
AokiMasahiko. 1986. “Horizontal vs. Vertical Information Structure of the Firm.”American Economic Review, Vol. 76, No. 5, pp. 971–83.
5.
AppelbaumEileenBattRosemary. 1994. The New American Workplace: Transforming Work Systems in the United States. Ithaca: ILR Press (an imprint of Cornell University Press).
6.
AppelbaumEileenBaileyThomasBergPeterKallebergArne L., 2000. Manufacturing Advantage: Why High-Performance Work Systems Pay Off. Ithaca and London: ILR Press (an imprint of Cornell University Press).
7.
BandieraOrianaBarankayIwanRasulImran. 2005. “Social Preferences and the Response to Incentives: Evidence from Personnel Data.”Quarterly Journal of Economics, Vol. 120, No. 3, pp. 917–62.
8.
BandieraOrianaBarankayIwanRasulImran. 2009. “Social Connections and Incentives in the Workplace: Evidence from Personnel Data.”Econometrica, Vol. 77, No. 4, pp. 1047–94.
9.
BaronJames N.KrepsDavid M., 1999. Strategic Human Resources: Frameworks for General Managers. New York: John Wiley & Sons.
10.
BartelAnn P.IchniowskiCaseyShawKathryn. 2004. “Using “Insider Econometrics' to Study Productivity.”American Economic Review, Vol. 94, No. 2, pp. 217–27.
11.
BattRosemary. 1999. “Work Organization, Technology, and Performance in Customer Service and Sales.”Industrial and Labor Relations Review, Vol. 52, No. 4, 539–64.
12.
BattuHarminderBelfieldClive R.SloanePeter J., 2003. “Human Capital Spillovers within the Workplace: Evidence for Great Britain.”Oxford Bulletin of Economics and Statistics, Vol. 65, No. 5, pp. 575–94.
13.
Ben-NerAvnerJonesDerek C., 1995. “Employee Participation, Ownership, and Productivity: A Theoretical Framework.”Industrial Relations, Vol. 34, No. 4532–54.
14.
BenabouRolandTiroleJean. 2003. “Intrinsic and Extrinsic Motivation.”Review of Economic Studies, Vol. 70, No. 3, pp. 489–520.
15.
BenabouRolandTiroleJean. 2006. “Incentives and Prosocial Behavior.”American Economic Review, Vol. 96, No. 5, pp. 1652–78.
16.
BlackSandra E.LynchLisa M., 2001. “How to Compete: The Impact of Workplace Practices and Information Technology on Productivity.”Review of Economics and Statistics, Vol. 83, No. 3, pp. 434–45.
17.
BlasiJoseph R.KruseDouglas L., 2006. “U.S. High-Performance Work Practices at Century's End.”Industrial Relations, Vol. 45, No. 4, pp. 547–78.
18.
BoningBrentIchniowskiCaseyShawKathryn. 2007. “Opportunity Counts: Teams and the Effectiveness of Production Incentives.”Journal of Labor Economics, Vol. 25, No. 4, PR 613–50.
19.
CappelliPeterNeumarkDavid. 2001. “Do “High-Performance” Work Practices Improve Establishment-Level Outcomes?”Industrial and Labor Relations Review, Vol. 54, No. 4, pp. 737–75.
20.
ColeRobert E.1989. Strategies for learning: Small-group Activities in American, Japanese, and Swedish Industry: Berkeley and London: University of California Press.
21.
CottonJohn L.VollrathDavid A.FroggattKirk L.Lengnick-HallMark L.JenningsKenneth R., 1988. “Employee Participation: Diverse Forms and Different Outcomes.”Academy of Management Review, Vol. 13, No. 1, pp. 8–22.
22.
DeciEdward L.RyanRichard M., 1985. Intrinsic Motivation and Self-Determination in Human Behavior. New York: Plenum.
23.
DesseinWouter. 2002. “Authority and Communication in Organizations.”Review of Economic Studies, Vol. 69, No. 4, pp. 811–38.
24.
FreemanRichard B.KleinerMorris M.OstroffCheri. 2000. “The Anatomy of Employee Involvement and Its Effects on Firms and Workers.” NBER Working Paper No. 8050.
25.
FujimotoTakahiroTakeishiAkiraAoshimaYaichi. 2001. Business Architecture: Strategic Design of Products, Organizations, and Processes, [in Japanese]. Tokyo: Yuhikaku.
26.
GantJonIchniowskiCaseyShawKathryn. 2002. “Social Capital and Organizational Change in High-Involvement and Traditional Work Organizations.”Journal of Economics and Management Strategy, Vol. 11, No. 2, pp. 289–328.
27.
GlaeserE.LaibsonD.ScheinkmanJ.SoutterChristine. 1999. “What is Social Capital? The Determinants of Trust and Trustworthiness.” NBER Working Paper No. 7216.
28.
GodardJohn. 2001. “High Performance and the Transformation of Work? The Implications of Alternative Work Practices for the Experience and Outcomes of Work.”Industrial and Labor Relations Review, Vol. 54, No. 4, pp. 776–805.
29.
GodardJohn. 2004. “A Critical Assessment of the High-Performance Paradigm.”British Journal of Industrial Relations, Vol. 42, No. 2, pp. 349–78.
30.
GriffinRicky W.1988. “Consequences of Quality Circles in an Industrial Setting: A Longitudinal Assessment.”Academy of Management Journal, Vol. 31, No. 2, pp. 338–58.
31.
GuzzoRichard A.1979. “Types of Rewards, Cognitions, And Work Motivation.”Academy of Management Review, Vol. 4, No. 1, pp. 75–86.
32.
HackmanJ. RichardWagemanRuth. 1995. “Total Quality Management: Empirical, Conceptual, and Practical Issues.”Administrative Science Quarterly, Vol. 40, No. 2, pp. 309–42.
33.
HamiltonBarton H.NickersonJack A.OwanHideo. 2003. “Team Incentives and Worker Heterogeneity: An Empirical Analysis of the Impact of Teams on Productivity and Participation.”Journal of Political Economy, Vol. 111, No. 3, pp. 465–98.
34.
HammerTove H.1988. “New Developments in Profit Sharing, Gainsharing, and Employee Ownership.” In CampbellJohn P.CampbellRichard J., eds, Productivity in Organizations, San Francisco: Jossey-Bass.
35.
IchniowskiCaseyShawKathrynPrennushiGiovanna. 1997. “The Effects of Human Resource Management Practices on Productivity: A Study of Steel Finishing Lines.”American Economic Review, Vol. 87, No. 3, pp. 291–313.
36.
JonesDerek C.KalmiPanuKauhanenAntti. 2006. “Human Resource Management Policies and Productivity: New Evidence from an Econometric Case Study.”Oxford Review of Economic Policy, Vol. 22, No. 4, pp. 526–38.
37.
JonesDerek C.KalmiPanuKauhanenAntti. 2009. “Teams, Performance-Related Pay, Profit-Sharing, and Productive Efficiency: Evidence from a Food-Processing Plant.”Industrial and Labor Relations Review, Vol. 63, No. 4, pp. 606–26.
38.
JonesDerek C.KatoTakao. 1995. “The Productivity Effects of Employee Stock-Ownership Plans and Bonuses: Evidence from Japanese Panel Data.”American Economic Review, Vol. 85, No. 3, pp. 391–414.
39.
JonesDerek C.WeinbergAdam. 2003. “Changing Employment Practices and the Quality of Jobs in Central New York: Evidence from Case studies of Medium-Sized Manufacturing Establishments in Central New York,” in AppelbaumEileenBernhardtAnnetteMurnaneRichard, eds, Low-Wage America: How Employers are Reshaping Opportunity in the Workplace. New York: Russell Sage Foundation, pp. 479–526.
40.
KatoTakao. 2003. “The Recent Transformation of Participatory Employment Practices,” in OguraSeiritsuTachibanakiToshiakiWiseDavid, eds, NBER Conference Report Labor Markets and Firm Benefit Policies in Japan and the United States. Chicago: University of Chicago Press, pp. 39–80.
41.
KatoTakaoMorishimaMotohiro. 2002. “The Productivity Effects of Participatory Employment Practices: Evidence from New Japanese Panel Data.”Industrial Relations, Vol. 41, No. 4487–520.
42.
KochanThomasOstermanPaul. 1994. Mutual Gains Enterprise: Forging a Winning Partnership Among Labor, Management, and Government. Boston: Harvard Business School Press.
43.
LawlerEdward E.III, 1986. High-Involvement Management: Participative Strategies for Improving Organizational Performance. San Francisco: Jossey-Bass.
44.
LazearEdward P.1998. Personnel Economics for Managers. New York and Toronto: Wiley.
45.
LazearEdward P.2000. “Performance Pay and Productivity.”American Economic Review, Vol. 90, No. 5, pp. 1346–61.
46.
LevinHenry M.1982. “Issues in Assessing the Comparative productivity of Worker Managed and Participatory Firms in Capitalist Societies.” In JonesDerek C.SvejnarJan, eds., Participatory and Self-Managed Firms: Evaluating Economic Performance. Chapter 3. Lexington, MA: Lexington Books.
47.
LevineDavid I.1995. Reinventing the Workplace: How Business and Employees Can Both Win. Washington, D.C.: Brookings Institution.
48.
LevineDavid I.TysonLaura D'Andrea. 1990. “Participation, Productivity and the Firm's Environment,” in BlinderAlan S., ed., Paying for Productivity, pp. 183–236. Washington, D.C.: Brookings Institution.
49.
MilgromPaulRobertsJohn. 1995. “Complementarities and Fit: Strategy, Structure, and Organizational Change in Manufacturing.”Journal of Accounting and Economics, Vol. 19, No. 2–3179–208.
50.
MillerKatherine I.MongePeter R., 1986. “Participation, Satisfaction, and Productivity: A Meta-Analytic Review.”Academy of Management Journal, Vol. 29, No. 4, pp. 727–53.
51.
OstermanPaul. 2000. “Work Reorganization in an Era of Restructuring: Trends in Diffusion and Effects on Employee Welfare.”Industrial and Labor Relations Review, Vol. 53, No. 2, pp. 179–96.
52.
PrendergastCanice. 1999. “The Provision of Incentives in Firms.”Journal of Economic Literature, Vol. 37, No. 1, pp. 7–63.
53.
RobinsonAndrew M.WilsonNicholas. 2006. “Employee Financial Participation and Productivity: An Empirical Reappraisal.”British Journal of Industrial Relations, Vol. 44, No. 1, pp. 31–50.
54.
WagnerJohn A.IIIGoodingRichard Z., 1987. “Shared Influence and Organizational Behavior: A Meta-Analysis of Situational Variables Expected To Moderate Participation-Outcome Relationships.”Academy of Management Journal, Vol. 30, No. 3, pp. 524–41.
