Workplace practices and the new economy

This Economic Letter looks at how increased managerial focus on employee involvement, quality management, continuous innovation, and incentive-based compensation has boosted labor productivity and draws out some implications for future productivity gains. The research summarized here indicates that the combination of investment in new technology along with workplace innovation has had especially high payoffs to U.S. firms in the 1990s, and, with the continued reorganization of firms, high productivity growth may continue into the future.