The authors investigate the productivity effects of innovative employment practices
using data from a sample of thirty-six homogeneous steel production lines owned by
seventeen companies. The productivity regressions demonstrate that lines using a
set of innovative work practices, which include incentive pay, teams, flexible job
assignments, employment security, and training, achieve substantially higher levels
of productivity than do lines with the more traditional approach, which includes
narrow job definitions, strict work rules, and hourly pay with close supervision.
Their results are consistent with recent theoretical models which stress the importance
of complementarities among work practices.