Knowledge Sharing through Face-to-Face Communication and Labour Productivity: Evidence from British Workplaces

We investigate whether the adoption by workplaces of human resources management (HRM) practices that enhance face-to-face communication (FTFC) among employees is associated with productivity gains. The analysis is based on a nationally representative sample of over 500 British trading establishments drawn from the linked 2004 Workplace Employment Relations Survey and Annual Business Inquiry, for which objective measures of labour productivity (value added per employee) are available. We find a positive association between productivity and FTFC in problem-solving groups, teams and meetings of senior or line managers and employees, provided that FTFC is adopted on a continuous basis. Our finding suggests that British workplaces in the trading sector could increase their productivity by implementing HRM practices in such a way as to enhance knowledge sharing through employees' personal interactions. Copyright (c) Blackwell Publishing Ltd/London School of Economics 2009.