The Organization of Work: Changes and Their Consequences

This paper documents the changes in human resource practices from the early 1980s to the middle of the 1990s, using a unique and comprehensive data set concerning a sample of about 800 firms from a wide rage of industries in the state of Minnesota. A major aspect in these changes concerns the widespread adoption of practices that emphasize employee involvement in decision-making and in firm financial returns. Focusing on cross-sectional data the paper examines the determinants of human resource practices and finds that differences in the complexity of tasks and the interdependence among the tasks of core employees explain well the prevalence of employee participation in decision-making both individually and in groups. The association between human resource practices and outcomes of interest to employees and shareholders is complicated; the empirical findings do not support strong statements concerning the effect of employee participation in decision-making and in financial returns on outcomes.