Magazine

Workers As Self-Managers


THE NEW AMERICAN WORKPLACE

By James O'Toole and Edward E. Lawler III

Palgrave Macmillan -- 260pp -- $27.95

(Readers'

Reviews below)

Editor's Review

The Good Offers a persuasive argument for high-wage, self-managed employment.

The Bad The book's summary of developments at work over the past 30 years is hardly surprising.

The Bottom Line Employees confronting the changed world of work will be better off for reading it.

Three decades ago, then-Secretary of Health, Education, and Welfare Elliot L. Richardson handed a government task force the ambitious job of examining U.S. working conditions. It was a time of widespread concern about "blue-collar blues" and disaffection over stultifying, routinized jobs. After a year's study, Richardson's panel of experts produced an influential report entitled Work in America. It warned that too many Americans were stuck in narrow, repetitive jobs, especially in manufacturing, that lead to a variety of mental and physical health problems.

Now, 33 years later, there's a sequel from the panel's chairman, James O'Toole, a professor at the University of Southern California's Center for Effective Organizations, and his colleague Edward E. Lawler III, the center's founder and director. Their goal in The New American Workplace is to analyze the extensive changes that have swept through U.S. companies in the intervening years. The opening section of the book adds little to our understanding, but there follows a persuasive argument in favor of companies' adopting a high-wage, high-worker-involvement approach to global competitiveness.

The first half offers a dutiful summary of the major trends familiar to most Americans who hold a job today, from offshoring and part-time work to the end of the one-company career. One surprise: The authors find many positives where others have focused on negatives. For example, they underscore new opportunities afforded by the decline of the corporate man who spent his working life climbing the ladder at a single company. "In all, the self-directed career model offers the potential for more people to develop satisfying careers than the traditional lifetime-loyalty model did," they write. In aggregate, though, this is little more than a recap of 33 years of workplace changes. A companion volume due out in August, America at Work (Palgrave Macmillan, $69.95), comprising 16 studies the authors commissioned from prominent thinkers on today's workplace, may offer more new information.

O'Toole and Lawler use the second portion of their book to make the case for a "high involvement," or HI, corporate strategy -- in which, for example, employees get a say in management of their own tasks and there's a strong sense of a "supportive community" at work. They argue that too many U.S. executives still treat employees as an expense rather than an asset. Most corporations, they say, take little responsibility for the social costs generated by the working conditions they offer. When employers pay wages too low to support a family or refuse to provide health coverage, taxpayers wind up footing the bill for everything from food stamps to emergency medical care.Yet most corporate leaders believe they have no choice but to pay what their rivals do -- a mistake, insist O'Toole and Lawler, that has fueled a race to the bottom.

The New American Workplace maintains that rigidly adhering to the dictates of the labor market amounts to little more than myopic leadership. Wal-Mart Stores' (WMT) Sam's Club, for instance, pays less than rival Costco (COST) and offers less health coverage. Wal-Mart, the authors contend, "has chosen to favor investors over workers, when it could have chosen to meet the needs of both, as Costco does."

As an alternative, the pair argues for the high-involvement model. Citing Costco, United Parcel Service (UPS), and W.L. Gore, among others, they explain how HI companies offer enriching jobs and an egalitarian work culture with extensive self-management, few layoffs, and mutual loyalty between company and employee.

While their arguments align with many economists' views that moving up the value-added food chain is the best route to global competitiveness for U.S. companies, not all of O'Toole and Lawler's policy recommendations are likely to fly. Their call for boosting U.S. competitiveness with thorough educational reforms and hikes in the number of college grads, especially in science and math, already has corporate backing. But their proposals for more nutritional and health assistance for pregnant women and universal public preschool haven't gained widespread support.

In their penultimate chapter, the authors focus on the increasingly heavy burden of choice people face, from having to decide what to study and where to work to choosing whether to join a union and when to retire. They note that Work in America paid little attention to issues of personal responsibility. Today, the two write, "issues of personal choice are now front-and-center whenever questions about employment policy are raised."

Employees confronting this confusing state of affairs will be better off for having read this book.

By Aaron Bernstein


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