Summary: GAO has been examining various aspects of the productivity problem for about a decade and presented a discussion on the human factor in productivity. With productivity growth virtually stagnant during the last 3 years, productivity has developed from a somewhat esoteric area of study to a topic of national concern. The reasons for this concern are easily understood. The problem of inflation remains an acute one, and the slowdown in productivity growth is an important contributor to the problem. Additionally, there is now a greater understanding that productivity growth has been a major factor in advancing the well being of the American people. The productivity slowdown has been caused by many factors including: capital investment, technology, innovation, work methods, and the productive quality of the workforce. Efforts have been made to improve productivity, but the human factor in the improvement of productivity is often downplayed. However, even with the difficulty in quantifying the human factor, evidence clearly indicates that efforts to improve productivity by emphasizing the human factor can bring results. One of the main reasons that human resource productivity is not strongly emphasized by U.S. managers is the general attitude of American management. American corporate leaders have been slow to adapt to the rapidly and profoundly changing workforce. A distinguished group of representatives from business, labor, and academia concluded that quality and productivity problems in American industry were largely management problems; management often did not provide the proper incentives or environment for quality and productivity. Historically, management and workers have had different goals: managers strive for productivity improvement and workers mainly seek increased pay and improved job security. These different goals can be reconciled when workers are given the opportunity to share in the increased productivity they create. In summary, actions to improve human resource productivity must include three basic elements: (1) the development of a nonadversary relationship between management and labor, (2) the sharing of the benefits of productivity improvement, and (3) a thorough change in management style based on trust in which the traditional top-to-bottom form of decisionmaking is replaced with one based upon participation.
