Human Resource Management Practices and Wage Dispersion in U.S. Establishments



intensively in establishments with, on average over all establishments, 52.3 % of the non-managerial and
non-supervisory workers under this practice. Job rotation and self-directed teamwork, when adopted
by firms, is used on average by 12.1% and 13.7% of the workforce respectively.

Comparing these results with the year 1996 for all sectors (column 4), one can see an increase in
the percentage of non-managerial and non- supervisory workers using each of the three involvement
practices. Looking at the practices by manufacturing and non manufacturing sectors, one observes that
a greater proportion of workers are engaged in job rotation in manufacturing establishments whereas
for non manufacturing businesses, meetings and teamwork are more common. The workers percentage
has increased between 1993 and 1996 in both sectors for all three practices.

Among the variables describing the organization of the workplace, the number of management levels
and the number of workers per supervisor in the company reflect the degree of hierarchy and levels of
authority in the organization. Over all sectors these two measures decreased between 1993 and 1996,
suggesting a change in the type of internal organization of the establishments during the two years.

The variables regarding the use of benchmarking, TQM or re- engineering do not change much during
the two years. The most striking feature from the table is that the proportion investing in training for
working in teams has almost doubled between the two years. At the same time, the proportion of
establishments using profit sharing or stock option as part of the compensation system declined by
almost half.

It is interesting to see that very few establishments use all of the preceding practices all together
(3% in 1993 and 2% in 1996) but at the same time, very few companies do not use any of them (2% in
1993 and 1% in 1996).

Table 2 describes the preceding workplace and organization practices but this time, showing the
frequencies rather than analyzing the intensity of use. I built two types of dummy variables shown in
the two columns of the table for each year: one to indicate that the establishment uses at least the given
practice and the other to indicate that the given practice is the only practice used by the establishment.

Looking at the column “At least”, one can clearly see that meetings is the practice adopted by the
majority of firms (86% in 1993 and 84% in 1996). Moreover, although teamwork and job rotation are
not used by a large percentage of workers, between 40 and 50% of the establishments use them. From
the column “Only”, the very low percentages demonstrate that the practices tend to be used as bundles
rather than individually.

Overall comparing 1993 and 1996, tables 1 and 2 reflect the findings from previous studies using the
NES data as well as similar cross-industry data on workplace practices (Osterman (2000)): according
to table 2, there has been an increase in the adoption of individual practices but the proportion of firms
adopting the full set of practices (employee involvement as well as other workplace practices and pay

10



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