Cooperate to Compete

Takao Kato outlines the types of human resource management practices (HRMPs) used in Japan and the effect of these employee participation programs on employee productivity and economic competitiveness. From these findings about the effects of HRMPs on Japanese productivity, Kato draws several conclusions for the direction that American policy might take in order to raise productivity in the United States. He advocates encouraging the diffusion of participatory HRMPs (both information-sharing and financial), supporting these programs once they are adopted, and recognizing the beneficial role of unions in employee participation. As to the role of government in fostering these programs, Kato found that in Japan government has played an informal and indirect role, primarily in the areas of data gathering, information dissemination, and education, rather than a direct role through interventions such as tax incentives (which are currently available to US firms adopting financial HRMPs).