Quietly, almost without notice, a new industrial relations system with a fundamentally different way of managing people is taking shape in the U. S. Its goal is to end the adversarial relationship that has grown between management and labor and that now threatens the competitiveness of many industries.

The coming of the Industrial Revolution to the U. S. 150 years ago created a profound shock that is still being felt. From the 1830s well into the 20th century, the nation experienced periodic outbreaks of "the labor problem," troubles that accompanied the acculturation of great masses of pre-industrial immigrants and rural migrants into the harsh discipline of the factories and mines. Today's industrial relations system still contains elements that were jerry-built then to deal with work-force instability: manual jobs fragmented into simple tasks, foremen with awesome disciplinary powers, and a deeply rooted sense that a wide gap separated those who work from those who manage.

But the changed social values and high educational levels of today's younger labor force, combined with economic strains are putting massive pressure on that obsolete system. Increasing numbers of companies and unions are leading a march away from the old, crude workplace ethos and the adversarial relationship it spawns.

The change will bring current work psychology almost full circle from where it was only 35 years ago, when Elton Mayo, a pioneer work sociologist at Harvard University, accused American man

agement of accepting a "rabble hypothesis" in dealing with workers. Most managers, Mayo wrote, used the wrong incentives to gain labor's cooperation because they viewed employees as a "horde ... actuated by self-interest"-a money-grubbing rabble with no group loyalty or social goals.

A more enlightened view of worker psychology has taken hold today. It stresses that most people want to be productive and will-given the proper incentives and a climate of labor-management trust-eagerly involve themselves in their jobs. This calls for a participatory process in which workers gain a voice in decision-making on the shop floor. Many companies, some in collaboration with once-hostile unions, are creating new mechanisms to gain worker involvement. Among these mechanisms are "self-managed" work teams, labormanagement steering committees in union shops, problem-solving groupssuch as "core groups" or the quality circles that are widely used in Japan-and redesign committees that wed social and technical ideas in designing or rearranging plants.

The concepts behind these innovations are not new; social cooperation at work surely predates recorded history. But organized labor's growth as a deeply adversarial institution in the U. S. coupled with management's retention of obsolete methods of controlling workers-Frederick Taylor's "scientific management" approach, for example-have blinded both sides to their mutual interests. Only a few years ago, work innovations were looked upon as slightly bizarre, if interesting, projects that "couldn't prointeresting, projects that "couldn't produce any bottom-line results," as Jerome M. Rosow, president of Work in America Institute Inc., puts it.

But evidence is growing that qualityof-work-life (QWL) programs, as some companies and unions call them, can meet their twin goals of increasing job satisfaction and improving quality and productivity. Moreover, the convergence of two major trends is forcing companies and unions to change their ways.

The 'baby-boom' generation

One trend, social and demographic in nature, consists of increasing demands by better-educated workers at all levels for more challenge on the job and for participation in decision-making. The "baby-boom" generation, which brought radically changed values to the workplace, now just about dominates the labor force. The second trend is economic-the slower growth, declining productivity, and tougher worldwide competition that is shrinking so many basic U. S. industries. These forces must be dealt with, and, increasingly, business and labor are realizing that solving "people problems" is as important as generating capital and introducing new technology. And, as Rosow says, "adversity is a tremendous motivator."

Until recently, the work innovation movement in the U. S. has progressed slowly. The 1950s and 1960s brought increased research and the development of theories on worker psychology (page 89). By the early 1970s, corporations such as General Motors, Procter & Gamble, and General Foods had started work improvement programs. Now, the movement has graduated from the experimental phase. Hundreds of companies, profiting from what was learned by forerunners, are trying to redesign jobs and work processes. In the early years, unions feared-and many still do-that

these programs would undermine their relevance and position in the workplace. But three of the largest unions-the United Auto Workers, United Steelworkers, and Communications Workers of America-are now involved in what are essentially industrywide projects in their industries.

Richard E. Walton of Harvard, a consultant and an authority on work improvement projects, believes that the last few years have produced a value shift in American industry. In society at large, he says, a return to a "let-theenvironment-be-damned" attitude is unlikely. "In the same way, we're not going to treat the psychological and social costs of producing goods and services as if they're the fault of the individuals involved but of the system," he says. "This shift will ebb and flow, but the quality of work will be much more of a concern than it was 10 years ago."

"I'm absolutely convinced that the future of collective bargaining is in quality-of-work-life," says Irving Bluestone, a retired UAW vice-president who is the premier union champion of work innovations. While this is the rhetoric of an advocate, Bluestone's intuition about the growth of the QWL movement has proved correct in the past. In the early 1970s, he was its only supporter on the UAW's 26member executive board, and he often was criticized for it.

Today, a majority of the board supports worker involvement programs at

GM, Ford, Chrysler, and other UAW companies. Labor relations in the entire industry are becoming much more collaborative. But the UAW and the companies have not given up any rights in bargaining contracts. "We can be cooperative on the plant floor and adversarial at the bargaining table," Bluestone says.

Quality circles

Aside from union-management relations, the workplace is changing in an even more profound way. "It's a real fundamental change in the way we manage people," says Paul W. Chaisson, director of human resources at Malden Mills, a textile manufacturer in Lawrence, Mass. "There's no longer management turf and worker turf," he says. "There's just a sharing of the management of the business, and there's such a thirst among the workers for this process, it's amazing."

The sudden thirst among companies for a quick splash of "consensus management," as practiced successfully in Japan, raises the danger that work redesign will become too faddish. In the 1950s, the Japanese began using an American concept neglected in the U. S. the quality circle, a committee of workers that analyzes and solves quality problems. Some 200 U. S. companies now have quality circles. Ted Mills, president of the American Center for the Quality of Work Life, warns that a too

hasty application of the concept in U. S. companies would smack of the "American 'quick-fix' mentality" and could harm the entire QWL movement.

But the important work innovations in the U. S. are by no means imitations of a Japanese model; they represent an authentic American movement of employee involvement in production-related decisions on the plant floor. The movement also differs considerably from the Eu-. ropean system of codetermination, in which worker representatives sit on corporate supervisory boards. Although UAW President Douglas A. Fraser is a Chrysler Corp. director, his election to the board was a singular quid pro quo for UAW wage concessions. "We want participation from the bottom up," says Glenn E. Watts, president of the Communications Workers. "I don't want to sit on the board and be responsible for managing the business. I want to be free as a unionist to criticize management."

There is no longer any question that significant change in the workplace is under way--and not only in heavy industry. Work improvements are being instituted in supermarkets, schools, banks, and government offices, among other places. Whether this will be a lasting change-a continuing process, instead of a "program" with a termination datedepends on whether American management and labor leaders are willing to risk short-term profits and political gains to produce long-term change.

THE BUILT-IN
OBSOLESCENCE IN
TODAY'S SYSTEM

The risks involved in work innovations are worth taking if labor and management hope to respond to the nation's shift in social values and its economic stagnation. The dimensions of the economic problems are well-known: high unemployment and inflation, the decline of basic industriessuch as steel, autos, apparel, electrical equipment-because of foreign competition, and a flattening out of a once-high productivity growth.

The social forces that play some part in the productivity slowdown and that

call for major changes in the industrial relations system are less well understood. A major factor is the growing influence of the baby-boom generationpeople born from 1946 through the early 1960s-on work values. It came to maturity during a period of unparalleled prosperity and social turmoil and therefore brings far different expectations to the job than the generation that grew up during the Depression. Daniel Yankelovich, who heads the research firm of Yankelovich, Skelly & White, describes the younger generation as more concerned with personal growth and enjoyment of work and leisure.

Based on interviews with 3,500 families last year, Yankelovich contends that 40% of the labor force is composed of workers who belong to new work-value groups. One new-value group dislikes formal job structures and rejects money as a substitute for fulfillment; the primary objective of the second group is to earn money not for the sake of money but to buy a certain lifestyle. Once that

is achieved, this group tends to hold back on the job. Most important, says Richard Balzer, a vice-president of the Yankelovich firm, a large part of the younger generation "can't return to the traditional 'keeping your nose to the grindstone' when hard times come because they've never known hard times.”

Older generations tend to bemoan a perceived loss of the work ethic among younger workers and demand a return to a mythical golden era of hard work. But all studies of people's commitment to productive work indicate a "strong affirmation of the value of work," says Michael Maccoby, director of the Washington-based Project on Technology, Work & Character. However, Maccoby and an associate, Katherine A. Terzi, conclude in a recent study that changes in society "have changed the social character so that it is less frightened and submissive, more self-affirmative and critical of inequity." This suggests strongly that U. S. industry must reorganize work and its incentives to appeal to new worker

values rather than try to retrofit people

to work designs and an industrial relations system of 80 years ago. 'Living in the 1930s'

This old system, with its built-in conflicts, encouraged the perception that "head work" was the responsibility of managers only. "We're still living in the 1930s world, paying for the use of a worker's hands and not what he can offer mentally," says Alfred S. Warren Jr., industrial relations vice-president of General Motors Corp. Adds Michael Sonduck, corporate manager of work improvement at Digital Equipment Corp.. "One of the most dehumanizing assumptions ever made is that workers work and managers think. When we give shop-floor workers control over their work, they are enormously thoughtful."

The rise of industrial unionism in the 1930s reduced corporate power over workers, ended unfair treatment on the job, and gave workers a voice in wages and working conditions through bargaining. But the unions continued to operate with a 1930s philosophy, demanding rules to spread the work and limit management's flexibility. This only strengthened management's resolve to tighten controls over workers. Moreover,

unionism has done little to insert the worker into his work or give him pride in quality, largely because the unions have not demanded a voice in reorganizing the work structure-and undoubtedly would have been rebuffed by management if they had.

What resulted was a sharp adversarial relationship between management and labor. "Workers and management are seen to have diametrically opposed interests," writes University of Michigan sociologist Robert E. Cole in Work, Mobility & Participation, a 1979 book comparing Japanese and American labor practices. In Japan, workers view the corporation as "the sustaining force" of their lives and therefore eagerly cooperate with management. But in the U. S., Cole says, "management writes off worker cooperation because it is seen as either irrelevant or impossible to achieve."

Increasing numbers of company, union, and academic authorities are coming to believe that a new industrial relations system must include three basic elements:

The development of a nonadversarial relationship on the shop floor, so that workers and bosses can collaborate on means and methods of production by cir

cumventing adversarial procedures, such as grievance mechanisms. This need not violate union contracts or prevent unions from negotiating wages and benefits, but greater cooperation at the production level will involve workers in the business to a much greater extent.

A reform of bargaining, based on a mutuality of interests developed on the shop floor. This work-level cooperation might well slip over into the bargaining process, particularly if unions-reflecting the concerns of their members-tie themselves more tightly to the success of the individual company, rather than try to keep up with national wage patterns and outdo other unions.

A thoroughgoing change in management style in which the traditional topto-bottom hierarchical form of decisionmaking is replaced with a participation process. Decisions should be pushed to ever-lower levels, thereby encouraging employees, by extension, to become involved in the business itself. But this would also mean that management must share information with workers, divide with them the gains resulting from increased participation, and work much harder to provide job security and to prevent the catastrophic blows of unexpected plant shutdowns.

A NEW WAY OF MANAGING PEOPLE

There is a videotape circulating throughout Xerox Corp. in which President David T. Kearns candidly sets forth the company's key strategies, its capital investment plans, the priorities it places on each of its divi

sions, and the competitive threats it faces. He ends by saying, "I pledge to you that management of this company at [all levels] will listen to you and put your ideas to work."

Over at the Webster (N. Y.) headquarters of Xerox's Reprographics Technology Group, Group President Frank J. Pipp mirrors that approach. He is setting up quality circles, horizontal councils of same-level people from different departments, and vertical work-study groups from different levels within a department. He has gotten the advance agreement of union leaders and has

trained hourly workers and foremen on quality circle methods. And he is showing his own videotape back-to-back with Kearns's.

"Both Dave and I honestly believe that most people are naturally innovative, want to work hard, only don't