Why do people choose to work? More specifically, what is it that motivates some to labor extremely hard, while others seize nearly every opportunity to shirk and seek personal gain at the expense of the company or fellow employees? "Many managers still think employees need to be coerced into performing

with some system of carrots and sticks, but my research suggests this approach has its limitations. Managers who can effectively use political skills to inspire trust and cooperation in their workforce will always have a competitive advantage," states Gary J. Miller, Taylor Professor of Political Economy, Washington University's John M. Olin School of Business.

He contends that many American companies owe their success to internal policies that long had fostered a sense of partnership between workers and management. He argues that this productive culture of cooperation has been shattered by the recent rash of corporate downsizings and layoffs. "Managers face incredible pressure from Wall Street to slash labor costs to the bone. Every dollar they take out of workers' pockets is another dollar for shareholders. Wall Street applauds firms for being 'lean and mean,' but these downsizings are going to have a devastating impact on employee morale and long-term productivity.

"The workplace is in reality a political institution in which all the players--chief executives, managers, and workers--have their own personal agendas. The only way an organization can achieve maximum productivity is to give each player some degree of political power and ownership in exchange for commitment and cooperation."

Miller admits that some people will work harder for higher salaries, hourly raises, or bonuses, but claims that incentive systems based on economic rewards alone never will spur all workers to put forth their maximum joint effort for the good of the company. "Economic incentive systems tend to self-destruct within business organizations because the competing self-interests of managers and subordinates always provide someone with an incentive to shirk. Managers and subordinates are encouraged to work at cross purposes. Each pursues personal gain at the expense of company objectives."

Managers seeking a promotion or bonus, for instance, may take actions that help them look good in the short run, even when they know these acts eventually will hurt the firm. Workers seeking to protect their own interests would be foolish to suggest labor-saving innovations that might lead to cuts in overtime pay or layoffs. "We can't compete with Japan in high-tech industries unless all workers are willing to share their expertise and ideas with management. People are aware that productivity improvements can lead to increased inventories and greater chances of layoffs in the next recession. If management wants workers' suggestions, it must assure employees that they won't suggest themselves out of a job."

Miller maintains that it is impossible to design an economic incentive system that compels all managers and workers to share valuable data. Some individuals and groups within the company always will find it in their best economic interest to withhold or distort information. Managers are tempted to get ahead themselves by taking unfair advantage of subordinates. Workers respond by looking for still more ways to shirk. The cycle breeds mistrust, discourages cooperation, and eventually cripples productivity.