Is there a direct relationship between morale and productivity? According to Robert H. Garin, professor of secondary and higher education at East Texas State University and John F. Cooper, dean of instruction at Patrick Henry Community College, the traditional view that the individual whose morale is high will be highly productive, or vice versa, is not a necessarily valid one. The authors analyzed the historical development of the major representative research studies and concepts concerning the morale-productivity relationship and found that the relationship evolved from one of simple direct correlation to the present viewpoint that a variety of factors--such as the environment, motivation, job levels, and so on--must be taken into consideration before any positive conclusion can be drawn. Because of the national concern over the decline in American productivity standards, Garin and Cooper believe that the morale-productivity relationship is an area ripe for further experimental research

Downsizing, the planned elimination of positions or jobs, is a phenomenon that has affected hundreds of companies and millions of workers since the late 1980s. While there is no shortage of articles on "How To" or "How Not To" downsize, the current article attempts to synthesize what is known in terms of the economic and organizational consequences of downsizing. We argue that in many firms anticipated economic benefits fail to materialize, for example, lower expense ratios, higher profits, increased return-on-investment, and boosted stock prices. Likewise, many anticipated organizational benefits do not develop, such as lower overhead, smoother communications, greater entrepreneurship, and increases in productivity. To a large extent, this is a result of a failure to break out of the traditional approach to organization design and management--an approach founded on the principles of command, control, and compartmentalization. For long-term, sustained improvements in efficiency, reductions in headcount need to be viewed as part of a process of continuous improvement that includes organization redesign, along with broad, systemic changes designed to eliminate redundancies, waste, and inefficiency.

thorough understanding of internal incentive structures is critical to developing a viable theory of the firm, since these incentives determine to a large extent how individuals inside an organization behave. Many common features of organizational incentive systems are not easily explained by traditional economic theory--including egalitarian pay systems in which compensation is largely independent of performance, the overwhelming use of promotion-based incentive systems, the absence of up-front fees for jobs and effective bonding contracts, and the general reluctance of employers to fire, penalize, or give poor performance evaluations to employees. Typical explanations for these practices offered by behaviorists and practitioners are distinctly uneconomic--focusing on notions such as fairness, equity, morale, trust, social responsibility, and culture. The challenge to economists is to provide viable economic explanations for these practices or to integrate these alternative notions into the traditional economic model.