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Still Many Paths to the Business High Road

December 20, 2016

By Paula Klein

How to provide good-paying, high quality jobs was certainly a hot-button topic of 2016, and it probably will remain critical for the future, as well. But finding the employment “high road” is deceptively difficult to achieve and maintain—even with the best of intentions. And as the U.S. presidency is about to be handed over to a wealthy businessman who will be surrounded by other big-business executives, there’s reason to be skeptical.

  Nevertheless, Paul Osterman, MIT Sloan School Professor of Human Resources and Management,  is among those continuing to talk about improving job quality and sustainable careers in an era of rapid technological and organizational change. He led a seminar at the IDE on Dec. 7, to outline a framework for what he calls High Performance Work Organizations, and how to build them in the face of automation, profitability pressures, and regulatory pushback.  The seminar’s goal was to offer practical approaches and to identify areas for further academic study.  

The Challenge of Sustained Excellence

Osterman acknowledged that sustaining corporate excellence is more difficult than adopting it, as indicated by Tom Peters’ seminal book, In Search of Excellence, published in 1982. “Half of those companies are out of business” or struggling and not caring for their workers as they had intended, he said. Osterman’s own book, Good Jobs America, published in 2011, soberly concluded that far too many adults remain trapped in poor-quality jobs. While education and training are important, policies aimed at earnings are essential to lifting workers out of poverty.

Fast forward to today’s fight for overtime regulations and a $15 hourly minimum wage in an economy that’s veering away from full-time, well-compensated jobs and benefit packages. Higher wages will address some concerns, Osterman said, but better pay is not the sole solution. High performance organizations also engage in productivity practices such as job rotation, quality circles, and other ways to incentivize workers to produce high-quality products and services.

At the same time, he said, realistic pressures on corporate profitability and financial performance often confound these approaches. And the pro-business sentiment now taking hold in the U.S. may also test the limits of worker rights and good labor issues.

“If you choose the high road, is it equally profitable or is it just the right thing to do?” Osterman posited. He believes that it is possible to achieve both, but “with limits.” He also noted that private companies, such as the often-cited SAS, have more latitude than public firms because they are less pressured by shareholders and short-term earnings.

To date, public policy discussions tend to focus on four categories regarding worker performance, he said:

  1. Showing businesses that taking the high road is almost as profitable as other systems.
  2. Changing the context, e.g. creating more equitable financial markets and corporate boards.
  3. Using strong government power and regulation to force change.
  4. Change/understand situations on an industry-by-industry basis and incentivize on that basis to improve the quality of work to everyone’s advantage.


Osterman favors the last point and expands on it in his upcoming (2017) book which probes the home healthcare worker industry. He makes the case that it’s in the best interest of insurance companies and employers to improve home health aide jobs. Raising salaries and offering more training, for instance, not only improves the quality of patient care, but will cut down on more expensive nursing care, nursing homes, and overall long-term care. It’s also the right thing to do, he added.

Other points raised at the seminar included:

  • Re-allocation of profits are corporate reorganization is part of the larger employer/employee discussion, as is Inclusive Innovation.
  • Consumer-led pressure to improve labor standards has had positive effect on some businesses and industries such as restaurants, manufacturers, and retail, but it is difficult to measure and sustain.
  • MIT’s Institute for Work and Employment Research is launching a Good Companies-Good Jobs Initiative with $11 million in funding from The Hitachi Foundation to continue studying these issues.

Read Osterman’s views on the new administration in Washington, D.C., and ways Progressives Can Pressure Trump on 3 Key Issues and his earlier comments about Good Jobs, here.


 Paul Osterman is the Nanyang Technological University (NTU) Professor of Human Resources and Management at the M.I.T. Sloan School of Management as well as a member of the Department of Urban Planning at M.I.T. From July 2003 to June 2007 he also served as Deputy Dean at the Sloan School.


Read on Medium, here.