
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: TUESDAY, June 6, 1995                   TAG: 9506060121
SECTION: BUSINESS                    PAGE: B6   EDITION: METRO 
SOURCE: Associated Press
DATELINE:                                 LENGTH: Medium

NEW STUDY SHOWS LINK BETWEEN PROFIT AND EMPLOYEES

COMPANIES ARE MORE SUCCESSFUL if they treat workers as assets and invest in training and other employee-benefit programs, a study finds.

NEW YORK - Companies that treat employees as valuable assets, invest in training programs and use innovative workplace practices are more profitable than those that don't, according to a study released Monday.

The two-year look at the workplace strategies of U.S. companies was conducted by the management consulting firm Ernst & Young LLP for the Labor Department.

Researchers at Harvard and the University of Pennsylvania's Wharton business schools, in partnership with the Ernst & Young Center for Business Innovation, reviewed more than 100 papers examining business practices of thousands of U.S. companies.

The report focused on the economic benefits to companies of such concepts of labor-management cooperation as Just-In-Time inventory, which moves components to factories only as they are needed. It also looked at the benefits of training and other employee-oriented programs.

The findings confirmed what Ernst & Young has observed among its clients, according to Terrence Ozan, vice chairman of the firm's Management Consulting Services. Among the findings:

Economic benefits to the companies were greatest when they successfully integrated innovations in management and technology with the appropriate employee training and ``empowerment'' programs.

Companies investing in employee development enjoy significantly higher market values, on average, than their industry peers.

Companies that were first among their competitors in implementing new management practices reaped the largest rewards.

According to the study, Motorola Inc. estimates that it earns $30 for every $1 invested in employee training, while Xerox Corp. found that in cooperation with its employee union it has reduced manufacturing costs by 30 percent and halved the time needed to develop new products.

A lead researcher for the study, Sarah Mavrinac, said that before the study was conducted, anecdotal evidence of new management practices had been mixed.

``Managers should worry less about whether innovative workplace practices will pay off,'' Mavrinac said, ``and more about how to maximize their rewards.''

by CNB