Preparing for an UNCERTAIN ECONOMIC FUTURE.

The growing trade deficit with Asia, the Asian stock market crash, and concerns about the state of the U.S. economy are creating an uncertain climate. In such times, worker productivity is all-important to a company's financial security and, be extension, the national economy. Healthy productivity growth lowers inflation and helps the stock market because employers can increase workers' salaries and earn increased profits without raising their product prices.

However, U.S. Labor Department reports showed a decline in worker productivity of 0.2% in the second quarter of 1998--the first such downturn in three years--despite keen competition in the job market and high wages. Since worker productivity is the key factor in determining American living standards, this could be an indication of economic crunches to come. Companies, therefore, are advised to hope for the best while preparing for the worst by ensuring good worker productivity levels.

The catch, of course, is how to accomplish this. Employers have tried every means to get their staffs in gear, from increasing wages to disciplinary measures. In a climate of downsizing and economic uncertainty, merely throwing money at the problem won't necessarily resolve it. What can be done to inspire these workers, win their dedication, and improve over-all performance?

While searching for a way to balance productivity with wages, many firms seriously are examining incentive programs as a means to raise employee morale and increase their productivity levels. Jim Warren, founder of Team Research, Tualatin, Ore., explains that, "In light of today's volatile economic situation, productive, satisfied workers are extremely important to a company's survival. However, many companies don't have a concrete strategy to increase productivity. There has to be a constructive company-wide system for acknowledging and rewarding good performance, correcting weak performance, and building teamwork."

According to Warren...