CASEY ICHNIOWSKI Columbia University KATHRYN SHAW Carnegie Mellon University Old Dogs and New Tricks: Determinants of the Adoption of Productivity-Enhancing Work Practices A LARGE BODY of theoretical research in economics models firms' choices of employment practices. For example, a numberof studies model the choice of compensation practices, such as profit sharing, efficiency wages, piece rates, team rewards, or other pay-for-produc- tivity plans. Otherwork focuses not on compensation practicesbut on other work practices, such as the use of work teams, screening of workers, and sharingof financial information with workers.' Finally, other studies model the adoption of clusters of practices ratherthan individual practices.2 These models typically explain the observedvar- iation in firms' work practices by pointing to differences in factors, such as the cost of observing employee effort, the separability of em- ployee effort, the separability of employee tasks on the job, or the relative value of quality versus quantityin the profit function of each firm. In this paper we conduct an empirical investigationof the adoption of new work practices in a unique data set. The data set contains We would like to thank seminar participants at the Brookings Institution andCarnegie Mellon Universityfor their comments, individuals in the steel industry who generously gave their time to this project, and LindaChristiefor her valuableassistance. 1. Forreviews of recentmodels in this stream of literature, see Lazear (1991, 1992). 2. See especially Holmstromand Milgrom (1994); Milgrom and Roberts (1993); Kandel and Lazear (1992); and Baker, Gibbons, and Murphy (1994). 1