Computer Automation, Work Environment, and Employee Satisfaction: A Case Study

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  • Computer Automation, Work Environment, and Employee Satisfaction: A Case StudyAuthor(s): Einar HardinSource: Industrial and Labor Relations Review, Vol. 13, No. 4 (Jul., 1960), pp. 559-567Published by: Cornell University, School of Industrial & Labor RelationsStable URL: .Accessed: 25/06/2014 01:23

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    THE use of electronic computers as data-processing equipment represents

    one of the major innovations in office practices during the past decade. Like other forms of automation it has aroused great interest because of its possible social and economic effects.' The possible impact of automated office equipment on work environment and employee satisfaction has been discussed, and empirical studies con- cerned at least in part with these aspects of automation have been published by Craig,2 the Bureau of Labor Statistics,3'4

    In assessing the impact of automation on workers and their jobs, little systematic atten- tion has been paid to comparing its effects with those of more conventional changes in methods and organization of work. In this study of experience in an insurance company, changes in various job aspects, and workers' attitudes toward these changes, in the departments directly affected by the introduction of an electronic computer were compared with the effects of other types of changes that occurred at the same time in departments whose work was largely unaffected by the computer's intro- duction. In general, the changes in working environment and job satisfaction appear to have been quite similar between the two groups of employees.

    The study on which this article is based is part of the automation research project of the Labor and Industrial Relations Center at Mich- igan State University. The author is indebted to Jack Stieber and William A. Faunce for critical comments on earlier drafts, and to Gerald L. Hershey for his assistance in analyz- ing the data. Einar Hardin is assistant professor of economics and research associate of the Labor and Industrial Relations Center, Michi- gan State University.-EDITOR

    Mann and Williams,5'6 and Jacobson, Trumbo, Cheek, and Nangle.7 It can be argued that computer automation has little practical significance in an office en- vironment long exposed to ordinary mechanization and organizational, pro- cedural, and personnel changes, unless it

    1 See J. Stieber. "Automation and the White- Collar Worker," Personnel, Vol. 34, No. 3 (No- vember-December 1957), pp. 8-17; and G. Cheek, Economic and Social Implications of Automation: A Bibliographic Review (East Lansing, Mich.: Labor and Industrial Rela- tions Center, Michigan State University, 1958), pp. 91-97.

    211. F. Craig. Administering a Conversion to Electronic Accounting, Cambridge, Mass.: Riverside Press, 1955, 224 pp.

    'The Introduction of an Electronic Compu- ter in a Large Insurance Company (Studies in Automatic Technology No. 2, Bureau of Labor Statistics, U. S. Department of Labor, Wash- ington, D.C., October 1955), 16 pp.

    'A Case Study of an Automatic Airline Res- ervation System (Studies in Automatic Tech- nology, Bureau of Labor Statistics Report No. 137, U. S. Department of Labor, Washington, D.C., July 1958), 21 pp.

    'F. C. Mann, "The Impact of Electronic Accounting Equipment on the White Collar Worker in a Public Utility Company," Man and Automation (The Technology Project, Yale University, New Haven, Conn., 1956), pp. 32-39.

    6 F. C. Mann and L. K. Williams, "Organi- zational Impact of White Collar Automation," Proceedings of the 11 th Annual Meeting, (Pub- lication No. 22, Industrial Relations Research Association, Madison, Wisc., 1959), pp. 59-69.

    TE. H. Jacobson, D. Trumbo, G. Cheek, and J. Nangle, "Employee Attitudes toward Tech- nological Change in a Medium Sized Insurance Company," Journal of Applied Psychology. Vol. 43, No. 6 (December 1959), pp. 349-354.

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    entails unusual kinds and rates of change in work environment, job satisfaction, and other relevant variables. The effects of automation have not so far been com- pared with the effects of other kinds of change. The present study attempts to help fill this void. Using primarily the questionnaire data collected by Jacobson and associates, automated and nonauto- mated departments are compared with respect to perceived computer impact on the job, perceived net change in the job (regardless of cause), feelings about per- ceived job change, and satisfaction with the job.


    An IBM 650 electronic data-processing machine of standard type, equipped with card input and output and with only the ordinary magnetic-drum memory, was in- stalled in July 1956, in the statistical de- partment of a medium-sized casualty in- surance company.8 The installation was preceded by studies of procedures, by programming for the computer, and by much preparatory punching of cards. The change-over to automatic renewal of private automobile insurance policies, which was the chief application of the computer, was begun in November, and all renewals of such policies were handled by the new methods as of December 1956. After a new and satisfactory work routine was substituted in January 1957, for one that had been found defective, no further substantial changes in work methods, or- ganization, or personnel assignment oc- curred as a result of the computer instal- lation for at least a year. A 'dry run' rou- tine to spot-check policies prior to issuance

    8 Usually regarded as being of medium or small scale, this machine appears to be the most commonly used computer in this country. See F. Bello, "The War of the Computers," Fortune. Vol. 60, No. 4 (October 1959), p. 128.

    had, however, been made necessary by the high error rate caused by the original de- fective work routine, and this spot check was continued until October 1957.

    The statistical department was very familiar with punched-card methods and conventional IBM equipment, but had no previous experience with the processing and issuance of insurance policies. As soon as automatic renewal was started, the peace of the department, whose sole prod- uct used to consist in statistical and in- ternal accounting reports, was broken by the insistence of other departments and of agents and policyholders that policies be issued promptly and correctly. The in- creased exposure to complaints elicited a number of organizational changes which included the creation of a separate policy- processing division in the department, the setting and enforcement of deadlines for completion of work, and the rotation of personnel within the division to promote flexibility of personnel assignment. Many employees had to learn new procedures, forms, and codes, and the increased need for accuracy was stressed.

    Programming and direct computer op- eration also required adjustments. The de- tailed planning of the conversion, the con- struction and testing of computer pro- grams, and much other preparatory work had been assigned to the head and a few employees of the statistical department long before the computer arrived. Once the conversion was completed, however, programming became a part-time assign- ment for two employees, although a few more employees were taught the basic principles of the task as a safeguard against absenteeism or separations. The mere operation of the computer was found to be a very simple job, comparable to sorting-machine operation, an entry job in the department, and was easily learned by all in the division.

    Statistical department employees out-

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    side the new policy processing division al- so experienced some changes in tasks. These included the operation of the com- puter instead of more conventional equip- ment in compiling statistical and account- ing reports and the use of new forms and codes.

    Outside the statistical department, the installation of the computer noticeably af- fected the automobile underwriting de- partment. Its tasks used to consist of un- derwriting work proper, computation of premiums, typing of policies, and main- tenance of policy files. Although the de- partment also typed policies and main- tained files for casualty insurance under- written in other departments, the bulk of its policies were for private-passenger au- tomobile insurance, usually renewed from year to year with only minor changes. Conversion to the computer meant that the renewal of these latter policies was by and large transferred to the statistical de- partment. This substantially reduced the volume of simple work in the department, but because of voluntary quits and of limited replacement the workloads of in- dividual employees in the department did not fall commensurately. Employees previously engaged either partly or wholly in the renewal of policies were assigned work with different kinds of policies, which in some instances required the ac- quisition of new skills. Many of the under- writing forms and procedures also changed, and increased stress was placed on accuracy in the handling of new poli- cies, since these were later to be renewed mechanically. For several months there was also the periodic task of making dry runs. Nevertheless, many tasks in the de- partment changed very little.

    Some other departments were affected in minor ways. The agency department was given the task of explaining the new renewal procedure to the agents who now no longer initiated the renewal work, who

    occasionally expressed fears of reductions in commissions, and who were disturbed by the errors and delays frequent in the first two months of computer operation. The accounting department and the mail room had to modify their procedures slightly. The tasks of the remaining de- partments, comprising the majority of the approximately 325 employees in the home- office work force, were virtually unaffected by the computer installation.

    Briefly, then, the departments affected by the computer installation were the statistical department and the automobile underwriting department. All remaining departments were essentially unaffected.


    Information on changes in work flow, tasks, and organization caused by the com- puter in various departments was ob- tained in repeated interviews with super- visory personnel before, during, and after the conversion to computer operations. The description of the research site and the classification of departments accord- ing to computer impact were based on this information.

    Data on employee perception of com- puter impact and of net change, on feel- ings about perceived change, and on job satisfaction were collected in a question- naire survey conducted at the end of Feb- ruary 1957, after the conversion was es- sentially completed. The content of the questionnaire and the manner of ad- ministration are described elsewhere.9 About 85 percent of the home-office em-

    9 See Jacobson, et al., op. cit.; and D. A. Trumbo, "An Analysis of Attitudes toward Change among the Employees of an Insurance Company," doctoral dissertation, Michigan State University, 1958. The questionnaire was designed and administered by Jacobson, with the assistance of Cheek, Nangle, Trumbo, the writer, and other members of the Labor and Industrial Relations Center. The interviews with supervisors on the changes caused by the computer were conducted by the writer.

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    ployees participated in the survey. Most of the others were excluded because their work (building maintenance, part-time, or travel) excluded them from the scope of this study. For this paper, only question- naires from nonsupervisory employees were used, because the supervisory ques- tionnaires contained few relevant ques- tions. No information was obtained about the computer experiences of those who left the company before the survey. These persons were mostly young female em- ployees quitting on their own accord. No layoffs were made in the company during the decade preceding the survey.

    The questionnaire items relevant to the present report were:

    (A) What effect did the change-over (to the new computer) have on your job? 1. I was promoted; 2. I was transferred to another job; 3. I kept the same job, but the work was greatly changed; 4. I kept the same job, but the work was notice- ably changed; 5. I kept the same job, and the work was only slightly changed; 6. I kept the same job, and the work was not changed.

    (B) How did you feel about this? 1. I disliked it very much; 2. I disliked it; 3. It made no difference to me: 4. I liked it; 5. I liked it very much.

    (C) Do you think that the computer will affect your job in the next year or two? 1. Very probable; 2. Quite prob- able; 3. Possible, but not very probable; 4. Probably not; 5. Definitely not; 6. I have no idea.

    (D) How do you feel about this? 1. I dislike it very much; 2. I dislike it; 3. It makes no difference to me; 4. I like it; 5. I like it very much.

    The following three questions were in the form of a checklist of eleven job as- pects as shown in Table 2.

    (E) How has this aspect of your job changed in the past year? 1. Much more now; 2. More now; 3. No change; 4. Less now; 5. Much less now.

    (F) How do you feel about this change (or lack of change) in your job? 1. Like a lot; 2. Like; 3. Don't care; 4. Dislike; 5. Dislike a lot.

    (G) Did the change-over to the com- puter affect this aspect of your job? 1. Yes, very much: 2. Yes, much; 3. Yes, some; 4. Yes, little; 5. No.

    (H) Taking everything into account, how satisfied are you with your job? 1. Completely satisfied; 2. Very satisfied; 3. Quite satisfied; 4. Somewhat satisfied; 5. Not satisfied.

    (I) A checklist asking the respondent to indicate how satisfied he was with each of a number of job aspects, using the same response categories as in question H. The job aspects of this checklist may be found in Table 3.

    The reliance on employee reports raises the question of the validity of perceived change. Hardin and Hershey, using data from a study subsequent to the present one, found that (1) perceived change in pay was significantly associated with ac- tual change in pay, so that explicit rank- ing of six departments according to the proportion of perceived change gave a rough indication (rho _.77) of the rank- ing of departments according to the pro- portion of actual change; (2) the fre- quency of perceived change in pay system- atically understated the frequency of ac- tual change (possibly because of the small- ness of actual change) ; and (3) discrep- ancies between perceived and actual change were not associated with stable differential characteristics of the respond- ents and hence were not a persistent per- sonal trait.10 While perceived-change data need be handled with caution, they were used in this study because they undoubt- edly had some validity and because, ex- cepting the case of pay, no other sources of data with higher validity suggested themselves.


    The basic analysis compared the re- sponses of employees affected by the com-

    "0E. Hardin and G. L. Hershey. "Accuracy of Employee Reports on Changes in Pay," Journal of Applied Psychology (in press).

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    puter and the responses of those not af- fected. Employees in the statistical depart- ment and the automobile underwriting de- partment were regarded as employees from 'affected departments,' while em- ployees from all other departments con- stituted the 'unaffected departments.' In the comparisons of perceived change and of impact, we used departmental affilia- tion as of August 1956, (before the con- version had started for more than a hand- ful of persons). Department affiliation in February 1957 was used as an auxiliary criterion in the comparisons of job satis- faction prevailing after the conversion.

    Departmental differences reported in the paper were significant at the 1 percent or the 5 percent level. Approximate chi- squared tests were usually employed, but exact probabilities were computed in a few instances.'1


    The over-all computer impact the em- ployees perceived in their jobs was re- corded by responses to question A and can be seen in Table 1. Computer impact (A:1-5) was reported by 79 percent of those in affected departments and by 29 percent of personnel of unaffected depart- ments. Substantial changes (promotions, transfers, or great changes in work con- tent) were reported more frequently in affected departments but were even there confined to a minority of employees.



    The computer impact which re- spondents perceived in eleven aspects of their jobs was reported in answer to ques- tion G; the job aspects and the distribu-

    " For information on the exact tests, see R. A. Fisher, Statistical Methods for Research Workers. (New York: Hafner Publishing Com- pany, Inc., 1948), pp. 96-97.

    Table 7. Perceived Over-all Computer Impact on Own Jobs in Affected and

    Unaffected Departments.

    (Percentage Frequency Distributions)

    Question A: What effect did the change- over (to the new computer) have on

    your job?

    Affected Unaffected Type of Impact Departments Departments

    (N= 76) (N=90)

    1. Promotion 5 0 2. Transfer 4 3 Same job, but work

    content: 3. greatly changed 21 1 4. noticeably

    changed 27 8 5. slightly changed 22 17 6. not changed 20 69

    1 2

    Total 100 100

    tions of replies can be seen in Table 2. Affected departments reported computer impact significantly more often than did the unaffected departments for each job aspect except ability to pace one's own work. The difference was large for var- iety (item 2) and responsibility (item 6), and small for amount of supervision (item 3) and amount of pay (item 11). The statistical department differed from the automobile underwriting department only in reporting more impact on the ability to pace one's own work.



    The frequency and direction of net change in specific job aspects (i.e., whether due to computer impact or to other changes) during the year preceding the survey were indicated by responses to question E; these are also shown in Table 2. It can be seen that affected and unaf-

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    Table 2. Perceived Computer Impact and Perceived Net Change for Eleven Job Aspects in (A) Affected Departments (N=76) and (B) Unaffected Departments (N=90).

    Question G: Did the change-over to the computer affect this aspect of your job? Question E: How has this aspect of your job changed in the past year?

    G. Computer Impact * E. Net Change Past Year t Dept.

    Job Aspect Group % res % No % N.A. % Up % Same % Down % N.A.

    1. The amount of security I A 36 59 5 30 58 11 1 feel on this job B 11 85 4 32 63 4 1

    2. The amount of variety A 57 39 4 47 38 12 3 in my work B 19 73 8 34 57 8 1

    3. The amount of super- A 21 74 5 14 69 14 3 vision I get B 9 83 8 8 80 11 1

    4. My chance for promotion A 25 70 5 30 62 5 3 to a better job B 9 83 8 27 65 7 1

    5. The amount of skill A 36 54 10 38 55 3 4 needed on this job B 11 80 9 37 58 3 2

    6. The amount of responsi- bility demanded by A 40 51 9 43 51 3 3 this job B 11 82 7 42 53 3 2

    7. The degree qf accuracy A 30 62 8 37 55 3 5 demanded by this job B 16 76 8 39 57 3 1

    8. The extent to which I A 26 65 9 28 60 7 5 can pace my own work B 17 74 9 28 62 8 2

    9. The degree to which A 38 53 9 42 47 7 4 my work is interesting B 17 75 8 43 49 6 2

    10. The amount of work re- A 45 47 8 46 39 12 3 quired on this job B 20 72 8 46 44 9 1

    11. The amount of pay I A 19 72 9 20 77 0 3 get on this job B 7 85 8 39 58 2 1

    * In this table,responses G: 1 through G: 4 were grouped together as 'Yes'; leaving G: 5 as 'No' (see p. 562 above). The average relative frequencies for G: 1-4 were 3%, 5%, 9%, and 6%, respectively.

    t Responses E: 1-2, E: 3, and E: 4-5 were grouped as 'Up,' 'Same,' and 'Down' in the table. On the average the replies E: 1 and E: 5 were chosen by 9% and 2%, respectively, of the respondents.

    fected departments differed very little from each other in the frequency and direction of net change they perceived. The sole statistically significant differences were that there was more change in

    variety (item 2) and less change (in- crease) in pay (item 11) in affected de- partments. The statistical department, which on most questions responded very much like the automobile underwriting

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    department, reported increases in skill re- quirements and responsibility more fre- quently than did other departments.


    Affected and unaffected departments did not differ significantly in their feelings about over-all computer impact as re- ported in response to question B. Both groups either liked the impact they per- ceived or professed indifference, and only when the work content was greatly changed did a substantial minority (37 percent) express dislike. The two groups of departments were also very similar in their views on the likelihood of future computer impact on jobs (questions C and D); among those who thought it very likely or quite likely their jobs would be affected in a year or two, 10 percent dis- liked the prospects, while the rest were evenly divided between indifference and liking.

    In question F, the respondents were asked to state their feelings about the net change (or lack of change) they had per- ceived in their jobs over the year (that is, regardless of whether or not the change was caused by computer installation). Among those who perceived increases or decreases, 71-89 percent said they liked the change, while 4-17 percent said they dis- liked it. Once again, affected and unaffect- ed departments did not differ from each other in feelings about perceived change in individual job aspects. When all eleven aspects were considered jointly, however, the automobile underwriting department tended to show more indifference and less positive liking than did the statistical de- partment and the unaffected departments.



    Employee satisfaction prevailing after the conversion of renewal work to com- puter processing, as measured by answers

    to questions H and I, is shown in Table 3 for those employed in August 1956. The top seven job aspects in this table were also included, in approximately the same form, in the perceived-change checklist (Table 2).

    Affected and unaffected departments showed approximately the same distribu- tions of responses to the various job satis- faction questions. The only significant dif- ference, based on the dichotomy between those workers completely, very, and quite satisfied and those somewhat and not sat- isfied, was that affected departments showed less satisfaction with the way changes were handled. When depart- mental affiliation was counted as of Feb- ruary 1957, so that employees hired dur- ing the preceding six months were in- cluded in the comparison, significant dif- ferences were found for responsibility, kind of work done, the way changes were handled, and amount of information re- ceived. The significant differences and most of the nonsignificant ones pointed in the direction of less satisfaction in af- fected departments. Comparisons using the dichotomy completely satisfied versus very, quite, somewhat, and not satisfied gave substantially the same results: few significant differences between affected and unaffected departments but a ten- dency for the former to be less satisfied.

    SUMMARY The installation of an IBM 650 elec-

    tronic data-processing machine in a medi- um-sized insurance company caused sub- stantial changes in work methods and as- signments in the statistical and automobile underwriting departments but caused very few changes in the rest of the home office. Affected and unaffected departments were compared after installation had been com- pleted with respect to responses given by nonsupervisory employees to survey ques- tions concerning perceived computer im-

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    Table 3. Job Satisfaction of (A) Affected Departments (N=76) and (B) Unaffected Departments (N=90) after the Installation of the Computer.

    Significant Association with

    Completely, Dept. Affiliation Very, or Somewhat as of Quite or Not

    Question I: How satisfied areyou Satisfied Satisfied N.A. August February with this aspect of your job?* Dept. % % % 1956 1957

    1. How sure I can be of keeping A 93 4 3 a job here B 88 10 2 No No

    2. The difficulty of my job for me A 79 14 7 B 83 10 7 No No

    3. The amount of responsibility I A 81 16 3 have on my job B 82 15 3 No Yes

    4. The accuracy required of me on A 88 8 4 my job B 91 6 3 No No

    5. The pace at which I work on A 87 9 4 my job B 89 7 4 No No

    6. The amount of work required of A 83 13 4 me on my job B 88 9 3 No No

    7. The pay I get on my job A 49 50 1 B 61 37 2 No No

    8. The kind of relationship I have A 88 11 1 with my supervisor B 85 12 3 No No

    9. The kind of work that I do A 79 21 0 B 85 12 3 No Yes

    10. The company I work for A 95 5 0 B 92 8 0 No No

    11. The way my supervisor handles A 82 18 0 his (her) job B 76 21 3 No No

    12. The way changes are handled A 55 42 3 around here B 71 25 4 Yes Yes

    13. The amount of information I get A 66 34 0 B 79 21 0 No Yes

    14. The accuracy of the information A 73 27 0 I get B 86 14 0 No No

    H. Taking everything into account, A 83 17 0 how satisfied are you with your job? B 86 1 4 0 No No

    * Job aspects 2, 3, 4, and 9 of questions E-G (Table 2) were omitted from the job satisfaction checklist of question I. Aspects 1, 5, 6, 7, 8, 10, and 11 of questions E-G are roughly comparable to items 1-7 of question I and of this table. Aspects 8-14 were not found in Table 2 or in checklist E, F, and G.

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    pact on their jobs, perceived net change (regardless of cause) in a series of job as- pects, feelings about computer impact and about net change, and over-all and spe- cific job satisfaction. Affected departments reported more computer impact on the job as a whole and on specific job aspects, but showed very few significant differences in the frequency and direction of net change in the same specific job aspects. Employees in affected and unaffected de- partments also did not differ in feelings about perceived computer impact or about net change in job aspects. Affected de- partments tended to show more dissatis- faction with their jobs after the installa- tion, but the differences were small.

    These findings support the notion that the major technological change which computer automation is taken to represent causes changes in some job aspects re- garded as relevant to employee satisfac- tion, but by and large, they do not sup- port the hypothesis that these induced changes constitute either an acceleration or a reversal of general trends. The in- terpretation suggested by the data is that the form of automation studied here, rev- olutionary though it may be technological- ly, causes changes in work environment and job satisfaction very similar to those which occur normally and without com- puter automation.

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    Article Contentsp. [559]p. 560p. 561p. 562p. 563p. 564p. 565p. 566p. 567

    Issue Table of ContentsIndustrial and Labor Relations Review, Vol. 13, No. 4 (Jul., 1960), pp. 497-675Volume Information [pp. ]Front Matter [pp. ]A Theory of Conflict and Power in Union-Management Relations [pp. 501-518]Contrasts in Labor Market Behavior in Northern Europe and the United States [pp. 519-532]Social Services and Public Expenditure in Sweden: Recent Developments and Problems [pp. 533-549]The Diesel Firemen Issue on the Railroads [pp. 550-558]Computer Automation, Work Environment, and Employee Satisfaction: A Case Study [pp. 559-567]The Grievance Process in the Philadelphia Public Service [pp. 568-580]DiscussionsHealth Insurance: Are Cost and Quality Controls Necessary? [pp. 581-595]In Defense of Creeping Legalism in Arbitration [pp. 596-607]

    CommunicationsMarket Structures and Wage-Push Inflation [pp. 608-613][Market Structures and Wage-Push Inflation]: Reply [pp. 613-618]

    Recent Publications [pp. 619-633]Book Notes and ReviewsLabor-Management RelationsReview: untitled [pp. 634-636]Review: untitled [pp. 636]Review: untitled [pp. 636-638]

    Labor EconomicsReview: untitled [pp. 638-639]Review: untitled [pp. 639-640]Review: untitled [pp. 640]Review: untitled [pp. 641]Review: untitled [pp. 641-642]

    Labor Conditions and ProblemsReview: untitled [pp. 643-644]Review: untitled [pp. 644-646]Review: untitled [pp. 646-647]

    Labor OrganizationsReview: untitled [pp. 647-649]Review: untitled [pp. 649-651]Review: untitled [pp. 651-652]Review: untitled [pp. 652-654]Review: untitled [pp. 654-655]Review: untitled [pp. 655]

    Government and LaborNoteReview: untitled [pp. 655-656]

    PersonnelReview: untitled [pp. 656-657]Review: untitled [pp. 657-658]Review: untitled [pp. 658-659]Review: untitled [pp. 659-661]

    Human RelationsReview: untitled [pp. 661-663]Review: untitled [pp. 663-665]Review: untitled [pp. 665-666]Review: untitled [pp. 666-667]

    News and Notes [pp. 668-675]Back Matter [pp. ]


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