Significant increases in U.S. productivity, now lagging badly, can be achieved through various forms of worker participation in the management process or by giving workers investment incentives.

That is the conslusion of a new study by Karl Frieden, released yesterday by the National Center for Economic Alternatives, a Washington-based research organization.

Center directors Gar Alperovitz and Jeff Faux, in an introduction to Frieden's report, said increased worker participation in ownership and management would do more to boost productivity than huge investment tax credits for business.

Proponents of tax credits, Alperovitz and Faux said, ignore "a fundamental principle of Western economic life -- that people tend to be more productive when they receive some economic or psychological satisfaction for their efforts."

Frieden, a staff lawyer at the center, also had some sharp words for American labor unions, arguing that changing realities require unions to give less attention to old-style bargaining over wages and working conditions and more to securing worker satisfaction with their jobs.

"Labor unions would be ill-advised to continue to rely on such a limited range of options," Frieden said. "Labor unions could reinvigorate the labor movement's faltering fortunes by moving dramatically to support job satisfaction reforms and greater worker control over company decision-making."

Frieden compiled evidence from previously published material and his own research to show that worker participation in U.S. management affairs, although less extensive than in Western Europe and Japan, produces beneficial results for workers and for companies.

Participation experiences here range from shop-floor efforts at job enrichment and labor-management committees to "Scanlon plans" -- company-wide incentive arrangements.

Frieden estimated that 1,000 U.S. firms now have some form of direct worker ownership, although in most cases employees hold only a minority of stock. He predicted that government assistance to worker-owned firms will expand in this decade.

But he conceded that worker ownership and participation will remain insignificant in this country "unless a strong political movement develops on their behalf.

"With the U.S. entering an era of uncertainty where prosperity is no longer guaranteed, it is incumbent upon Americans to reassess the means by which we manage our economy."