Formal worker participation schemes, such as the quality circles and related employee involvement schemes that have been introduced in 75 percent of Fortune 500 companies, are likely to have a lasting impact on the way many organizations work. In a majority of empirical studies, direct participation is associated with at least a short-run improvement in satisfaction, commitment, quality, productivity, turnover, and/or absenteeism. In almost no cases does participation make things worse. Sustained long-term improvements in performance occur only when (1) participative groups are given the information and authority to make substantial changes in the workplace; (2) supervisory behavior is altered so that formal participation is consistent with the way things are usually done; (3) workers and managers are rewarded for increased responsibility and productivity; (4) job security and guarantees of individual rights make workers feel free to participate; and (5) employees believe that participation is not merely a means of speed-up or a threat to their jobs or union. The government should subsidize research and demonstration projects, introduce participation within federal agencies, and revise the National Labor Relations Act to make it clear that participation programs are legal in both union and nonunion settings, as long as their purpose is neither to bypass nor to avoid unions. (73 references) (CML)