Abstract
In recent years productivity bargaining has been heralded as a promising means of increasing productivity in government, particularly at state and local levels. However, analysis of the literature and practice of productivity bargaining indicates that certain inherent conceptual and implementational problems have not been adequately recognized by academics and practitioners. The central problem concerns the failure to recognize that productivity gains may be counterproductive if accompanied by excessive unit cost increases. The unit cost problem, in turn, is particularly relevant for productivity bargaining because of the "rule" that premium salary increases should accompany (buy) work rule changes promotive of increased productivity. Finally, longitudinal data on the tradeoff between per capita labor costs and government employment in New York City suggest that the relationship between collective bargaining and service production is a more important managerial problem than the relationship between productivity bargaining and service productivity.