Creating a Bigger Pie? The Effects of Employee Ownership, Profit Sharing, and Stock Options on Workplace Performance

Working Paper No. 14230 This paper uses data from NBER surveys of over 40,000 employees in hundreds of facilities in 14 firms and from employees on the 2002 and 2006 General Social Surveys to explore how shared compensation affects turnover, absenteeism, loyalty, worker effort, and other outcomes af...

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Bibliographic Details
Published in:NBER Working Paper Series 2008-08, p.14230
Main Authors: Blasi, Joseph R, Freeman, Richard B, Mackin, Chris, Kruse, Douglas L
Format: Article
Language:English
Subjects:
Absenteeism
Capitalism
Compensation
Cooperation
Corporate culture
Economic theory
Employee ownership
Employees
Labor relations
Sharecropping
Stock options
Workers
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Summary:Working Paper No. 14230 This paper uses data from NBER surveys of over 40,000 employees in hundreds of facilities in 14 firms and from employees on the 2002 and 2006 General Social Surveys to explore how shared compensation affects turnover, absenteeism, loyalty, worker effort, and other outcomes affecting workplace performance. The empirical analysis shows that shared capitalism has beneficial effects on all outcomes save for absenteeism and that it has its strongest effects on turnover, loyalty, and worker effort when it is combined with: a) high-performance work policies (employee involvement, training, and job security), b) low levels of supervision, and c) fixed wages that are at or above market level. Most workers report that cash incentives, stock options, ESOP stock, and ESPP participation motivate them to work harder. The interaction of the effects of shared capitalism with other corporate policies suggests that the various shared capitalist and other policies may operate through a latent variable, "corporate culture".
ISSN:0898-2937
DOI:10.3386/w14230