Working Paper: NBER ID: w14230
Authors: Joseph R. Blasi; Richard B. Freeman; Chris Mackin; Douglas L. Kruse
Abstract: 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".
Keywords: Employee Ownership; Profit Sharing; Workplace Performance; Shared Capitalism
JEL Codes: J33; J54; L23; L25
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| shared capitalism (P12) | turnover (J63) |
| shared capitalism (P12) | loyalty (L14) |
| shared capitalism (P12) | worker effort (J29) |
| shared capitalism + high-performance work policies + low supervision (P12) | loyalty (L14) |
| shared capitalism + high-performance work policies + low supervision (P12) | worker effort (J29) |
| shared capitalism (P12) | absenteeism (J22) |
| shared capitalism + corporate culture dynamics (P12) | absenteeism (J22) |
| shared capitalism (P12) | likelihood of searching for another job (J63) |