TY - CHAP
T1 - MOTIVATING EMPLOYEE-OWNERS IN ESOP FIRMS
T2 - HUMAN RESOURCE POLICIES AND COMPANY PERFORMANCE
AU - Kruse, Douglas
AU - Freeman, Richard
AU - Blasi, Joseph
AU - Buchele, Robert
AU - Scharf, Adria
AU - Rodgers, Loren
AU - Mackin, Chris
N1 - Funding Information: Presented at panel on “Econometric Case Studies of Human Resources and Firm Performance,” Industrial Relations Research Association, January 2003, Washington, D.C. This paper is part of the National Bureau of Economic Research’s Shared Capitalism Research Project, funded by the Russell Sage and Rockefeller Foundations. Amy Smith-Boden provided valuable assistance in helping conduct and analyze company surveys.
PY - 2004
Y1 - 2004
N2 - What enables some employee ownership firms to overcome the free rider problem and motivate employees to improve performance? This study analyzes the role of human resource policies in the performance of employee ownership companies, using employee survey data from 14 companies and a national sample of employee-owners. Between-firm comparisons of 11 ESOP firms show that an index of human resource policies, nominally controlled by management, is positively related to employee reports of co-worker performance and other good workplace outcomes (including perceptions of fairness, good supervision, and worker input and influence). Within-firm comparisons in three ESOP firms, and exploratory results from a national survey, show that employee-owners who participate in employee involvement committees are more likely to exert peer pressure on shirking co-workers. We conclude that an understanding of how and when employee ownership works successfully requires a three-pronged analysis of: (1) the incentives that ownership gives; (2) the participative mechanisms available to workers to act on those incentives; and (3) the corporate culture that battles against tendencies to free ride.
AB - What enables some employee ownership firms to overcome the free rider problem and motivate employees to improve performance? This study analyzes the role of human resource policies in the performance of employee ownership companies, using employee survey data from 14 companies and a national sample of employee-owners. Between-firm comparisons of 11 ESOP firms show that an index of human resource policies, nominally controlled by management, is positively related to employee reports of co-worker performance and other good workplace outcomes (including perceptions of fairness, good supervision, and worker input and influence). Within-firm comparisons in three ESOP firms, and exploratory results from a national survey, show that employee-owners who participate in employee involvement committees are more likely to exert peer pressure on shirking co-workers. We conclude that an understanding of how and when employee ownership works successfully requires a three-pronged analysis of: (1) the incentives that ownership gives; (2) the participative mechanisms available to workers to act on those incentives; and (3) the corporate culture that battles against tendencies to free ride.
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U2 - 10.1016/S0885-3339(04)08005-6
DO - 10.1016/S0885-3339(04)08005-6
M3 - Chapter
SN - 0762311142
SN - 9780762311149
T3 - Advances in the Economic Analysis of Participatory and Labor-Managed Firms
SP - 101
EP - 127
BT - Employee Participation, Firm Performance and Survival
PB - JAI Press
ER -