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Worker Responses to Shirking under Shared Capitalism

In: Shared Capitalism at Work: Employee Ownership, Profit and Gain Sharing, and Broad-based Stock Options

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  • Richard B. Freeman
  • Douglas L. Kruse
  • Joseph R. Blasi

Abstract

Group incentive systems have to overcome the free rider or 1/N problem, which gives workers an incentive to shirk, if they are to succeed. This paper uses new questions on responses to shirking from the General Social Survey and a special NBER survey of workers at over 300 worksites in 14 companies that have some form of group incentive pay to examine how well workers can monitor their peers and what they do when the peers are not working up to speed. The paper finds that: 1) most workers say that they can detect fellow employees who shirk; 2) many report that they would speak to the shirker or report the behavior or a supervisor, and many report that they did so in the past; 3) the proportion that takes action against shirkers is greatest among workers paid under group incentive systems, in smaller companies, and in companies with good employee-management relations; 4) group incentives interact with high-performance human resource policies such as employee involvement teams, training, task variety, low levels of supervision, and good fixed wages to induce more workers to act against shirking; 5) workers in workplaces where there is more anti-shirking behavior report that co-workers work harder, encourage other workers more, and report that their workplace facility is more effective in ways that should raise productivity and profits.

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This chapter was published in:

  • Douglas L. Kruse & Richard B. Freeman & Joseph R. Blasi, 2010. "Shared Capitalism at Work: Employee Ownership, Profit and Gain Sharing, and Broad-based Stock Options," NBER Books, National Bureau of Economic Research, Inc, number krus08-1, October.
    This item is provided by National Bureau of Economic Research, Inc in its series NBER Chapters with number 8087.

    Handle: RePEc:nbr:nberch:8087

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    Cited by:
    1. repec:lan:wpaper:3014 is not listed on IDEAS
    2. repec:lan:wpaper:2920 is not listed on IDEAS
    3. Jones, Derek C. & Kalmi, Panu & Mäkinen, Mikko, 2006. "The Productivity Effects of Stock Option Schemes: Evidence from Finnish Panel Data," Discussion Papers, The Research Institute of the Finnish Economy 1026, The Research Institute of the Finnish Economy.
    4. Heywood, John S. & Jirjahn, Uwe, 2009. "Profit sharing and firm size: The role of team production," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 71(2), pages 246-258, August.
    5. repec:lan:wpaper:3169 is not listed on IDEAS
    6. Robert Buchele & Douglas Kruse & Loren Rodgers & Adria Scharf, 2009. "Show Me the Money: Does Shared Capitalism Share the Wealth?," NBER Working Papers 14830, National Bureau of Economic Research, Inc.
    7. Thomas Cornelissen & John S. Heywood & Uwe Jirjahn, 2010. "Profit Sharing and Reciprocity: Theory and Survey Evidence," SOEPpapers on Multidisciplinary Panel Data Research 292, DIW Berlin, The German Socio-Economic Panel (SOEP).
    8. Joseph R. Blasi & Douglas L. Kruse & Harry M. Markowitz, 2008. "Risk and Lack of Diversification under Employee Ownership and Shared Capitalism," NBER Working Papers 14229, National Bureau of Economic Research, Inc.
    9. Douglas L. Kruse & Joseph R. Blasi & Rhokeun Park, 2008. "Shared Capitalism in the U.S. Economy? Prevalence, Characteristics, and Employee Views of Financial Participation in Enterprises," NBER Working Papers 14225, National Bureau of Economic Research, Inc.
    10. repec:nbr:nberwo:14230 is not listed on IDEAS
    11. C Green & J S Heywood, 2008. "Profit Sharing and the Quality of Relations with the Boss," Working Papers 596078, Lancaster University Management School, Economics Department.
    12. Almudena Cañibano & David Marsden, 2009. "Participation in Organisations: Economic Approaches," CEP Discussion Papers dp0945, Centre for Economic Performance, LSE.
    13. David Marsden & Almudena Cañibano, 2009. "Participation in organisations: economic approaches," LSE Research Online Documents on Economics, London School of Economics and Political Science, LSE Library 25167, London School of Economics and Political Science, LSE Library.

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