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Does employee ownership improve performance?

Author

Listed:
  • Douglas Kruse

    (Rutgers University, USA, and IZA, Germany)

Abstract

Employee ownership has attracted growing attention for its potential to improve economic outcomes for companies, workers, and the economy in general, and help reduce inequality. Over 100 studies across many countries indicate that employee ownership is generally linked to better productivity, pay, job stability, and firm survival—though the effects are dispersed and causation is difficult to firmly establish. Free-riding often appears to be overcome by worker co-monitoring and reciprocity. Financial risk is an important concern but is generally minimized by higher pay and job stability among employee owners.

Suggested Citation

  • Douglas Kruse, 2016. "Does employee ownership improve performance?," IZA World of Labor, Institute for the Study of Labor (IZA), pages 311-311, November.
  • Handle: RePEc:iza:izawol:journl:y:2016:n:311
    as

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    References listed on IDEAS

    as
    1. E. Han Kim & Paige Ouimet, 2014. "Broad-Based Employee Stock Ownership: Motives and Outcomes," Journal of Finance, American Finance Association, vol. 69(3), pages 1273-1319, June.
    2. Richard B. Freeman & Joseph R. Blasi & Douglas L. Kruse, 2010. "Introduction to "Shared Capitalism at Work: Employee Ownership, Profit and Gain Sharing, and Broad-based Stock Options"," NBER Chapters,in: Shared Capitalism at Work: Employee Ownership, Profit and Gain Sharing, and Broad-based Stock Options, pages 1-37 National Bureau of Economic Research, Inc.
    3. Joseph Blasi & Richard Freeman & Douglas Kruse, 2016. "Do Broad-based Employee Ownership, Profit Sharing and Stock Options Help the Best Firms Do Even Better?," British Journal of Industrial Relations, London School of Economics, vol. 54(1), pages 55-82, March.
    4. Fathi Fakhfakh & Virginie Pérotin & MÓnica Gago, 2012. "Productivity, Capital, and Labor in Labor-Managed and Conventional Firms: An Investigation on French Data," ILR Review, Cornell University, ILR School, vol. 65(4), pages 847-879, October.
    5. 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, June.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Marina ALBANESE & Cecilia NAVARRA & Ermanno TORTIA, 2017. "Equilibrium unemployment as a worker insurance device: Wage setting in worker owned enterprises," CIRIEC Working Papers 1705, CIRIEC - Université de Liège.
    2. Thomsen, Stephan L, 2018. "Die Rolle der Computerisierung und Digitalisierung für Beschäftigung und Einkommen," Hannover Economic Papers (HEP) dp-645, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
    3. Marina Albanese & Cecilia Navarra & Ermanno Tortia, 2017. "Equilibrium unemployment as a worker insurance device: Worker insurance and wage setting in worker owned enterprises," DEM Working Papers 2017/09, Department of Economics and Management.
    4. Oliver Stettes & Melanie Arntz & Terry Gregory & Ulrich Zierahn & Katharina Dengler & Daniel Veit & Werner Eichhorst & Ulf Rinne, 2017. "Arbeitswelt 4.0: Wohlstandszuwachs oder Ungleichheit und Arbeitsplatzverlust – was bringt die Digitalisierung?," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 70(07), pages 03-18, April.

    More about this item

    Keywords

    employee ownership; profit sharing; economic performance; economic stability; unemployment; economic inequality;

    JEL classification:

    • J54 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Producer Cooperatives; Labor Managed Firms
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects
    • M54 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Labor Management
    • P13 - Economic Systems - - Capitalist Systems - - - Cooperative Enterprises
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions

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