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The Benefits and Costs of Employee Suggestions under Gainsharing

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  • Dong-One Kim

Abstract

Using data for the years 1985–92 from a discontinued suggestion program at a manufacturing plant in the United States, this study examines the benefits and costs of suggestions under gainsharing. The implemented suggestions are found to have improved labor productivity and reduced grievances and disciplinary actions, but more robust evidence suggests that they also incurred transaction costs and implementation costs. The author speculates that substantial transaction and implementation costs may be a factor responsible for the typically modest outcomes and generally short longevity of employee involvement programs and high-performance work practices.

Suggested Citation

  • Dong-One Kim, 2005. "The Benefits and Costs of Employee Suggestions under Gainsharing," ILR Review, Cornell University, ILR School, vol. 58(4), pages 631-652, July.
    • Handle: RePEc:sae:ilrrev:v:58:y:2005:i:4:p:631-652
    DOI: 10.1177/001979390505800406
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    References listed on IDEAS

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    Cited by:

    1. Joseph R. Blasi & Richard B. Freeman & Christopher Mackin & Douglas L. Kruse, 2010. "Creating a Bigger Pie? The Effects of Employee Ownership, Profit Sharing, and Stock Options on Workplace Performance," NBER Chapters, in: Shared Capitalism at Work: Employee Ownership, Profit and Gain Sharing, and Broad-based Stock Options, pages 139-165, National Bureau of Economic Research, Inc.
    2. Clint Chadwick & Ji-Young Ahn & Kiwook Kwon, 2012. "Human Resource Management’s Effects on Firm-Level Relative Efficiency," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 51(3), pages 704-730, July.

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