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The Effects of Innovative Work Practices on Firm and Worker Outcomes: Evidence from Lithuania

In: International Perspectives on Participation

Author

Listed:
  • Derek C. Jones
  • Modestas Gelbuda
  • Kimberly Walker

Abstract

Abstract While innovative work practices (IWPs), such as self-directed teams and performance related pay, have become commonplace in firms around the world, little is known about their nature and effects in emerging market countries. This study uses new data collected from face-to-face interviews with large samples of workers from two manufacturing firms in Lithuania in 2005 mainly to investigate hypotheses concerning the effects of IWPs on firm and worker outcomes. In these cases we find: (i) the range of IWPs is limited though particular IWPs, notably self-directed teams, are strongly evident; (ii) in view of the historical legacy, the incidence of some outcomes, notably monitoring, was surprisingly high; (iii) typically self-directed teams positively impact worker outcomes, notably job satisfaction and employee involvement, though effects on monitoring and effort are less frequent; (iv) typically equity ownership and bonuses do not affect worker outcomes, though positive impacts on effort and peer monitoring sometimes are found; (v) the evidence for complementary effects of teams and performance pay or financial participation is very weak. In the main, these findings do not support the mutual gains theory that IWPs positively impact both firm and worker outcomes.

Suggested Citation

  • Derek C. Jones & Modestas Gelbuda & Kimberly Walker, 2014. "The Effects of Innovative Work Practices on Firm and Worker Outcomes: Evidence from Lithuania," Advances in the Economic Analysis of Participatory & Labor-Managed Firms, in: Jaime Ortega (ed.), International Perspectives on Participation, volume 15, pages 121-150, Emerald Publishing Ltd.
  • Handle: RePEc:eme:aeapzz:s0885-333920140000015013
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    Keywords

    Teams; performance related pay; financial participation; mutual gains; Lithuania; M52; D2; J33; L20;

    JEL classification:

    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects
    • D2 - Microeconomics - - Production and Organizations
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General

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