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Workplace Democracy in the Lab

Author

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  • Mellizo, Philip

    () (College of Wooster)

  • Carpenter, Jeffrey P.

    () (Middlebury College)

  • Matthews, Peter Hans

    () (Middlebury College)

Abstract

While intuition suggests that empowering workers to have some say in the control of the firm is likely to have beneficial incentive effects, empirical evidence of such an effect is hard to come by because of numerous confounding factors in the naturally occurring data. We report evidence from a real-effort experiment confirming that worker performance is sensitive to the process used to select the compensation contract. Groups of workers that voted to determine their compensation scheme provided significantly more effort than groups that had no say in how they would be compensated. This effect is robust to controls for the compensation scheme implemented and worker characteristics (i.e., ability and gender).

Suggested Citation

  • Mellizo, Philip & Carpenter, Jeffrey P. & Matthews, Peter Hans, 2011. "Workplace Democracy in the Lab," IZA Discussion Papers 5460, Institute for the Study of Labor (IZA).
    • Handle: RePEc:iza:izadps:dp5460
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    1. repec:spr:jesaex:v:3:y:2017:i:1:d:10.1007_s40881-017-0034-1 is not listed on IDEAS
    2. Jörg Franke & Ruslan Gurtoviy & Vanessa Mertins, 2014. "Workers' Participation in Wage Setting and Opportunistic Behavior: Evidence from a Gift-Exchange Experiment," IAAEU Discussion Papers 201407, Institute of Labour Law and Industrial Relations in the European Union (IAAEU).
    3. Gabriel Burdín, 2016. "Equality Under Threat by the Talented: Evidence from Worker‐Managed Firms," Economic Journal, Royal Economic Society, vol. 126(594), pages 1372-1403, August.
    4. John Pencavel, 2013. "Worker cooperatives and democratic governance," Chapters,in: Handbook of Economic Organization, chapter 24 Edward Elgar Publishing.
    5. Philip Mellizo & Jeffrey Carpenter & Peter Hans Matthews, 2017. "Ceding control: an experimental analysis of participatory management," Journal of the Economic Science Association, Springer;Economic Science Association, vol. 3(1), pages 62-74, July.
    6. Sabrina Jeworrek & Vanessa Mertins, 2014. "Wage Delegation in the Field," IAAEU Discussion Papers 201408, Institute of Labour Law and Industrial Relations in the European Union (IAAEU).
    7. Marco Faillo & Costanza Piovanelli, 2017. "Wage delegation and intrinsic motivation: an experimental study," CEEL Working Papers 1701, Cognitive and Experimental Economics Laboratory, Department of Economics, University of Trento, Italia.
    8. Tomas Sjöström & Levent Ülkü & Radovan Vadovic, 2017. "Free to Choose: Testing the Pure Motivation Effect of Autonomous Choice," Carleton Economic Papers 17-11, Carleton University, Department of Economics.
    9. Franke, Jörg & Gurtoviy, Ruslan & Mertins, Vanessa, 2016. "Workers’ participation in wage setting: A gift-exchange experiment," Journal of Economic Psychology, Elsevier, vol. 56(C), pages 151-162.
    10. Claudia Keser & Claude Montmarquette, 2011. "Voluntary versus Enforced Team Effort," Games, MDPI, Open Access Journal, vol. 2(3), pages 1-25, August.
    11. Köhler, Katrin & Pagel, Beatrice & Rau, Holger A., 2015. "How worker participation affects reciprocity under minimum remuneration policies: Experimental evidence," Center for European, Governance and Economic Development Research Discussion Papers 267, University of Goettingen, Department of Economics.
    12. Samuel Bowles & Sandra Polania-Reyes, 2011. "Economic incentives and social preferences: substitutes or complements?," Department of Economics University of Siena 617, Department of Economics, University of Siena.

    More about this item

    Keywords

    real-effort experiment; workplace democracy; decision control rights;

    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • J54 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Producer Cooperatives; Labor Managed Firms

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