Who Has a Better Idea? Innovation, Shared Capitalism, and HR Policies
We investigate the relationship of "shared capitalist" compensation systems - profit/gainsharing, employee ownership, and stock options - to the culture for innovation and employees' ability and willingness to engage in innovative activity. Using a large dataset with over 25,000 employee surveys in over 200 worksites of a large multinational organization, we find that both shared capitalism compensation and high performance work policies contribute to these innovation outcomes. Owning company stock is the most consistently positive compensation variable in predicting both an innovation culture and willingness to engage in innovative activity. We also find that shared capitalism and high performance work policies have stronger effects in predicting an innovation culture when they are combined, and that the effects of shared capitalism and high performance work policies are partially, but not wholly, mediated through greater employee alignment with company strategy. The findings are consistent with agency theories predicting that the principal agent problem can be addressed by a combination of shared incentives and cooperative culture which encourages mutual monitoring and opportunities to share information.
|Date of creation:||Aug 2008|
|Date of revision:|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
Web page: http://www.nber.org
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Joseph Blasi & Robert Buchele & Richard Freeman & Douglas Kruse & Chris Mackin & Loren Rodgers & Adria Scharf, 2004.
"Motivating Employee Owners in ESOP Firms: Human Resource Policies and Company Performance,"
CEP Discussion Papers
dp0658, Centre for Economic Performance, LSE.
- Douglas Kruse & Richard Freeman & Joseph Blasi & Robert Buchele & Adria Scharf, 2003. "Motivating Employee-Owners in ESOP Firms: Human Resource Policies and Company Performance," NBER Working Papers 10177, National Bureau of Economic Research, Inc.
- Douglas Kruse & Joseph Blasi & Robert Buchele & Adria Scharf & Loren Rodgers & Chris Mackin & Richard B. Freeman, 2004. "Motivating employee owners in ESOP firms: human resource policies and company performance," LSE Research Online Documents on Economics 19930, London School of Economics and Political Science, LSE Library.
- Nick Bontis, 2002. "Managing An Organizational Learning System By Aligning Stocks and Flows," Journal of Management Studies, Wiley Blackwell, vol. 39(4), pages 437-469, 06.
- Kochan, Thomas A., 1996. "What works at work : overview and assessment," Working papers 3886-96., Massachusetts Institute of Technology (MIT), Sloan School of Management.
- Josh Lerner & Julie Wulf, 2007.
"Innovation and Incentives: Evidence from Corporate R&D,"
The Review of Economics and Statistics,
MIT Press, vol. 89(4), pages 634-644, November.
- Josh Lerner & Julie Wulf, 2006. "Innovation and Incentives: Evidence from Corporate R&D," NBER Working Papers 11944, National Bureau of Economic Research, Inc.
- Henderson, Rebecca. & Cockburn, Iain., 1994. "Measuring competence? : exploring firm effects in pharmaceutical research," Working papers 3712-94., Massachusetts Institute of Technology (MIT), Sloan School of Management.
- Van de Ven, Andrew R., 1986. "Central Problems in the Management of Innovation," Agricultural Research Policy Seminar 139708, University of Minnesota Extension.
- Andrew H. Van de Ven, 1986. "Central Problems in the Management of Innovation," Management Science, INFORMS, vol. 32(5), pages 590-607, May.
- John Paul Macduffie, 1995. "Human Resource Bundles and Manufacturing Performance: Organizational Logic and Flexible Production Systems in the World Auto Industry," ILR Review, Cornell University, ILR School, vol. 48(2), pages 197-221, January.
When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:14234. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.