January 20, 2015

THE OWNERSHIP SOCIETY:

Obama Should Push to Give Workers a Stake (Peter R. Orszag, 1/20/15, Bloomberg View)

Economists used to worry that shared-capitalism plans would cause shirking: If each worker receives a share of the company's profits regardless of individual effort, it might create an incentive to let someone else do the hard work. Collectively, then, the workers don't do enough work. But a 2008 study found the opposite, that shared-capitalism plans lead workers to encourage one another to be more productive. In surveys of workers taken before and after their company adopted a profit-sharing plan, Douglas Kruse and Joseph Blasi of Rutgers University and Richard Freeman of Harvard University found that afterward, workers said they were more likely to intervene with a lazier co-worker or report the situation to a manager -- because not doing so would cost them money.

Other analyses have found that shared-capitalism plans reduce turnover, improve workers' job satisfaction and raise their compensation. In a separate study, Kruse, Blasi and Freeman examined shared-capitalism models within Fortune magazine's "100 Best Companies to Work For in America." They found that even among companies distinguished by their good labor practices, employees of those that "make more extensive use of group incentive pay" get more involved in company decisions, share more information with one another, trust their supervisors more and "report a more positive workplace culture."

Shared-capitalism plans help companies, too, by raising productivity an average of almost 5 percent, dozens of studies have shown. 

Make every worker a capitalist.
Posted by at January 20, 2015 1:51 PM
  

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