Leadership Investigate

Creating A Bigger Pie? The Effects Of Employee Ownership, Profit Sharing, And Stock Options On Workplace Performance

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Executive Summary

This paper uses data from the surveys of over 40,000 employees in hundreds of facilities in 14 firms and from employees on the 2002 and 2006 General Social Surveys to explore how shared compensation affects turnover, absenteeism, loyalty, worker effort, and other outcomes affecting workplace performance. The empirical analysis shows that shared capitalism has beneficial effects on all outcomes save for absenteeism and that it has its strongest effects on turnover, loyalty, and worker effort when it is combined with: high-performance work policies (employee involvement, training, and job security), low levels of supervision, and fixed wages that are at or above market level.

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