Between one-third and one-half of employees participate directly in company performance through profit sharing, gain sharing, employee ownership, or stock options.
Group incentive systems have to overcome the free rider or 1/N problem, which gives workers an incentive to shirk, if they are to succeed.
This paper addresses whether the risk in shared capitalism makes it unwise for most workers or whether the risk can be managed to limit much of the loss of utility from holding the extra risk.
The authors found that companies with broad-based stock option plans (here, defined as those where most nonmanagement employees receive option grants) had statistically significant higher productivity levels and annual growth rates than public companies in general and their peers.
The Beyster Fellowship Symposium brings together academic leaders and new scholars involved with evaluating broad-based employee ownership (EO) and entrepreneurism. The first symposium was held July 2009 in La Jolla, CA. Over 40 academics shared their research findings and participated in an MIT Enterprise Forum panel discussion, which was attended by more than 200 people. The following are videos of Symposium presentations highlighting multiple dimensions of the history, development, and process of employee ownership.
This paper uses data from NBER 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.
This paper investigates the relationship of ‘shared capitalist’ compensation systems—profit/gain sharing, employee ownership, and stock options—to the culture for innovation and employees’ ability and willingness to engage in innovative activity.
This collection of papers provides background on a number of employee ownership issues.
Almost half of American private-sector employees participate in shared capitalism — employment relations where the pay or wealth of workers is directly tied to workplace or firm performance.
The Employee Ownership Video Collection Teaching Addendum presented by the Foundation for Enterprise Development is divided into four sections, Teaching in Entrepreneurship Programs, the History of Broad-Based Ownership, Innovation and High-Tech, and Money and People. This video outline is designed to explore the ways to incorporate employee ownership in your class curriculum, learn about the early beginnings of employee ownership and how it has evolved especially in the high-tech fields, and to discover the culture of participation embraced by employee-owned businesses.
This study examines the development of economic democracy in the United States since the 1700s with particular emphasis on the last 30 years. The particular focus is on employee ownership…
This paper analyses data on 490 companies with broad-based stock option plans, matched to data from Compustat in order to compare their characteristics and performance to that of other public companies.
There is a significant gap in the incidence and development of employee ownership between the European Union (EU) and the US when both sectors are examined.
The string of business scandals that recently engulfed America painted a picture of corporate chieftains lining their pockets by cutting corners, cooking the books, and duping gullible investors. In doing so, greedy CEOs have hijacked what could be one of the most important business innovations in decades: stock options for all employees.
The growth of ESOPs over the past 25 years is part of a general growth in compensation arrangements linking worker pay to company performance, including profit sharing, gain-sharing, and broad-based stock options in addition to the various methods of employee ownership.
This paper compares the performance of 229 `New Economy’ firms offering broad-based stock options to that of their non-stock option counterparts. A simple comparison of these firms reveals that the former have higher shareholder returns, Tobin’s q and new knowledge generation.
This report compares the performance of corporations that offer their employees broad-based stock option plans to those that do not offer their employees broad-based stock option plans.
The results of this study showed that ESOP companies perform better in the post-ESOP period than their pre-ESOP performance would have predicted.
Until recently, stock options were primarily reserved for senior executives and selected managers in most American corporations. In the last decade or so, however, stock options have become part of the compensation package for an increasing number of rank-and-file employees.
This paper summarizes the findings from over 50 large-sample empirical studies that have been done on employee ownership and broad-based stock option plans in the past 25 years, covering studies on plan adoption, employee attitudes and behaviours, firm performance, and employee wages and wealth.
In this paper, we take on a seemingly very simple set of empirical questions that we hope will shed light on whether employee ownership of firms ‘works’…
Employee ownership in U.S. companies has grown substantially in the past 20 years. This paper reviews and provides some meta-analyses on the accumulated evidence concerning the prevalence, causes, and effects of employee ownership, covering 25 studies of employee attitudes and behaviors, and 27 studies of productivity and profitability (with both cross-sectional and pre/post comparisons).
This study compares the corporate performance in 1990/91 of two groups of public companies: those in which employees owned more than 5% of the company’s stock, and all others.
Employees, always considered important stakeholders in American corporations, are today emerging as a key shareholder group.