At the center of the ongoing debate about the causes and cures of inequality in America today is the vast difference in wealth between owners and workers. As many have noted, that gap was not nearly as large in the middle of the twentieth century as it has become in the first two decades of the 21st century, where owners and other executives make many multiples of what workers make – largely through grants of stock in lieu of salary.
Purpose The purpose of this paper is to review the historical background for broad-based ownership in the USA, the development of forms of employee ownership and profit sharing in the USA, the research literature on employee ownership and profit sharing and related employee participation, the development of policy and options for new policies. Design/methodology/approach It … Read More
Work practices and modes of pay have changed in recent decades. The combination of an increasingly educated work force, new information and communication technologies, the influx of AI and big data into business practices from production and sales to human resources, the increased importance of teamwork and the growth of non-standard work arrangements which blur … Read More
Purpose The purpose of this paper is to examine the likely impact of AI robotics technology on the labor market through the lens of comparative advantage. Design/methodology/approach The first section reviews the recent success of AI in outperforming humans in cognitive intense activities such as Go, poker and other strategic games, which portends a shift … Read More
When Workers Become Owners Professors Joseph Blasi, Richard Freeman, and Douglas Kruse explain how sharing the ownership or profits of a company with workers can improve productivity, pay, and work life quality – all while reducing economic inequality. Bonus – Jump on the Bandwagon Professors Blasi, Freeman, and Kruse stay post-interview to discuss why trade unions, business schools, and … Read More
This article analyses the linkages among group incentive methods of compensation (broad‐based employee ownership, profit sharing and stock options), labour practices, worker assessments of workplace culture, turnover and firm performance in firms that applied to the ‘100 Best Companies to Work For in America’ competition from 2005 to 2007. Although employers with good labour practices … Read More
The idea of workers owning the businesses where they work is not new. In America’s early years, Washington, Adams, Jefferson, and Madison believed that the best economic plan for the Republic was for citizens to have some ownership stake in the land, which was the main form of productive capital. This book traces the development of that share idea in American history and brings its message to today’s economy, where business capital has replaced land as the source of wealth creation.
This special edition of The Nation brings together a wide range of articles on new ways to shape capitalism, and to work on economic recovery.
What can be done to reverse the economic disparity in our nation and restore prosperity for all? This paper lays out a policy reform that will help restore the link between economic growth and the earnings of workers so that the recovery re-establishes a prosperous middle class. The reform encourages firms to develop broad-based incentive compensation systems that link employee earnings to the performance of the firm. This reform would give employees access to the capital-related earnings of their companies comparable to that of the senior executives who run these firms.
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.
In the 1990s an increasing proportion of US firms moved toward compensation systems that made part of pay depend on the economic performance of work-groups or the firm.
This paper uses nationally representative linked workplace-employee data from the British 2004 Workplace Employment Relations Survey to examine the operation of shared capitalist forms of pay—profit-sharing and group pay for performance, employee share ownership, and stock options—and their link to productivity.
Apart from the extreme cases that get publicized, are employee stock ownership plans generally good or bad for workers?
This paper summarizes new evidence from the “Shared Capitalism” Project on the extent to which workers’ earnings depend on the performance of their firm or work group in the US and advanced European countries and on the impact of sharing arrangements on economic behavior.
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 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 U.S. labor market is the most laissez faire of any developed nation, with a weak social safety net and little government regulation compared to Europe or Japan.
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 examines the use and consequences of shared compensation plans (profit sharing, profit related pay, SAYE schemes and company stock option plans) in a sample of UK workplaces and firms in the 1990s.