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Cash Profit Sharing and Labour Productivity in Family Firms: Exploring the Effects of R&D and Capital Intensities

Esra Memili, Frank Mullins | November, 2024

While equity-based employee incentives can positively affect labour productivity in family firms, our understanding of the effect of nonequity-based employee incentives remains limited. Integrating expectancy theory with the socioemotional wealth preservation literature, our study investigates the impact of cash profit sharing (CPS) on family firms’ labour productivity. Specifically, CPS is viewed as a motivational device … Read More

KKR at CHI Overhead Doors (A & B)

Dennis Campbell, Ethan Rouen | June, 2023

This case examines the decision by private equity firm KKR to grant equity to every employee at portfolio company CHI Overhead Doors upon purchasing the company in 2015. The case explores whether this initiative will create shared value, growing profits through better incentive alignment while creating wealth for low-wage manufacturing workers. While CHI witnessed some … Read More

Beyond the Short-Term: the Effects of Broad-Based Employee Ownership on Labor Productivity in Family and Nonfamily Firms

Frank Mullins | January, 2023

Purpose This study investigates whether broad-based employee ownership (BBEO), in isolation and in conjunction with cash profit sharing (CPS), can enhance labor productivity in family firms over nonfamily firms. Design/methodology/approach Hypothesis testing was conducted using cross-sectional time-series regression with a matched sample of 393 family and nonfamily firms listed on the US S&P 500 over … Read More

Does Employee Ownership Improve Performance? Employee Ownership Generally Increases Firm Performance and Worker Outcomes

Douglas Kruse | May, 2022

Employee ownership has attracted growing attention for its potential to improve economic outcomes for companies, workers, and the economy in general, and help reduce inequality. Over 100 studies across many countries indicate that employee ownership is generally linked to better productivity, pay, job stability, and firm survival—though the effects are dispersed and causation is difficult … Read More

PDS: Ring-Fencing the Ranch

Dennis Campbell, Kerry Herman, Tarun Khanna | September, 2020

Pallak Seth, Group CEO of PDS Multinational Fashions, is contemplating options to bring better collaboration across his global apparel supply chain platform. PDS, a group of 50-plus subsidiary companies, each led by its own CEO and with different apparel industry specialties, has grown rapidly over the past decade, yet the industry is increasingly competitive and … Read More

The Case for Employee Ownership

Hilary Abell | May, 2020

The case for employee ownership is undisputed. As philanthropists and government leaders grapple with how to address both long-entrenched and newly-emerging forms of economic insecurity, there is no better time to look to effective but lesser-known solutions, such as employee ownership. Even before the economic crisis brought on by COVID-19, income and wealth inequality and downward economic mobility for frontline workers were truths so obvious that one could visually observe them in most communities. Now, more than ever, we need solutions that create economic resiliency for workers and local economies.

All For One and One For All: A Mechanism Through Which Broad‐Based Employee Stock Ownership and Employee‐Perceived Involvement Practice Create a Productive Workforce

Andrea Kim, Kyongji Han | November, 2019

Drawing on social identity theory, this research frames a multimediational model that delineates how broad‐based employee stock ownership (BESO) and employee‐perceived involvement practice in tandem yield a productive workforce at the organization level. In our theoretical model, we propose that social cohesion and voluntary turnover are collective attitudinal and behavioral outcomes resulting from the shared … Read More

The Labor-Managed Firm: Theoretical Foundations

Gregory K. Dow | May, 2019

In this book, Gregory K. Dow asks the question: “Why are labor managed firms rare in modern economies?” Dow emphasizes the fact that capital is alienable while labor is inalienable. This distinction, together with market imperfections, explains the rarity of labor-managed firms. This book uses modern microeconomics, develops formal models, exploits up-to-date empirical research, and … Read More

Works Councils and Employer Attitudes Toward the Incentive Effects of HRM Practices

Uwe Jirjahn | September, 2018

Purpose A growing number of econometric examinations show that works councils substantially shape the personnel policy of firms in Germany. Firms with works councils make greater use of various human resource management (HRM) practices. This gives rise to the question of whether employers view the shaping of personnel policy positively or negatively. Against this background, … Read More

Shared Core Values of High Performing Employee-Owned Enterprises

Frank Shipper, Richard C. Hoffman | June, 2018

Values represent guidelines for behavior and are important determinants of organizational performance. In addition, employee-owned enterprises (EOEs) tend to outperform traditional organizations. Thus, identifying the core values that underlie successful EOEs should provide insights for improved firm performance. Based on an exploratory comparative analysis of eight high-performing, employee-owned companies, a common set of values that … Read More

Performance Pay and Enterprise Productivity: the Details Matter

Antti Kauhanen, Takao Kato | January, 2018

Purpose The purpose of this paper is to provide novel and rigorous evidence on the productivity effect of varying attributes of performance-related pay (PRP) and shows that the details of PRP indeed matter. Design/methodology/approach In doing so, the authors exploit the panel nature of the Finnish Linked Employer–Employee Data on the details of PRP. Findings … Read More

Ceding Control: An Experimental Analysis of Participative Management

Jeffrey Carpenter, Peter Hans Matthews, Philip Mellizo | March, 2017

We use an experiment to evaluate the effects of participatory management on firm performance. Participants are randomly assigned roles as managers or workers in firms that generate output via real effort. To identify the causal effect of participation on effort, workers are exogenously assigned to one of the two treatments: one in which the manager … Read More

Podcast with Joseph Blasi, Richard Freeman & Douglas Kruse

Douglas Kruse, Joseph Blasi, Richard B. Freeman | June, 2016

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

How Shared Capitalism Affects Employee Withdrawal: An Econometric Case Study of a French-Listed Company

Nicolas Aubert, Xavier Hollandts | May, 2015

The academic literature emphasizes that shared capitalism positively affects employees’ attitudes at work. This paper investigates that issue by testing the relationship between shared capitalism and withdrawal behaviors (turnover and absenteeism). Recent literature interprets shared capitalism as a gift exchange between employers and employees. This paper builds on that literature. The analysis, based on an … Read More

Workplace Democracy in the Lab

Jeffrey Carpenter, Peter Hans Matthews, Philip Mellizo | April, 2014

While intuition suggests that empowering workers to have some say in the control of the firm is likely to have beneficial effects, empirical evidence of such effects is hard to come by because of numerous confounding factors in the naturally occurring data. We report evidence from a real‐effort experiment confirming that worker performance is sensitive … Read More

The Citizen’s Share: Reducing Inequality in the 21st Century

Douglas Kruse, Joseph Blasi, Richard B. Freeman | November, 2013

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. 

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