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Complementarity of Shared Compensation and Decision-Making Systems: Evidence from the American Labor Market

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Arindrajit Dube
Richard Freeman

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Abstract

This paper examines the relationship between shared capitalist modes of pay and shared modes of decision-making via employee involvement and related committees and between them and measures of productivity and worker well-being in two data sets: the employee based Worker Participation and Representation Survey and the California Establishment Survey. It finds in both data sets that the forms of shared compensation are complementary in the sense that they are more likely to be found together than if firms chose them separately; that shared compensation systems are positively associated with shared decision-making; and that combining shared compensation systems and employee involvement has greater impacts on outcomes than each system by itself.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 14272.

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Date of creation: Aug 2008
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Handle: RePEc:nbr:nberwo:14272

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Find related papers by JEL classification:
J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
J54 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Producer Cooperatives; Labor Managed Firms
L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Paul Osterman, 1994. "How common is workplace transformation and who adopts it?," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 47(2), pages 173-188, January.
  2. Richard B. Freeman & Morris M. Kleiner, 1998. "The Last American Shoe Manufacturers: Changing the Method of Pay to Survive Foreign Competition," NBER Working Papers 6750, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  3. James A. Brickley & Kathleen T. Hevert, 1991. "Direct Employee Stock Ownership: An Empirical Investigation," Financial Management, Financial Management Association, vol. 20(2), Summer.
  4. Edward P. Lazear, 1999. "Output-based Pay: Incentives or Sorting?," NBER Working Papers 7419, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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This page was last updated on 2008-12-3.

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