Worker responses to shirking under shared capitalism
National Bureau of Economic Research, 2008 - Business & Economics - 53 pages
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 uses new questions on responses to shirking from the General Social Survey and a special NBER survey of workers at over 300 worksites in 14 companies that have some form of group incentive pay to examine how well workers can monitor their peers and what they do when the peers are not working up to speed. The paper finds that: 1) most workers say that they can detect fellow employees who shirk; 2) many report that they would speak to the shirker or report the behavior or a supervisor, and many report that they did so in the past; 3) the proportion that takes action against shirkers is greatest among workers paid under group incentive systems, in smaller companies, and in companies with good employee-management relations; 4) group incentives interact with high-performance human resource policies such as employee involvement teams, training, task variety, low levels of supervision, and good fixed wages to induce more workers to act against shirking; 5) workers in workplaces where there is more anti-shirking behavior report that co-workers work harder, encourage other workers more, and report that their workplace facility is more effective in ways that should raise productivity and profits.
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above-median action against shirkers anti-shirking activity anti-shirking behavior anti-shirking index bonus or stock closely supervised company fixed effects company stock Continental Airlines controls for occupation cooperation distribution of answers dollar value Douglas Kruse ease of observing Employee involvement team employee ownership employees appreciate Eric Maskin Exercising options fellow employees firms free rider free rider problem gain sharing bonus gainsharing GSS and NBER GSS data high-performance Hispanic Hold stock options hourly pay status individual bonuses inerease intervene Job security l=yes Likelihood of talking NBER data NBER survey number of kids observing co-workers occupation 5 dummies ordered probits paper participation peer pressure percent of pay policies poor performance prisoner's dilemma Productivity profit sharing race 4 dummies regressions include controls responses to shirking Richard Freeman scale shared capitalism index shirking behavior shirking employee status 2 dummies supervisor or manager supervisory status take action variables Worker Cooperatives worker responses workers report workplace