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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.

It is a literature review.

There are four reasons to be interested in employee stock ownership and profit sharing today: first, employee share ownership and profit sharing can increase worker pay and wealth and broaden the overall distribution of income and wealth, a key ingredient for a successful democracy. To be a tool for reducing inequality, employee stock ownership and profit sharing must be spread more widely and meaningfully than it is today. Second, employee share ownership and profit sharing provide incentives for more effort, cooperation, information sharing and innovation that can improve workplace performance and company productivity. Third, employee share ownership and profit sharing can save jobs by enhancing firm survival and employment stability, with wider economic benefits that come from decreasing unemployment. Fourth, employee share ownership and profit sharing can create more harmonious workplaces with greater corporate transparency and increased worker involvement in their work lives through access to information and participation in workplace decisions.

Growth has been extraordinarily sluggish in the recovery from the Great Recession and has weakened in advanced countries over a longer period, leading some analysts to believe that the authors have entered a new economic era of small to modest growth. This may turn out to be true, which will increase the importance of growth-enhancing policies. The evidence that firms with employee stock ownership and/or profit-sharing perform better than others suggests that policies that extend ownership would boost the country’s lagging growth rate. The evidence that employee share ownership firms preserve jobs and survive recessions better than others suggests that policies that extend ownership could help stabilize the economy when the next recession comes down the pike.

Because there may be informational or institutional barriers about the benefits of ownership and sharing and the ways firms can introduce such programs that government can help overcome. Government has often played a role in promoting performance-enhancing work practices to enhance overall economy-wide outcomes from higher productivity and innovation, such as the long history of agricultural extension services (since 1887) to spread information on best practices in farming, and employer education on safety practices conducted by the Occupational Safety and Health Administration.

Because of the “externalities” – effects that extend beyond the firm and its members – that greater ownership/profit sharing can bring us. If employee ownership and profit sharing lead to fewer layoffs and firm closures, this can reduce recession-created drops in consumer purchasing power and aggregate demand; government expenditures on unemployment compensation and other forms of support; decreased tax base for supporting schools and infrastructure; and potentially harmful social and personal effects, such as marital breakups and alcohol abuse. Apart from unemployment, more broadly shared prosperity and lower inequality may also have wider benefits for macroeconomic growth, stability and societal outcomes, as described by a number of social scientists. To the extent the ownership and profit sharing is a public good, a nudge in policy to consider the idea makes sense.

Because it is hard to find policy options that are as bipartisan as the shares policy. In The Citizens’ Share, and in other articles and venues, the authors lay out the areas in which there is evidence or logic for in-depth development of, and experimentation with, several broad policy directions, with the details to be worked out by members of Congress based on their deliberations.

This purpose of this paper is to explore to efficacy of influence tactics at the outset of a job interview. Across three empirical studies, five influence tactics were manipulated during a simulated job interview to explore first impressions for candidates with or without a visible disability.

Participants viewed videos of candidates (either in a wheelchair or not) responding to the opening question in a job interview by using one of five influence tactics (i.e. revealing a strong alternative, setting a numerical anchor, demonstrating approachability through imperfections, presenting hard skills that described job-related competencies or presenting soft skills including connecting well with and leading others). Perceptions of trustworthiness, fit for the current job and perceived appropriate salary amount were rated.

Results show that, in general, tactics that might have beneficial effects when used at later moments, including the use of a strong alternate, anchor or imperfection display, may instead harm first impressions of anyone. When discussing specific skills, hard skills helped in both cases. However, the presentation of soft skills helped only the non-disabled job candidate. Trustworthiness acted as a mediator for most of these relationships in both populations.

Results provide insight into how the use of these tactics very early in an interaction unfolds. Further, parsing the use of influence tactics into their effects on specific populations (such as people with disabilities) allows us to better understand the conditions under which they may help or hurt perceptions of employability.

Using a population study, we provide evidence on the important but understudied issue of company survival under employee ownership, as well as on the performance effects of employee ownership and the issue of whether employee ownership substitutes for other pension benefits.

Company survival and pension benefits are assessed using a unique dataset from Dun & Bradstreet of privately held Employee Stock Ownership Plan (ESOP) companies over the 1988–1999 period, matched to non-ESOP companies in the same industry. Performance is assessed using pre/post-comparisons of ESOP adopters in the 1988–1994 period.

Privately held ESOP companies in 1988 were only half as likely as non-ESOP firms to go bankrupt or close over the 1988–1999 period, and only three-fifths as likely to disappear for any reason. The ESOP companies had significantly higher post-adoption annual employment and sales growth, along with higher sales per employee. ESOP companies are four times more likely than their non-ESOP pairs to have defined benefit pension plan and other forms of defined contribution plans.

The greater survival was not explained by higher productivity, or by greater compensation flexibility. The higher survival may instead be tied to complementary policies adopted along with ESOPs to create a more committed and engaged workforce that contributes ideas to enhance survival and is more flexible when economic difficulties arise. The pension results are consistent with other studies on compensation under employee ownership, suggesting that employee ownership is generally used as a form of efficiency wage to provide above-market compensation.

Higher survival among ESOP companies could result in lower job loss and unemployment, potentially providing a public policy rationale for support of employee ownership.

The chapter provides the first examination of company survival in privately held ESOP companies, and one of the few examinations of how ESOPs relate to other pension benefits.

Research on employee ownership has focused on questions of productivity, profitability, and employee attitudes and behavior, while there has been little attention to the most basic measure of performance: survival of the company. This study uses data on all U.S. public companies as of 1988, following them through 2001 to examine how employee ownership is related to survival. Estimation using Weibull survival models shows that companies with employee ownership stakes of 5% or more were only 76% as likely as firms without employee ownership to disappear in this period, compared both to all other public companies and to a closely matched sample without employee ownership. While employee ownership is associated with higher productivity, the greater survival rate of these companies is not explained by higher productivity, financial strength, or compensation flexibility. Rather, the higher survival is linked to their greater employment stability, suggesting that employee ownership companies may provide greater employment security as part of an effort to build a more cooperative culture, which can increase employee commitment, training, and willingness to make adjustments when economic difficulties occur. These results indicate that employee ownership may have an important role to play in increasing job and income security, and decreasing levels of unemployment. Given the fundamental importance of these issues for economic well being, further research on the role of employee ownership would be especially valuable.

Building on economic and psychological ownership theories, this study investigates whether group incentives can reduce shirking because these practices enable employees to feel psychological ownership that motivates them to prevent their own and coworkers shirking in a collective work setting. We analyzed a sample of 38,475 employees in eight companies that participated in the survey administered by the National Bureau of Economic Research (NBER) in 2005. Our findings reveal that (1) short-term-oriented group incentives (STOGIs) and long-term-oriented group incentives (LTOGIs) are positively related to self-shirking regulation and coworker-shirking intervention; (2) STOGIs have stronger relationships with these anti-shirking outcomes than LTOGIs; and (3) the interaction between LTOGIs and formal training is positively related to these anti-shirking outcomes. Although some scholars are concerned about the free rider problem in the collective working and rewarding structure, our work demonstrates how and why employee shirking may be mitigated in such settings.

Past research has found employee ownership to be linked to better attitudes and behaviors. We investigate three possible mechanisms: (a) a selection effect – employees who buy stock in their own company may have better attitudes to begin with; (b) a status effect – employees who have any amount of employee ownership may have better attitudes; and (c) a size of stake effect – employee attitudes and behaviors may be influenced by the size of their employee ownership stake. We used a rich database of over 40,000 employee surveys from one large multinational company and 13 other companies. We find some support for all three mechanisms. Selection effects are indicated by several positive relationships between attitudes and stock that is bought by the employees rather than being granted by the employer. Status and size of stake effects are indicated by several positive relationships between attitudes and stock that is granted by the employer, particularly when the employee ownership is accompanied by high-performance work policies. While dividing employee ownership into bought or granted stock sheds light on the selection issue, the data are cross-sectional so selection and causality cannot be firmly established. There is need for further research on selection versus causality in examining the effects of employee ownership. The results indicate that companies may improve employee attitudes and behaviors of people by granting them stock and by having opportunities for employees to purchase stock. Even the results pointing to selection effects, however, can be important for companies, since offering stock ownership opportunities to employees may be an effective way to identify which employees are most committed to the firm and are likely to become good corporate citizens.

Group incentive schemes have been shown to be positively associated with firm performance but it remains an open question whether this association can be explained by the motivating characteristics of the group-incentive scheme itself, or if this is due to factors that tend to accompany group-incentive schemes. We use a controlled experiment to directly test if group-incentive schemes can motivate sustained individual effort in the absence of rules, norms, and institutions that are known to mitigate free-riding behavior.

We use a controlled lab experiment that randomly assigns subjects to one of three compensation contracts used to incentivize an onerous effort task. Two of the compensation contracts are group-incentive schemes where subjects have an incentive to free-ride on the efforts of their coworkers, and the third (control) is a flat-wage contract.

We find that both group-incentive schemes resulted in sustained, higher performance relative to the flat-wage compensation contract. Further, we do not find evidence of free-riding behavior under the two group-incentive schemes.

Although we do find sustained cooperation/performance over the three work periods of our experiment under the group-incentive schemes, further testing would be required to evaluate whether group-incentive schemes can sustain cooperation over a longer time horizon without complementary norms, policies, or institutions that mitigate free-riding.

By unambiguously showing that group-incentive schemes can, by themselves, motivate workers to provide sustained levels of effort, this suggests that the “1/n problem” may be, in part, an artifact of the rational-actor modeling conventions.

Using the NBER Shared Capitalism Database comprised of over 40,000 employee surveys from 14 firms, we investigate worker attitudes toward employee ownership, profit sharing, and variable pay. Specifically, our study uses detailed survey questions on preferences over profit sharing, forms of employee ownership like company stock and stock option ownership, as well as preferences over variable pay in general, to explore how preferences for these different types of output-contingent pay vary with worker risk aversion, residual control, and views of co-workers and management. Our key results show that, on average, workers want at least a part of their compensation to be performance-related, with stronger preferences for output-contingent pay schemes among workers who have lower levels of risk aversion, greater residual control over the work process, and greater trust of co-workers and management.