Productivity effect of employee participation in asset formation

Abstract

"Various intentions are pursued with the introduction of models of profit-sharing and capital participation for employees. In this paper the effect of employee participation in asset formation as an incentive to increase performance is examined as a way of raising the productivity within an individual firm. Linking employees' pay with the success of the firm can lead to an improvement in the overall success of the firm via an increase in the employees' performance, and thus to higher individual remuneration. Using the data from the 1998 IAB establishment panel this paper first ascertains that firms not using employee participation in asset formation have poorer average productivity values. The median for western German firms not using employee participation is 64% of the value for the firms that do use it (eastern German firms: 72%). In addition to this there are also clear productivity deficits. The results of the econometric estimation model confirm the mainly positive effect of employee participation in asset formation which was determined both in the literature analysis carried out by the OECD (1995) and in our own." (Author's abstract, IAB-Doku) ((en))

Cite article

Möller, I. (2000): Produktivitätswirkung von Mitarbeiterbeteiligungen. In: Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Vol. 33, No. 4, p. 565-582.