Share capitalism and worker wellbeing.
Alex Bryson1, Andrew E Clark2, Richard B Freeman3
1UCL, NIESR, and IZA, United Kingdom.
Labour Economics
|July 21, 2017
Summary
Worker wellbeing depends on how pay is determined, not just the amount. Group-based pay schemes, like profit sharing and share ownership, boost job satisfaction beyond higher wages.
Area of Science:
- Workplace Psychology
- Human Resource Management
- Organizational Behavior
Background:
- Traditional focus on individual performance-related pay (PRP) in compensation research.
- Limited understanding of how the determination of compensation impacts worker wellbeing.
- Need to explore the role of group-based performance schemes in job satisfaction.
Purpose of the Study:
- To investigate the impact of compensation determination methods on worker wellbeing.
- To examine the relationship between group-performance schemes and job satisfaction.
- To assess if pay methods influence wellbeing independently of wage levels.
Main Methods:
- Utilized a variety of statistical methods to control for unobserved individual and job-specific characteristics.
- Analyzed the association between receipt of group-performance schemes and job satisfaction.
- Controlled for wage levels to isolate the effect of pay determination methods.
Main Results:
- Group-performance schemes (profit shares, group bonuses, share ownership) are linked to higher job satisfaction.
- This positive association persists even after accounting for wage levels.
- Share ownership (share capitalism) contributes to wellbeing by fostering reciprocity and mitigating negative job quality effects.
Conclusions:
- The method of compensation determination significantly influences worker wellbeing.
- Group-based pay schemes enhance job satisfaction beyond the effects of higher wages.
- Share capitalism positively impacts wellbeing through reciprocity and by buffering adverse job conditions.
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