The Effect of Employee Involvment on Firm Performance: Evidence from an Econometric Case Study

We provide some of the most reliable evidence to date on the direct impact of employee involvement through participatory arrangements such as teams on business performance. The data we use are extraordinary --daily data for rejection, production and downtime rates for all operators in a single plant during a 35 month period, almost 53,000 observations. Our key findings are that: (i) membership in offline teams initially enhances individual productivity by about 3% and reduces rejection rates by more than 25%; (ii) these improvements are dissipated, typically at a rate of 10 to 16% per 100 working days; (iii) the introduction of teams is initially accompanied by increased rates of downtime and these costs diminish over time. In addition: (iv) the performance-enhancing effects of team membership are greater and more long-lasting for team members who are solicited by management to join teams; similar relationships exist for more educated team members. These findings, which are best interpreted as lower bound estimates of the effects of teams, are consistent with the diverse hypotheses including propositions that: (i) employee involvement will produce improved enterprise performance through diverse channels including enhanced discretionary effort by employees; (ii) various kinds of complementarities accompany many changes in organizational design (such as between teams and formal education); (iii) the introduction of high performance workplace practices are best viewed as investments, though there are significant learning effects; (iv) differences in performance for team members solicited by mangers compared to those who volunteer are consistent with various hypotheses including management signaling and opportunistic behavior by employees, but inconsistent with hypotheses based on Hawthorne effectshttp://deepblue.lib.umich.edu/bitstream/2027.42/39998/2/wp612.pd

Cooperative Game Theory within Multi-Agent Systems for Systems Scheduling

Research concerning organization and coordination within multi-agent systems continues to draw from a variety of architectures and methodologies. The work presented in this paper combines techniques from game theory and multi-agent systems to produce self-organizing, polymorphic, lightweight, embedded agents for systems scheduling within a large-scale real-time systems environment. Results show how this approach is used to experimentally produce optimum real-time scheduling through the emergent behavior of thousands of agents. These results are obtained using a SWARM simulation of systems scheduling within a High Energy Physics experiment consisting of 2500 digital signal processors.Comment: Fourth International Conference on Hybrid Intelligent Systems (HIS), Kitakyushu, Japan, December, 200

Population Age structure and the budget deficit

The author focuses on the effects of age structure changes on the size of budget deficits of national governments. More specifically, he determines whether differences in age structure can account for the observed differences in budget deficits across countries as well as across time. By way of an extension of the untested theory of negative bequest motives advocated by Cukierman and Meltzer (1989), the author argues that the commonly accepted notion that population aging tends to increase the budget deficits of economies is theoretically consistent. However, preliminary results from country and time fixed-effects panel regressions, estimated from 1975 to 1992 over 55 industrial and developing countries, indicate statistical evidence for this postulation is present only in the developing countries but not in the industrial countries.Payment Systems&Infrastructure,Economic Theory&Research,Banks&Banking Reform,Public Sector Economics&Finance,Environmental Economics&Policies,Economic Stabilization,Economic Theory&Research,Public Sector Economics&Finance,National Governance,Environmental Economics&Policies

The Effect of Employee Involvment on Firm Performance: Evidence from an Econometric Case Study

We provide some of the most reliable evidence to date on the direct impact of employee involvement through participatory arrangements such as teams on business performance. The data we use are extraordinary --daily data for rejection, production and downtime rates for all operators in a single plant during a 35 month period, almost 53,000 observations. Our key findings are that: (i) membership in offline teams initially enhances individual productivity by about 3% and reduces rejection rates by more than 25%; (ii) these improvements are dissipated, typically at a rate of 10 to 16% per 100 working days; (iii) the introduction of teams is initially accompanied by increased rates of downtime and these costs diminish over time. In addition: (iv) the performance-enhancing effects of team membership are greater and more long-lasting for team members who are solicited by management to join teams; similar relationships exist for more educated team members. These findings, which are best interpreted as lower bound estimates of the effects of teams, are consistent with the diverse hypotheses including propositions that: (i) employee involvement will produce improved enterprise performance through diverse channels including enhanced discretionary effort by employees; (ii) various kinds of complementarities accompany many changes in organizational design (such as between teams and formal education); (iii) the introduction of high performance workplace practices are best viewed as investments, though there are significant learning effects; (iv) differences in performance for team members solicited by mangers compared to those who volunteer are consistent with various hypotheses including management signaling and opportunistic behavior by employees, but inconsistent with hypotheses based on Hawthorne effectsProductivity, High Performance Work Practices, Employee Participation, Human Resource Management Practices

"The Effects of Worker Participation, Employee Ownership and Profit Sharing on Economics Performance: A Partial Review"

For alternative sharing arrangements we review theory on the economic effects on employment, productivity, investment, income and wealth distribution, and life cycle and survival. We find that predictions are often ambiguous and that sometimes the nature and size of the specific effect is determined in part by the particular institutional arrangements. Next recent econometric work is studied. We review studies using aggregate and industry level time series data for Japan as well as studies that use enterprise and establishment level data for firms in North America and Western Europe. Worker participation, employee share ownership and profit sharing schemes are often found to affect that studies obtained conflicting results. However, available evidence is strongly suggestive that for employee ownership schemes to have a strong positive impact they need to be accompanied by provision for worker participation in decision making.

Do Innovative Workplace Practices Foster Mutual Gains? Evidence From Croatia

New survey data for more than 470 employees (more than 80% of production workers) in a single Croatian manufacturing firm exhibits large variation in participation in innovative work practices (IWPs) notably online teams, offline teams, employee ownership, and incentive pay. Amongst IWPs, probit estimates reveal that membership in offline teams most often yields favorable outcomes for firms, notably enhanced provision of discretionary effort by employees and more likelihood of peer monitoring, as well as improved worker outcomes, including enhanced job satisfaction and higher employee involvement. Other IWPs usually are associated with similar favorable outcomes for firms and workers. Participation in sets of IWPs, that include offline teams and financial incentives, is found to yield benefits to both employees and firms. Our findings provide support for the proposition that IWPs will produce mutual gains and also help to identify key channels through which different IWPs work. Women also perceive that they are less empowered and report less willingness to engage in peer monitoring.innovative work practices; employee ownership; Croatia; econometric case study.

Choice of Ownership Structure and Firm Performance: Evidence from Estonia

In this paper we use rich panel data for a representative sample of Estonian enterprises to analyse diverse issues related to the determinants of ownership structures and ownership changes after privatisation. A key focus is to determine whether ownership changes are related to economic efficiency. While employee owned firms are found to be much more prone than other firms to switch ownership categories, often “employee owned” firms remain “insider-owned” as ownership passes from current employees to managers and former employees. Logit analyses of the determinants of ownership structures and ownership changes provides mixed support for several hypotheses. As predicted: (i) wealth and resource constraints play a crucial role in the determination of ownership, with foreigners buying firms with the highest equity levels and insiders buying firms with the lowest equity valuations; (ii) risk aversion explains subsequent ownership changes, especially away from employee ownership; (iii) allocation of ownership depends on the pre-privatisation origin and location of the firm, and these factors also influence subsequent ownership changes. Finally we compare our findings with those achieved by using more conventional approaches to analyze efficiency that use very similar data. Reassuringly the evidence presented in this paper is consistent with the view that efficiency considerations drive ownership changes (while earlier analysis for Estonia and for many other transition economies has identified the impact of ownership on economic performance.) However, the findings in this paper also establish that there are important influences besides economic efficiency that affect enterprise ownership and ownership changes.http://deepblue.lib.umich.edu/bitstream/2027.42/39945/3/wp560.pd