Joseph R. Blasi

Employee Stock Ownership and Corporate Performance among Public Companies

This study compares the corporate performance in 1990/91 of two groups of public companies: those in which employees owned more than 5% of the companys stock, and all others. The results of the analysis, which looks at profitability, productivity, and compensation, are consistent with neither negative nor highly positive views of employee ownership, but where differences are found, they are favorable to companies with employee ownership, especially among companies of small size. The circumstances in which employee ownership was used—specifically, whether it was part of a wage/benefit concession package and whether it was involved in a takeover threat—do not appear to have had a significant effect on the 1990 performance levels or 1980–90 performance growth of the firms. Although the authors caution that the data do not permit clear tests of causality, these results are broadly consistent with those of past studies.

Is Disability Disabling in All Workplaces? Workplace Disparities and Corporate Culture

Using nearly 30,000 employee surveys from fourteen companies, we find disability is linked to lower average pay, job security, training, and participation in decisions, and to more negative attitudes toward the job and company. Disability gaps in attitudes vary substantially, however, across companies and worksites, with no attitude gaps in worksites rated highly by all employees for fairness and responsiveness. The results indicate that corporate cultures that are responsive to the needs of all employees are especially beneficial for employees with disabilities.

U.S. High-Performance Work Practices at Century's End

This study examines the incidence, industry differences, and economic environment of work practices in the United States in 1994 and 1997 using census data from a nationally representative random sample of establishments. Self-managed work teams were used by a majority of workers in some sites. Work-related meetings had higher incidence. A high-performance work organization is used in about 1 percent of establishments. There were significant industry differences associated with globalization, namely, imports and exports.

Motivating Employee-Owners in Esop Firms: Human Resource Policies and Company Performance

What enables some employee ownership firms to overcome the free rider problem and motivate employees to improve performance? This study analyzes the role of human resource policies in the performance of employee ownership companies, using employee survey data from 14 companies and a national sample of employee-owners. Between-firm comparisons of 11 ESOP firms show that an index of human resource policies, nominally controlled by management, is positively related to employee reports of co-worker performance and other good workplace outcomes (including perceptions of fairness, good supervision, and worker input and influence). Within-firm comparisons in three ESOP firms, and exploratory results from a national survey, show that employee-owners who participate in employee involvement committees are more likely to exert peer pressure on shirking co-workers. We conclude that an understanding of how and when employee ownership works successfully requires a three-pronged analysis of: 1) the incentives that ownership gives; 2) the participative mechanisms available to workers to act on those incentives; and 3) the corporate culture that battles against tendencies to free ride.

Sharing Ownership via Employee Stock Ownership

There is considerable focus at the moment on equity ownership. According to an article in The Economist, 1 in 2001 over 50 per cent of the adult population in the United States owned equity. This was a 100 per cent increase since the time of the market correction in 1987. Equity ownership is not only a growing phenomenon in the United States but is also occurring worldwide. More than 50 per cent of Australians and 20 per cent of Germans own shares, and equity ownership is growing in virtually every major Western country.2 Equity ownership, in the form of stocks or property, plant and equipment, has always been an important element of the wealth of upper-income people in Western societies. However the recent rise of equity ownership has occurred in the context of four major developments. First, equity markets have grown as a way of raising funds and have prospered as a result of general business expansion, the rise of world capital markets and the wide diffusion of information technology in financial markets.

An assessment of employee ownership in the United States with implications for the EU

The United States has developed a varied and widespread employee ownership sector. This sector has two distinct sub-sectors, the public stock market and small privately-held firms. There is a significant gap in the incidence and development of employee ownership between the European Union (EU) and the US when both sectors are examined. Socioeconmic system differences between the EU and the US suggests that EU employee ownership will be more likely to develop if the EU expands citizen participation in its public stock markets and creates legislative support for selling smaller family businesses to employees. Second, US employee ownership is deficient in direct employee participation in corporate governance. If employees are to have reasonable rights to protect their investment risk, the US will have to converge with the EU in terms of its appreciation of the co-determination rights of workers. The development of employee ownership in the US can be better understood by appreciating the subtleties of how the argument that ownership causes superior performance of employee owned firms is presented. Most employee ownership firms will use the pull model of employee ownership where the firm never makes the extreme commitments of cultural transformation that are necessary to drive better corporate performance. We expect that the push model of employee ownership will continue to be the basis of a more “utopian” image of employee ownership. The pull model of employee ownership is based on the notion that the structure of compensation has changed in modern society and corporations are increasingly looking for ways to provide modest fix wage commitments and pay AFTER performance has taken place. The collapse of the fixed wage system plays a key role in the emergence of employee ownership in the US. Research on the wealth effects of employee ownership supports the perception that employee ownership firms are more generous. It is only this evidence that creates the basis of broad public support of the idea. This last observation helps explain why employee ownership has become so popular in the United States despite the fact that it violates a common precept of investment, namely, that a diversified basket of investments are the most rational market investment. Too much US employee ownership was “bogus employee ownership” based on workers purchasing stock with their savings. To the extent the EU wants to learn about employee ownership from the US, it should not imitate these mistakes.

Worksite Segregation and Performance-Related Attitudes

This article explores the effects of structural inequality on organizational outcomes by examining the relationship between worksite segregation and performance-related attitudes by gender, race, and ethnicity. We use a new data set based on detailed surveys of 21,000 U.S. employees among 207 worksites in 14 companies gathered between 2001 and 2006. To measure workplace segregation, the study used the Duncan dissimilarity index and composition measures in a multilevel model, estimating their relationship to performance-related attitudes (company loyalty, willingness to work hard, perceived company fairness, and turnover intention) among Whites, Blacks, Hispanics, and Asians, separately for men and women within each of these groups. The key finding is that worksite segregation is linked to worse performance-related attitudes for Black, Hispanic, and Asian males, but is generally not linked to such attitudes for the female groups. These results illustrate the effects that segregation can have on organizations and suggest directions for further research that explores the mechanisms connecting diversity to performance-related outcomes.

Employee share ownership and profit sharing in different institutional contexts

This special issue aims to bring together contributions that take a dynamic approach to the development of financial participation, employee share ownership and profit sharing. The approach is premised on the notion that companies have ‘space’ to take a set of key decisions about financial participation. From different angles and experiences in different corners of the world, all contributions show that institutional pressures may be coupled with responses of different actors shaping the form and use of financial participation. The special issue also highlights the importance of future multilevel and mixed methods research to take into account the different institutional forces as well as actors decisions on different levels in shaping the form and use of financial participation.

Worker ownership, participation and control: Toward a theoretical model

The administration of the employee-owned or worker cooperative firm must provide for two conceptually separable functions: organizational governance and the management of work. Three theoretical models tend to shape the thinking of those who design the organization: authoritarian, bargaining, and town meeting or community democracy.We review the experience of self-management in Yugoslavia, the Israeli kibbutzim, Mondragon cooperative system, and employee ownership in the United States. We conclude that the model best designed to favor the growth of employee ownership in the United States will be one that combines certain features of all three theoretical models noted above.

Bringing the Russian State Back in: Explanations of the Derailed Transition to Market Democracy@@@Kremlin Capitalism: Privatizing the Russian Economy@@@Democracy from Scratch@@@Problems of Democratic Transition and Consolidation@@@Russia's 1996 Presidential Election: The End of Polarized Politics

In June 1996, for the first time in thousand years, Russian citizens were given the chance to select their head of state in a democratic election. Michael McFaul analyzes three major factors that combine to explain why Boris Yeltsins victory, should have been expected, discusses the reasons behind Yeltsins victory, and examines its impact on electoral politics in post-Soviet Russia.