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Ceding control: an experimental analysis of participatory management

Published online by Cambridge University Press:  01 January 2025

Philip Mellizo ,
Jeffrey Carpenter  and
Peter Hans Matthews
Philip Mellizo
Affiliation:
Department of Economics, College of Wooster, Wooster, OH, USA
Jeffrey Carpenter*
Affiliation:
Departments of Economics, Middlebury College, IZA, Middlebury, VT, USA
Peter Hans Matthews
Affiliation:
Department of Economics, Middlebury College, Middlebury, VT, USA
*
e-mail: [email protected]
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Abstract

We use an experiment to evaluate the effects of participatory management on firm performance. Participants are randomly assigned roles as managers or workers in firms that generate output via real effort. To identify the causal effect of participation on effort, workers are exogenously assigned to one of the two treatments: one in which the manager implements a compensation scheme unilaterally or another in which the manager cedes control over compensation to the workers who vote to implement a scheme. We find that output is between seven and twelve percentage points higher in participatory firms.

Keywords

VoiceControlIntrinsic motivationParticipatory managementReal effortExperiment

JEL classification

J54: Producer Cooperatives • Labor Managed Firms • Employee Ownership J53: Labor–Management Relations • Industrial Jurisprudence M50: General J33: Compensation Packages • Payment Methods C92: Laboratory, Group Behavior
Type
Original Paper
Information
Journal of the Economic Science Association , Volume 3 , Issue 1 , July 2017 , pp. 62 - 74
Copyright
Copyright © Economic Science Association 2017

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Footnotes

Electronic supplementary material The online version of this article (doi:10.1007/s40881-017-0034-1) contains supplementary material, which is available to authorized users.

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