EMPLOYEE PARTICIPATION: AN EVALUATION OF LABOR POLICY ALTERNATIVES

Cheryl L. Maranto

Contemporary Economic Policy, 1994, vol. 12, issue 4, 57-66

Abstract: This paper reviews the theoretical and empirical literature on employee participation (EP) and the legal status of EP programs. The effect of EP on firm performance theoretically is indeterminate. However, properly implemented, EP can increase productivity and advance employee interests. Read literally, the National Labor Relations Act's (NLRA) prohibition of company‐dominated unions prohibits EP in nonunion workplaces. This paper critiques four proposals to amend the NLRA based on the EP literature. EP is most likely to increase productivity if employees receive decision‐making power. Two policies would accomplish this: (i) government mandated employee participation committees or (ii) increased legal protection of unions. The latter policy promotes power‐sharing in a voluntary system. A third approach, abolishing the prohibition of company‐dominated unions without otherwise changing labor laws, would encourage all forms of EP and union decline.

Date: 1994
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