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Ceding Control: An Experimental Analysis of Participatory Management

Philip Mellizo (), Jeffrey Carpenter () and Peter Matthews ()
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Philip Mellizo: College of Wooster

No 10576, IZA Discussion Papers from Institute of Labor Economics (IZA)

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 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: voice; control; intrinsic motivation; participatory management; real effort; experiment (search for similar items in EconPapers)
JEL-codes: C92 J33 J53 J54 M50 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec, nep-exp, nep-hrm and nep-lab
Date: 2017-02
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Forthcoming in: the Journal of the Economic Science Association

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