Employee Participation Programs, Group-Based Incentives, and Company Performance: A Union-Nonunion Comparison

Abstract

This analysis examines whether union representation positively or negatively influences the effectiveness of employee participation programs and group-based incentives in improving firm performance. Examined at the firm level, a model of the independent and interaction effects of participation, profit and gain sharing, and union representation is estimated against data on 841 manufacturing firms in Michigan in 1989. The evidence indicates that employee participation programs contributed substantially more to performance in unionized firms than in nonunion firms, whereas profit and gain sharing programs contributed substantially more to performance in nonunion firms than in unionized firms.