Does Employee Ignorance Undermine Shared Capitalism?
43 Pages Posted: 18 Aug 2008 Last revised: 4 Aug 2010
Date Written: August 2008
The potential of shared capitalism to improve individual and organizational performance through financial incentives depends on employees knowing about and participating in compensation plans that link rewards to performance. This paper therefore analyzes a survey of employees from multiple companies to assess the extent to which employees are ignorant about company, group, and individual-based incentive pay plans and ESOPs. The findings reveal significant amounts of employee ignorance in both under- and overstating the extent to which such plans apply to them individually.
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