Ceding Control: An Experimental Analysis of Participatory Management

34 Pages Posted: 27 Feb 2017

See all articles by Philip Mellizo

Philip Mellizo

College of Wooster - Department of Economics

Jeffrey P. Carpenter

Middlebury College - Department of Economics; IZA Institute of Labor Economics

Peter Hans Matthews

Middlebury College - Department of Economics

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

JEL Classification: C92, J33, J53, J54, M50

Suggested Citation

Mellizo, Philip and Carpenter, Jeffrey P. and Matthews, Peter Hans, Ceding Control: An Experimental Analysis of Participatory Management. IZA Discussion Paper No. 10576. Available at SSRN: https://ssrn.com/abstract=2923662

Philip Mellizo (Contact Author)

College of Wooster - Department of Economics ( email )

United States

Jeffrey P. Carpenter

Middlebury College - Department of Economics ( email )

Munroe Hall
Middlebury, VT 05753
United States
802-443-3241 (Phone)
802-443-2084 (Fax)

HOME PAGE: http://community.middlebury.edu/~jcarpent/index.ht

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Peter Hans Matthews

Middlebury College - Department of Economics ( email )

Munroe Hall
Middlebury, VT 05753
United States
802 443-5591 (Phone)
802 443-2084 (Fax)

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