Anti-Shirking Effects of Group Incentives and Human-Capital-Enhancing HR Practices

• Published in: Advances in the Economic Analysis of Participatory & Labor-Managed Firms Vol. 16; pp. 199 - 221
• Main Authors: Kim, Andrea, Han, Kyongji, Blasi, Joseph R., Kruse, Douglas L.
• Format: Book Chapter
• Language: English
• Published: United Kingdom Emerald Group Publishing Limited 01.01.2015; Emerald Publishing Limited
• Subjects: Economics; Labour economics; shirking; human capital; training; group incentives; Employee ownership; profit sharing
• ISBN: 1785603795; 9781785603792
• ISSN: 0885-3339
• DOI: 10.1108/S0885-333920150000016014

Abstract Building on economic and psychological ownership theories, this study investigates whether group incentives can reduce shirking because these practices enable employees to feel psychological ownership that motivates them to prevent their own and coworkers shirking in a collective work setting. We analyzed a sample of 38,475 employees in eight companies that participated in the survey administered by the National Bureau of Economic Research (NBER) in 2005. Our findings reveal that (1) short-term-oriented group incentives (STOGIs) and long-term-oriented group incentives (LTOGIs) are positively related to self-shirking regulation and coworker-shirking intervention; (2) STOGIs have stronger relationships with these anti-shirking outcomes than LTOGIs; and (3) the interaction between LTOGIs and formal training is positively related to these anti-shirking outcomes. Although some scholars are concerned about the free rider problem in the collective working and rewarding structure, our work demonstrates how and why employee shirking may be mitigated in such settings.