Do Innovative Workplace Practices Foster Mutual Gains? Evidence from Croatia

Abstract

New survey data for more than 470 employees (more than 80% of production workers) in a single Croatian manufacturing firm exhibits large variation in participation in innovative work practices (IWPs) notably online teams, offline teams, employee ownership, and incentive pay. Amongst IWPs, probit estimates reveal that membership in offline teams most often yields favorable outcomes for firms, notably enhanced provision of discretionary effort by employees and more likelihood of peer monitoring, as well as improved worker outcomes, including enhanced job satisfaction and higher employee involvement. Other IWPs usually are associated with similar favorable outcomes for firms and workers. Participation in sets of IWPs, that include offline teams and financial incentives, is found to yield benefits to both employees and firms. Our findings provide support for the proposition that IWPs will produce mutual gains and also help to identify key channels through which different IWPs work. Women also perceive that they are less empowered and report less willingness to engage in peer monitoring.