Abstract
AbstractThis paper seeks to contribute to the current debate about corporate governance and work relations in two ways: it extends the analysis to include employees’ subjective well‐being and it considers a wider range of ownership models using Hansmann's typology as a guide. It argues that a key input into subjective well‐being is provided by the scope to undertake work that is intrinsically as well as extrinsically rewarding. Rosen's theory of compensating wage differences is used as a lens to examine the problems of contracting over the intrinsic and extrinsic benefits of jobs as the former are largely intangible, whereas the latter are more easily codified and enforced. This asymmetry gives rise to moral hazard problems, which make the former more dependent on trust. Ownership models help to resolve this because they provide clear signals about an employer's value priorities, and its likely adherence to them after hiring. The study uses data from the British Workplace Employment Relations Survey. The results suggest that ownership models do indeed facilitate different trade‐offs between intrinsic and extrinsic rewards that may be beneficial to many workers, warranting more attention to alternative forms of ownership to promote greater employee well‐being.
Highlights
Recent decades have seen a rapidly growing interest in the effects of corporate governance on firms’ employment relations and human resource practices
To examine the effect of ownership models on employee well-being, this paper uses the lens of compensating wage differences (CWDs) theory because that focuses explicitly on how workers’ objectives, their ‘utility’, encompass both material, extrinsic and subjective, intrinsic, benefits
The big switches in the WERS panel occurred between public limited company (PLC) and private limited companies, where about 6% of workplaces overall moved in either direction
Summary
Recent decades have seen a rapidly growing interest in the effects of corporate governance on firms’ employment relations and human resource practices. To examine the effect of ownership models on employee well-being, this paper uses the lens of compensating wage differences (CWDs) theory because that focuses explicitly on how workers’ objectives, their ‘utility’, encompass both material, extrinsic and subjective, intrinsic, benefits. It explains how employers may position themselves on labour markets by structuring the jobs they offer in order to attract workers seeking different bundles of these benefits. The two investor-owned models, the PLC and the non-family private limited company, provide benchmarks against which the others can be compared because they have been the focus of much of the recent debate and are the most strongly associated in theory with prioritizing extrinsic rewards
Sign-in/Register to view highlights & summary Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
