Worker Participation and Ownership

INVOLVING WORKERS IN MANAGEMENT AND OWNERSHIP

In response to declining productivity and increasing foreign competition, many U.S. firms have experimented with new compensation schemes and human resource practices, giving workers a greater say in production decisions, and-- more rarely-- a greater financial stake in the performance of the firm. In most cases, these reforms are still in their infancy, but John Pencavel of Stanford University has tracked a group of firms whose workers have been participating successfully in ownership and decision-making for decades. The employees of these cooperative plywood manufacturing firms in Washington State have full discretionary power over the management of the firm and their compensation is tied directly to firm performance. While this ownership arrangement has its limitations, Pencavel believes the relative success of the firms illustrates an important general principle: worker participation in decision-making and worker participation in ownership work best in combination. Pencavel will author a non-technical book to broadcast what these old plywood firms can teach us about new experiments in labor-management relations.