Sharing the Love

How would you like to decrease voluntary turnover of your employees by roughly 11% and increase the return on equity of your business by 3.9% compared to similiar firms? A study released from The National Bureau of Economic Research found that firms that make use of group incentive pay with supportive employee policies achieved a reduction of employee turnover and an increase in the return of equity compared with other firms of similar size.  The co-authors Douglas L. Kruse, Joseph R. Blasi, and Richard B. Freeman analyzed 780 firms that applied to “100 best companies to work for in America" from 2005 to 2007.  They found this to be true in companies which they ranked in a "shared capitalism index" that used incentives such as Employee Stock Ownership Plans, cash profit sharing plans, gain sharing plans, Deferred Profit-Sharing Plans, and stock options.  It seems with these motivations employees are less likely to leave a firm.  These firms also had policies that allowed employees to participate in the decision-making process, valued information sharing, teamwork, and high trust supervision which also led to a higher degree of employee stability.  If you would like to read the NBER Digest of this paper follow this link. http://www.nber.org/digest/jun12/w17745.html   To order the entire paper click on this link. http://www.nber.org/papers/w17745

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