A Firm Has a Circulation

Abstract

In the early 1990s three researchers ran an unusual field experiment. Susan Hanlon, David Meyer and Robert Taylor studied a gainsharing plan with a control group, measured how employees thought and behaved while it ran, and then kept measuring after the group bonus was taken away. The question was what would be left. The intuitive answer, if gainsharing is an incentive, is nothing. Remove the payment and you remove the reason for the behaviour it paid for. What they found, three months after the bonus ended, was something else: the employees who had been under the plan showed higher moral commitment, more prosocial behaviour and less intention to leave than the control group. One study, at one site, three months out. It cannot say how long the effect lasts or whether it would appear elsewhere. But it is hard to explain if a gainsharing plan is only a price paid for effort. It is easier to explain if the plan changed something about the relationship between the people and the firm, and the change outlived the money.