Patterns of organizational ownership and employee well-being in Britain

This 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.