The impact of financial participation and employee involvement on financial performance: A re-estimation using the 1998 WERS

This note re-iterates McNabb and Whitfield's (1998) empirical investigation of the relationship between workplace performance and various indicators o f employee involvement. McNabb and Whitfield used the 1990 WIRS, whereas ou r reestimation is for the 1998 WERS, Our results differ sharply from theirs ; in particular, we discern no significant association between downward com munication and firm performance, nov do we find that employee share ownersh ip and profit related pay are substitutes. More generally, our findings und erscore the difficulty of specifying the relationship between firm performa nce and employee involvement that is amply reflected in the diversity of fi ndings in the wider literature.