Abstract
This paper analyzes Italian social cooperatives as a typical delivery service firm, focusing on employee incentive systems characterized by “role tension” linked to the dual position of being employee and owner at the same time. The answers to three questions: “Why to incentivize”, “What to incentivize” “How to incentivize” are searched, building on both the lack of employee’s controllability in the sector and the reconstruction of property rights consistent with the characteristics of social cooperatives and the profit non-distribution constraint. The conclusion is that, because they are able to structure a richer incentive set, social cooperatives are more efficient in the provision of social utility services even though they pay lower wages than public organizations and for-profit firms.
The pareconist internationalist says that we ought to receive for our labors remuneration in tune with how hard we have worked, how long we have worked, and how great a sacrifice we have made in our work. We shouldn’t get more because we use more productive tools, have more skills, or have greater inborn talent, much less should we get more because we have more power or own more property. We should get more only by virtue of how much effort we have expended or how much sacrifice we have endured in our useful work. This is morally appropriate, and it also provides proper incentives by rewarding only what we can affect and not what is beyond our control.
Michael Albert (http://www.zmag.org/zparecon/qatrade.htm)
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Notes
- 1.
It is well known that scholars have identified an important aspect often associated with the production and delivery of services (e.g. Normann 2000): i.e., intangibility (Kotler 1983). While manufacturing firms produce tangible products, most services cannot be seen or touched. This gives rise to information asymmetry, where both managers and customers may have difficulty controlling and evaluating the quality of service output.
- 2.
It cannot be conceived as a mere discipline of the “indifference area” based on the allocation of the right to be paid versus the (not controllable) duty to perform (Simon 1947).
- 3.
See Article 2512 of the Italian Civil Code (about the Cooperativa a mutualità prevalente).
- 4.
With the aim of highlighting phenomena where individual contributions are fused into a common, not-separable contribution, we prefer to use the term “communality” in the strict sense of the etymon i.e. “putting in common”.
- 5.
According to Article 2532 of the Italian Civil Code, in meetings, the people eligible to vote are those who have been enrolled as members for at least 3 years. Each member has one vote, whatever the value of their quota or the amount of shares held.
- 6.
Schemes of equal representation, not proportionate to contributions, are typical of economic organisations based on equal rights. The actors’ contributions towards the collective activity, even when of a different nature, are considered equally indispensable.
- 7.
A typical principle of social cooperatives is “the open door” (Articles 2524 and 2528 of the Italian Civil Code), according to which every person whose interest coincides, in terms of homogeneity, with the founding aim of cooperatives, has the right to membership of the cooperative. It follows that the cooperative association act cannot include exclusion norms that limit membership or that may shift the question of choice into the hands of the board of directors. Neither can the freedom of membership be detached from the common interest. As a consequence capital is variable, since it varies with the number of members. The free will of members to work together constitutes one of the keys of their motivation; this is incompatible with any attempt to impose new members on the cooperative.
- 8.
The requirement of stability could represent an organisational answer that is irreconcilable with the requirement of the growth of the cooperative. There is therefore an evident trade-off between respecting rules on incentives, such as the ones described above, and the growth in the number of members, sales proceeds, profits and so on.
- 9.
Mention should be made of the literature on equalizing differences. For a review, along traditional lines, (see Rosen 1986).
- 10.
Nussbaum’s list includes: 1. Life. 2. Bodily Health 3. Bodily Integrity 4. Sense, imagination, thought 5. Emotions 6.Practical reason 7. Affiliation 8. Other species 9. Play 10. Control over one’s environment.
- 11.
As is known, Maslow’s model, which once defined needs as gaps whose lack of satisfaction leads to a rebalancing action, shows the need for design. Maslow’s hierarchy of needs is often depicted as a pyramid consisting of five levels: the four lower levels are grouped together as being associated with physiological needs, while the top level is termed as growth needs associated with psychological needs. In particular, the needs are: Safety needs, Social needs, Esteem needs and Self-actualization.
- 12.
In short, with regard to the factors arising in the labour context, Herzberg’s model proposes the distinction between hygiene factors, linked to elements which, although not negative, are unable to motivate workers, and motivation factors that give workers full satisfaction.
- 13.
On this point, (see Borzaga and Musella 2006).
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Acknowledgements
We are grateful to Sergio Destefanis, who helped us to improve the essay in many points. However, the authors alone remain responsible for errors or omissions
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Musella, M., Troisi, R. (2009). Property Rights and Incentives in Social Cooperatives. In: Musella, M., Destefanis, S. (eds) Paid and Unpaid Labour in the Social Economy. AIEL Series in Labour Economics. Physica, Heidelberg. https://doi.org/10.1007/978-3-7908-2137-6_4
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