Employee financial participation in Italy

The paper explores the experience gained with employee financial participation – particularly variable remuneration schemes - in Italy over the last three decades. It will first briefly describe the institutional setting, which for many years has been characterized by an absence of specific legislation promoting employee financial participation, the changes introduced in 1993, and subsequent modifications (section 2). The paper proceeds to present the results of various surveys on variable remuneration schemes undertaken in Italy over the last fifteen years, as well as recent empirical work which highlights the degree of diffusion of schemes, the main motivations behind their adoption, and the productivity effects of financial participation in Italy (section 3). The paper also addresses the current political debate in Italy regarding the reforms of the system of remuneration and corporate governance, in which participatory forms of enterprise have acquired increasing interest (section 4), before drawing the main conclusions (section 5).