Profit-sharing and productivity

an international comparison
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by
University of Warwick Department of Economics , Coventry
StatementJohn Cable and Nicholas Wilson.
SeriesWarwick economic research papers / University of Warwick Department of Economics -- no.301
ContributionsWilson, N.
ID Numbers
Open LibraryOL13840603M

: Profit Sharing: Does It Make a Difference?: The Productivity and Stability Effects of Employee Profit-Sharing Plans: (): Kruse, Douglas L.: BooksCited by: There has been a long tradition of academic research on the nature and consequences of employee financial participation. Due to its various potential benefits, this topic has recently attracted renewed interest both among academics and policy-makers in Europe.

Marija Ugarkovic examines whetherBrand: Deutscher Universitätsverlag. Profit sharing is thought to affect firm productivity in three main ways—by making wages more flexible to financial conditions of the firmthrough substituting profit sharing payments for fixed wages (Weitzman and Kruse ); by attracting, developing, and retaining.

Profit Sharing and Company Performance. The author uses a large-scale German establishment panel and proves the beneficial impact on productivity and employment.

In addition, she shows that profit sharing does not lead to a reduction of base wages but is paid in addition to regular wages. It becomes evident that profit sharing has more. Existing research tends to show that profit-sharing plans for employees are associated with higher company productivity and profitability, though the causality and mechanisms are : Douglas Kruse.

The conditions under which profit sharing affects workplace productivity have never been fully understood. Using panel data, this paper examines whether there is any link between adoption of an employee profit sharing plan and subsequent productivity growth in Canadian establishments, and whether this relationship is affected by various contextual factors, particularly use of work teams.

ety of influences on productivity, this study found that profit-sharing adoption is associated with increases of to 5 percent, which are maintained with no subsequent positive or negative trend. The average productivity increases are found to be larger for smallCited by:   When Young joined the team, the company started profit sharing and rolled out an incentive program in along with it.

From there, revenue and profit grew. Landscape Workshop landed the 47th spot on this year’s Top list with $ million in revenue, up from 54 in Read the full story from the May issue here. In France, profit sharing is compulsory for the largest firms.

In other countries, including the UK and the U.S., tax breaks have helped support profit sharing and share ownership. Symposium on Profit Sharing and Productivity Motivation ( Racine, Wis.).

Profit sharing and productivity motivation. Madison, Center for Productivity Motivation, School of Commerce, University of Wisconsin [?] (OCoLC) Material Type: Conference publication: Document Type: Book: All Authors / Contributors: University of Wisconsin.

(vi) Profit-sharing acts as a driving force for higher production and productivity. The workers take more interest and initiative leading to higher production. (vii) The share of workers in the profits depends upon the efforts, initiative and hard work of the employer and employees. Profit-sharing is an example of a variable pay plan.

In profit-sharing, company leadership designates a percentage of annual profits as a designated pool of money to share with employees. Or, it can be a portion of employees such as executives or managers and those above them as situated on an organization : Susan M. Heathfield.

In his little book Profit Sharing, Dr. Chapman provides practical advice on how to make money an asset—as opposed to a headache—in your marriage. His straightforward conversational style will help you and your spouse quickly identify weak areas and reframe the way you view your finances/5(4).

This study is an investigation of the effect of profit-sharing on labor productivity. When monitoring labor performance is costly for management, a regular wage/salary contract is insufficient to induce profit-maximizing behavior from the worker.

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The authors demonstrate that when this profit-maximizing behavior can be induced only through profit-sharing, a linear profit-sharing program will Cited by: 1.

Profit Sharing and Productivity One of the basic goals/objectives of a firm is to increase the productivity. By profit sharing, the compensation strategy is linked to the business strategy. The greatest management principle in the world is "people do what they are rewarded for doing".

This paper presents a model showing that profit sharing is subject to the 1/N problem in the case of independent worker productivity but not in the case of interdependent worker productivity.

This implies the role of firm size on the likelihood of profit sharing will differ by the nature of the underlying by: Kruse details the reasons profit sharing plans are implemented and the systemic factors within firms, particularly in relation to unions, that influence whether or not they are successful.

Presented is evidence based on a unique database developed from public U.S. firms - matched to firm performance over the period of - on the two central theories related to profit sharing: 1 Cited by: Profit sharing can lead to higher productivity and thus to higher firm profitability and employee wages.

It may also enhance employment stability by enabling firms to adjust wages during downturns Author: Tony Fang. With respect to compensation schemes themselves, profit sharing does appear to raise productivity, although it is not clear that the productivity gains are sufficient to pay for profit-based supplements to wage-based compensation.

There is much weaker evidence that ESOPs have any material productivity benefits. Profit sharing: Consequences for workers Profit sharing, a formal “bonus” program based on firm profitability, can provide strong employee motivation if properly designed Keywords: profit sharing, employee earnings, worker attitudes and behaviors, workplace productivity Cited by: 1.

Introduction. The relationship between profit sharing and productivity has been discussed widely in the economic literature.

The primary motive for an introduction of profit sharing is the employer's intent to pass on a share of the profits to the employees in order to align their interests with her by:   Paying for Productivity and Martin L.

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Weitzman and Douglas L. Kruse discuss the implications of profit sharing and related forms of pay for group Cited by: Downloadable (with restrictions). New estimates for West Germany indicate overall productivity differentials of percent in favor of firms practicing profit sharing.

These compare with estimates of percent for comparable British firms reported in a recent issue. Like the U.K. results, they reveal important interactions between profit sharing and other firm-specific characteristics.

Controlling for a variety of influences on productivity, profit sharing adoption is found to be associated with average productivity increases of %, with no subsequent positive or negative by: Get this from a library.

Profit sharing: does it make a difference?: the productivity and stability effects of employee profit-sharing plans. [Douglas Kruse]. Cahuc, Pierre & Dormont, Brigitte, "Profit-sharing: Does it increase productivity and employment. A theoretical model and empirical evidence on French micro data," Labour Economics, Elsevier, vol.

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4(3), pagesSeptember. Proponents of profit-sharing say that it provides strong productivity incentives to workers, virtually eliminates the need for layoffs and helps businesses ride through recessions with relative.

Deliberate profit mismanagement – Some companies implement the concept of profit-sharing at the onset to grab all its advantages like employee retention and increased efficiency and productivity.

When the management later realize the amount that will have to be shed as part of the allocation scheme, they might suppress the profits by.

One potential solution is broad-based profit-sharing programs. Together with job training and opportunities for workers to participate in problem-solving and decision-making, such programs have been shown to foster employee engagement and loyalty, reduce turnover, and boost productivity and profitability.

Profit sharing also benefits workers. Profit-sharing is a type of a group-based pay for performance with a long history. Very well doc-umented cases of profit-sharing can be found e.g. in Britain from ; Matthews (, p.

) even noted that “we know more about the extent of profit-sharing in than in ”. Broadly. Productivity – 4 Ways to Improve Productivity and Quality of Products. It is vital to develop a high rate of productivity because it is the foundation of the business’s future growth.

There are many ways by which productivity can be increased: i. Adoption of up to date technology in machines and equipment. ii.The People Productivity Process™ Grounded and guided by the type of research summarized in this paper, as well as the research and scholarship of our founder, Dr. Thomas Gordon, Gordon Training International provides proven, tested resources for empowering people and their organizations.A profit-sharing plan includes awarding employees a share in the profits of a company.

The profit calculation can be on a quarterly or yearly earnings basis. This process, in turn, results in boosting the morale and productivity of the respective employees.