The efficiency of wages, profit sharing, and stock. Issue 3 (9th December 2019)

• Record Type: Journal Article
• Authors: Weltmann, Dan
• Is Part Of: Journal of participation and employee ownership. Volume 2: Issue 3(2019)
• Page Start: 222
• Page End: 235
• Publication Date: 2019-12-09
• Subjects: Wages -- ESOP -- Employee ownership -- Profit sharing -- Stock-based compensation -- Efficiency wage theory; Employee ownership -- Periodicals; Employee stock options -- Periodicals; Management -- Employee participation -- Periodicals; 658.3152
• DOI: 10.1108/JPEO-09-2019-0021
• Languages: English
• ISSNs: 2514-7641

Abstract

Abstract : Purpose: The purpose of this paper is to examine which forms of compensation are more efficient at affecting employee attitudes, thus extending efficiency wage theory from wage-based compensation to profit sharing and stock-based compensation. Design/methodology/approach: Three models of efficiency wage theory were tested: shirking, turnover and gift exchange. The effects of those three modes of compensation (wages, profit sharing and stock) were contrasted for the three models of efficiency wage theory. Findings: The findings were that raising wages is the most efficient form of compensation in the turnover and shirking models, while in the gift exchange model profit sharing and stock-based compensation may function like efficiency wages. Originality/value: This is the first study of this particular issue.