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Shared modes of compensation and firm performance: UK evidence

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  • Conyon, Martin J.
  • Freeman, Richard B.

Abstract

This paper examines the use and consequences of shared compensation plans (profit sharing, profit related pay, SAYE schemes and company stock option plans) in a sample of UK workplaces and firms in the 1990s. The use of these plans has increased over time, in part in response to government programs. The evidence shows that companies and workplaces adopting shared compensation practices have had higher productivity than other firms, but the effects vary among programs, suggesting that the particulars matter a lot in aligning shared compensation and work place activities. Consistent with incentive theory, the evidence also shows that firms and workplaces with shared compensation practices have a higher incidence of shared decision-making/information sharing practices.

Suggested Citation

  • Conyon, Martin J. & Freeman, Richard B., 2002. "Shared modes of compensation and firm performance: UK evidence," LSE Research Online Documents on Economics 20060, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:20060
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    References listed on IDEAS

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    More about this item

    Keywords

    Productivity; shared modes of compensation;

    JEL classification:

    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General

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