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Getting along with Colleagues – Does Profit Sharing Help or Hurt?

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  • John S. Heywood
  • Uwe Jirjahn
  • Georgi Tsertsvadze

Abstract

Theory presents two channels through which profit sharing can cause workers to increase their coworkers' productivity: greater cooperation and increased peer pressure. This paper argues that these generate opposite influences on coworker relations, and that which dominates varies according to circumstances and type of worker. Using German data, we show that, for non‐supervisory men, profit sharing increases cooperation, but that for those who highly value success on the job, it has no influence on cooperation, and for supervisors it reduces cooperation. Moreover, the findings show striking gender differences in the effect of profit sharing. We contend these patterns fit with underlying theoretical expectations.

Suggested Citation

  • John S. Heywood & Uwe Jirjahn & Georgi Tsertsvadze, 2005. "Getting along with Colleagues – Does Profit Sharing Help or Hurt?," Kyklos, Wiley Blackwell, vol. 58(4), pages 557-573, November.
    • Handle: RePEc:bla:kyklos:v:58:y:2005:i:4:p:557-573
    DOI: 10.1111/j.0023-5962.2005.00302.x
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    References listed on IDEAS

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    1. Encinosa III, William E. & Gaynor, Martin & Rebitzer, James B., 2007. "The sociology of groups and the economics of incentives: Theory and evidence on compensation systems," Journal of Economic Behavior & Organization, Elsevier, vol. 62(2), pages 187-214, February.
    2. Samuel Bowles & Herbert Gintis, 1998. "Mutual Monitoring in Teams: The Effects of Residual Claimancy and Reciprocity," Research in Economics 98-08-074e, Santa Fe Institute.
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