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Profit Sharing and Gainsharing: A Review of Theory, Incidence, and Effects

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  • Derek C. Jones

    (The Jerome Levy Economics Institute)

  • Takao Kato

    (The Jerome Levy Economics Institute)

  • Jeffrey Pliskin

    (The Jerome Levy Economics Institute)

Abstract

The slowdown in productivity growth since the 1970s has led to increased interest in alternative compensation schemes—such as profit sharing and gainsharing—that might raise worker productivity and reduce turnover. In this working paper, Jones, Kato, and Pliskin summarize the rise in popularity of profit sharing (PS) and gainsharing (GS) plans; review existing theoretical and empirical work on PS and GS; and highlight findings that relate the effectiveness of such programs at raising productivity and enhancing employment stability. They also note that some existing studies contain some econometric problems relating to plan and model variables; there are measurement problems as well. Their paper primarily focuses on PS plans.

Suggested Citation

  • Derek C. Jones & Takao Kato & Jeffrey Pliskin, 1999. "Profit Sharing and Gainsharing: A Review of Theory, Incidence, and Effects," Macroeconomics 9903010, EconWPA.
  • Handle: RePEc:wpa:wuwpma:9903010
    Note: Type of Document - Acrobat PDF; prepared on IBM PC; to print on PostScript; pages: 32; figures: included
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    References listed on IDEAS

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    Cited by:

    1. Takao Kato, "undated". "Cooperate to Compete, Employee Participation and Productivity: Evidence from a New Survey of Japanese Firms," Economics Public Policy Brief Archive ppb_19, Levy Economics Institute.
    2. Kato, Takao & Lee, Ju Ho & Ryu, Jang-Soo, 2010. "The Productivity Effects of Profit Sharing, Employee Ownership, Stock Option and Team Incentive Plans: Evidence from Korean Panel Data," IZA Discussion Papers 5111, Institute for the Study of Labor (IZA).
    3. KATO Takao & MIYAJIMA Hideaki & OWAN Hideo, 2016. "Does Employee Stock Ownership Work? Evidence from publicly-traded firms in Japan," Discussion papers 16073, Research Institute of Economy, Trade and Industry (RIETI).
    4. Joseph R. Blasi & Richard B. Freeman & Christopher Mackin & Douglas L. Kruse, 2010. "Creating a Bigger Pie? The Effects of Employee Ownership, Profit Sharing, and Stock Options on Workplace Performance," NBER Chapters,in: Shared Capitalism at Work: Employee Ownership, Profit and Gain Sharing, and Broad-based Stock Options, pages 139-165 National Bureau of Economic Research, Inc.
    5. Douglas L. Kruse & Joseph R. Blasi & Richard B. Freeman, 2012. "Does Linking Worker Pay to Firm Performance Help the Best Firms Do Even Better?," NBER Working Papers 17745, National Bureau of Economic Research, Inc.
    6. Cecilia NAVARRA, 2016. "Employment Stabilization Inside Firms: An Empirical Investigation Of Worker Cooperatives," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 87(4), pages 563-585, December.
    7. Takao Kato & Ju HO Lee & Kang-sung Lee & Jang-soo Ryu, 2005. "Employee participation and involvement in korea: evidence from a new survey and field research," International Economic Journal, Taylor & Francis Journals, vol. 19(2), pages 251-281.
    8. Kato, Takao., 2016. "Productivity, wages and unions in Japan," ILO Working Papers 994904643402676, International Labour Organization.
    9. Jones, Derek C. & Kalmi, Panu & Mäkinen, Mikko, 2004. "The Determinants of Stock Option Compensation: Evidence from Finland," Discussion Papers 957, The Research Institute of the Finnish Economy.
    10. Kato, Takao & Kauhanen, Antti, 2013. "Performance Pay and Enterprise Productivity: The Details Matter," ETLA Working Papers 21, The Research Institute of the Finnish Economy.
    11. KATO Takao & KODAMA Naomi, 2015. "Performance-related Pay and Productivity: Evidence from Japan," Discussion papers 15088, Research Institute of Economy, Trade and Industry (RIETI).
    12. Josefina Fernández-Guadaño, 2014. "Employee-owned and capitalist firms: is performance linked to ownership?," Service Business, Springer;Pan-Pacific Business Association, vol. 8(4), pages 541-558, December.
    13. Cecilia Navarra, 2013. "How do worker cooperatives stabilize employment? The role of profit reinvestment into locked assets," Working Papers 1307, University of Namur, Department of Economics.

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    • E - Macroeconomics and Monetary Economics

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