Do White Collar Employee Incentives Improve Firm Profitability?
Research output: Contribution to journal › Article
- University of Oulu
- HEC Montreal
over the period of 2002 to 2011 in order to examine the relationship between performance-based incentives for
WCEs and the future profitability of the firm as well as to determine whether this association is moderated by task
complexity. While many studies examine the determinants and performance effects of CEO compensation, virtually
no evidence has been presented to indicate that explicit financial incentives for WCEs improve the profitability of the
firm. Our empirical results show that performance-based incentives for WCEs are significantly positively related to
the future return-on-assets, return-on-equity, and profit margin ratios of the firm. We also find that this effect comes
from the performance-based incentives for low-level WCEs, corroborating the importance of implementing
performance-based incentives also to low-task complexity jobs.
|Journal||JOURNAL OF MANAGEMENT ACCOUNTING RESEARCH|
|Publication status||Published - 2018|
|MoE publication type||A1 Journal article-refereed|
- white-collar employees, performance-based incentives, firm profitability, task complexity