Do White Collar Employee Incentives Improve Firm Profitability?

Tutkimustuotos: LehtiartikkeliArticleScientificvertaisarvioitu

Abstrakti

We use proprietary archival compensation panel data from Finnish white-collar employees (WCEs) 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.
AlkuperäiskieliEnglanti
Sivut95-115
JulkaisuJOURNAL OF MANAGEMENT ACCOUNTING RESEARCH
Vuosikerta30
Numero3
DOI - pysyväislinkit
TilaJulkaistu - 2018
OKM-julkaisutyyppiA1 Julkaistu artikkeli, soviteltu

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