Profit Sharing and the Quality of Relations with the Boss

Lancaster University Management School Working Paper No. 2008/013

29 Pages Posted: 25 Sep 2008

See all articles by Colin P. Green

Colin P. Green

Department of Economics

John S. Heywood

University of Wisconsin at Milwaukee

Date Written: September 24, 2008

Abstract

Profit sharing generates conflicting changes in the relationship between supervisors and workers. It may increase cooperation and helping effort. At the same time it can increase direct monitoring and pressure by the supervisor, and mutual monitoring and peer pressure from other workers that is transmitted through the supervisor. Using data on satisfaction with the boss, we initially show that workers under profit sharing tend to have lower satisfaction with their supervisor. Additional estimates show this is largely generated by groups of workers who would be least likely to respond to increased supervisory pressure with increase effort: women, those with dependents and those with health limitations. Despite this finding, profit sharing seems to have little or no influence on overall job satisfaction as the reduction in satisfaction with the boss is offset with increased satisfaction with earnings, a finding consistent with profit sharing enhancing productivity and earnings.

Keywords: Mutual Monitoring, Job Satisfaction, Supervision

JEL Classification: J28, J33, J53

Suggested Citation

Green, Colin P. and Heywood, John S., Profit Sharing and the Quality of Relations with the Boss (September 24, 2008). Lancaster University Management School Working Paper No. 2008/013, Available at SSRN: https://ssrn.com/abstract=1272983 or http://dx.doi.org/10.2139/ssrn.1272983

Colin P. Green (Contact Author)

Department of Economics ( email )

Høgskoleringen
Trondheim NO-7491, 7491
Norway

John S. Heywood

University of Wisconsin at Milwaukee ( email )

3210 N. Maryland Avenue, Bolton Hall 802
Bolton Hall 802
Milwaukee, WI 53211
United States
414-229-4437 (Phone)
414-229-3860 (Fax)

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