Profit-sharing as an incentive

Kym Hambly, Rinu Vimal Kumar, Mark Harcourt, Helen Lam, Geoffrey Wood

Research output: Contribution to journalArticleResearchpeer-review

1 Citation (Scopus)

Abstract

Although profit-sharing is mostly associated with an economics perspective, its utilization as an employee incentive involves a psychological dimension, embedded in a broader socio-economic framework and reflected in organizational practices and management characteristics. The authors identify a list of conditions for profit-sharing’s effectiveness as an incentive scheme, informed by three theories, expectancy theory, reinforcement theory and goal-setting theory, and supported by substantial evidence from the literature on profit-sharing. Thus, this paper provides critical information for profit-sharing’s design and implementation, as well as offers some new practical insights into the contingencies and limitations of this incentive plan. Overall, it contributes to both theory and practice, integrating the three motivational frameworks regarding profit-sharing, and seeking to understand the insights such approaches afford to a socio-economic understanding.

Original languageEnglish
Pages (from-to)2855-2875
Number of pages21
JournalThe International Journal of Human Resource Management
Volume30
Issue number20
DOIs
Publication statusPublished - 2019
Externally publishedYes

Keywords

  • collective pay
  • expectancy theory
  • financial participation
  • goal-setting theory
  • incentives
  • Profit-sharing
  • reinforcement theory
  • strategic compensation
  • variable pay

Cite this

Hambly, K., Kumar, R. V., Harcourt, M., Lam, H., & Wood, G. (2019). Profit-sharing as an incentive. The International Journal of Human Resource Management, 30(20), 2855-2875. https://doi.org/10.1080/09585192.2017.1334149