Document Type
Article
Publication Date
1-1-1998
Publication Title
Labour
Abstract
Although gain-sharing plans are typically promoted to workers as a way of increasing total compensation, workers are often concerned that gain-sharing bonuses may becvomne substitutes for future wage increases that would have occurred in the absence of the plan. I examine the theoretical and empirical interaction among wages, bonuses, effort, and productivity in firms that implemented IMPROSHARE, a well-known gain-sharing plan. Using longitudinal data obtained from detailed survey questionnaire, I find that one can usually reject both the perfectly competitive model in which effort is held constant (in which case bonuses are a perfect substitute for wages) and the 'pure gravy' model (9n which case bonuses are a perfect substitute for wages) and the 'pure gravy' model ;(in which bonuses completely complement the wage rate). there is no evidence that higher bonuses lead to higher relative wages. The results, however, are not very robust. Although the net effect of the bonuses on the wage rate is usually negative, it is not always statistically significant.
Volume
12
Issue
3
First Page
595
Last Page
600
DOI
10.1111/1467-9914.00081
ISSN
11217081
Rights
© Fondazione Giacomo Brodolini and Blackwell Publishers Ltd 1998,
Recommended Citation
Kaufman, Roger T., "The Effects of Gain Sharing on the Basic Wage: The Case of IMPROSHARE" (1998). Economics: Faculty Publications, Smith College, Northampton, MA.
https://scholarworks.smith.edu/eco_facpubs/31
Comments
Archived as published.