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Journal of Competitiveness

Profit-Sharing – A Tool for Improving Productivity, Profitability and Competitiveness of Firms?

Fibírová Jana, Petera Petr

Keywords:
rewards for performance, group rewards, profit-sharing

Abstract
The importance of appropriate utilization of rewards for performance is still growing and therefore this type of rewards can be seen as a significant part of a total rewards package. Companies that are able to appropriately implement rewards for performance may gain competitive advantage over their competitors, but successful implementation requires a good knowledge of these rewards. The main aim of this paper is to contribute to the growth of this knowledge by identifying possible positive and negative impacts of profit-sharing on various areas that are important for the performance of a company, nevertheless, addressed are also macroeconomic consequences of profit-sharing. Furthermore, a comprehensive and up-to-date review of the relevant literature is provided, under-researched areas are identified and suggestions for further research are given. To accomplish these goals, we applied methods of bibliometric analysis to the articles indexed in ISI Web of Knowledge to identify the most important articles, authors and topics. According to our findings, the majority of studies report a neutral or positive impact of profit-sharing on productivity and profitability. This impact may be achieved by direct influence of profit-sharing on productivity of employees (due to the dependence of their pay on profit), but it seems that yet more important are various mediating mechanisms, especially effects on employment stability, absenteeism, quits and related issues, as well as effects on attitudes of employees and on relationships between employees. We argue that a well-designed profit-sharing plan is crucial for its success, but it is a relatively under-researched problem.

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10.7441/joc.2013.04.01


Fibírová J., Petera P. (2013). Profit-Sharing – A Tool for Improving Productivity, Profitability and Competitiveness of Firms?. Journal of Competitiveness, 5 (4), 3-25 http://doi.org/10.7441/joc.2013.04.01 
Journal of Competitiveness

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ISSN 1804-171X (Print)
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