Profit sharing in the private sector enterprises

Abstract

The study is about reasons and conditions for using profit sharing in Finnish private sector enterprises. The objective is to find out the needs profit sharing is related to and the characteristics of the companies that are in positive or negative interaction with remuneration systems. The study also investigates the role of the personnel in introduction of the profit sharing system and the way different kinds of procedures affect to the functioning of the profit sharing.

The use of profit sharing became common in the 1990´s coincide with fundimental changes in work life and in foundations for operations of enterprises. The central focus in the study is weather the introduction of profit sharing is connected to the wider strategic, functional and structural changes in enterprises, or weather it´s the matter of two coincide but unrelated phenomena. The hypothesis is that the modernization process of enterprises and the changes in the environment have led to arise of conditions where profit sharing for reason or the other is found essential. Attention is also directed towards factors reflecting the atmosphere of organization and established modes of action.

Empirical observations are made from the basis of two separate survey data. The main data is gathered year 1998 by the study group of local bargaining in the University of Turku. The survey was directed to the employee and employer representatives in private sector enterprises. The other data was gathered year 1999 by Finnish Confederation of Salaried Employees STTK from the shopstewards of the member trade unions.

The results indicate that the introduction of profit sharing connects to the wider innovations, witch refer to the increase of functional flexibility in the use of labour force and in the production process. In the case of individual characteristics, the high amount of salaried employees, the large size of the enterprise, team working, high level of local bargaining and well functioning relationship between the management and the staff covert by trust are examples of the factors witch promote the use of profit sharing. The results also indicate that the more profoundly the personnel is involved to the designing and introduction of the remuneration system, the more likely the aims of the system are achieved and the more likely the attitude of the personnel towards profit sharing is positive.

• ISSN: 1236-7176
• ISBN: 952-5071-56-1
• Press Release in Finnish
• Publication in PDF-format