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  2. Has Profit Sharing Led to Fewer Separations?

Has Profit Sharing Led to Fewer Separations?

Työpapereita 187 Kenneth Snellman

Abstract

This study examines the e ect of profit sharing on the employee turnover in firms. The existence of a profit sharing programme (or performance related pay) in a firm is in general associated with a reduction in the probability of separation for salaried employees by 1-2 percentage points for the average employee. It is doubtful whether there is a reduction in the turnover for wage earners. The esti-mates indicate that more firm-specific human capital relative to general human capital is associated with a lower probability of separation.

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