Profit-sharing schemes and their determinant

Mathieu FLOQUET
ISAM-IAE Nancy – Université de Lorraine - CEREFIGE EA 3942
Loris GUERY
IUT Hubert Curien Epinal – Université de Lorraine - CEREFIGE EA 3942
Chloé GUILLOT-SOULEZ
IAE de Lyon – Université Jean Moulin Lyon 3 - IAE Lyon
Patrice LAROCHE
ESCP Europe - CEREFIGE EA 3942
Anne STEVENOT
ISAM-IAE Nancy – Université de Lorraine - CEREFIGE EA 3942

Abstract

Although there are several studies dealing with the consequences of profit sharing plans, only little empirical works examine factors predicting the profit sharing adoption decision (Gregg, Machin, 1988; Cheadle, 1989; Kruse, 1991; Cahuc, Dormont, 1992). Using a sample of 1,131 French firms, we first identify five profit sharing profiles according to (1) the existence of a profit sharing plan and (2) the importance of the payment. Second, we attempt to examine the internal and external firm characteristics associated with profit sharing plans. The aim of the study is to provide a better understanding of how pay strategy dimensions are related to other dimension of HR strategy (internal fit) and business strategy (external fit) in a contingency and configurational approach. Results from this research can provide useful guidelines on compensation policies for practitioners and HR managers.