Abstract
This research paper explores how employees of a multinational glass manufacturing company see the pay offered by the company and how it affects, directly or indirectly, their efforts to perform their duties. For this purpose, a case study was carried out in a glass manufacturing company located in the southernern region of Brazil throughout 2017. Literature review is focused on the theoretical model based on the idea that there is a positive variation of efforts with the company supervision intensity was tested, and it pointed out that the moral hazard of being caught shirking is related to supervision. Using the Ordinary Least Square (OLS) method, the relationship between wages and supervision intensity was empirically tested, according to the model suggested by Shapiro and Stiglitz (1984), in which there is a trade-off between supervision and actual wage. The results corroborate the efficiency wage theory: 90% of the sample consider extra benefits, besides the wages, important and only 2.02% consider the wage of the greatest motivator for continuing in the company. The analyses carried out in the research present striking data regarding the employees’ perception of the benefits offered. That way, the loss of these benefits may affect the collaborators’ efforts. Therefore, the company must concentrate on incentive strategies towards the benefits. Key words: Managerial accounting, shirking model, ordinary least squares.
Highlights
Efficiency wage is the idea that by paying wages above the market clearing wage, to the employees, who are considered stakeholders in the company, it is possible to obtain better effort from them and, as a result, higher economic performance when analyzing the Balance Scorecard indicators or carrying out the internal Benchmarking
The descriptive analysis points the variability of the sample which validates the results presented in the Ordinary Least Square (OLS) regression model (Tables 1 and 2)
The efficiency wage theory suggests that the companies have better economic results when they pay their employees wages or benefits higher than those determined by the market
Summary
Efficiency wage is the idea that by paying wages above the market clearing wage, to the employees, who are considered stakeholders in the company, it is possible to obtain better effort from them and, as a result, higher economic performance when analyzing the Balance Scorecard indicators or carrying out the internal Benchmarking. If the workers are paid higher wages, the cost of losing the job becomes burdensome and that works as a benefit so that they do not wriggle out of doing their best in their duties and consider the possibility of being fired. The aim of this paper is to design the efficiency wage empirical submodel by designing wage equations (Chengli and Yan, 2013) of automotive glass sector.
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