Abstract
This study surveyed 152 publicly traded companies to investigate group-performance based pay practices and its impacts on labor productivity. Compared a benchmark survey from Department of Labor, those companies show higher introduction rates, especially in small-to-medium sized companies. They also tend to pay profit-sharing bonus more in the form of company stocks and differentiate individual bonuses more by department performance than individual performance. The impact of group-performance based pay on labor productivity is positive and statistically significant. Economic value added per person in those companies adopting group-performance based pay tends to be higher and increases with the coverage of employees under the pay plan. It also reveals that the years after the play adoption are negatively associated with labor productivity.
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