The Relationship between Variable Remuneration, Organizational Strategy, and Firm Performance

Abstract

This study examined the relationship between variable remuneration, organizational strategy, and firm performance. Companies with implemented profit-sharing/gain-sharing programs were chosen as the study's focus, and Porter strategy vision was utilized. Financial and non-financial value drivers measured firm performance. The 79 companies of the sample were medium and large-sized firms, from the industrial sector, and located in the Brazilian state of Sao Paulo. The analysis of the study data indicated a statistically significant relationship between profit-sharing/gain-sharing programs, and value drivers. The performance of the non-financial value drivers is the most favorably influenced by the implementation of profit-sharing/gain-sharing programs, and productivity is the most highly influenced of all the value drivers evaluated in this study. In spite of the fact that the descriptive analysis showed a relationship between profit-sharing/gain-sharing programs, organizational strategy, and value drivers, it was not possible to find statistically significant evidence to confirm the existence of such a relationship.