The relationship between profit-sharing/gain-sharing plans, productivity and economic value added

Journal of the Academy of Business and Economics, Jan, 2004 by Elizabeth Krauter, Leonardo Fernando Cruz Basso, Herbert Kimura

The investment in working capital didn't have influence for 70.3% and it increased for 24.2% of the respondents. The investment in fixed capital didn't have influence in 79.1% and it increased in 17.6% of the participant companies of the research.

The operating profit margin increased for 50.5%, didn't have influence for 34.1% and decreased to 15.4% of the companies. The income tax rate, the cost of equity and cost of debt didn't have influence for 85.7%, 83.5% and 79.1% of the companies, respectively.

The median of the financial drivers was 3, except for to operating profit margin that it was 2. Therefore, this driver had an increase (improvement) moderate with the deployment of the participation plans, and the other drivers didn't suffer significant influence.

The non-financial drivers were: productivity, customer satisfaction, quality of the product or service, training of employee, satisfaction of employee, product innovation, process innovation, market share, safety of employee.

For 83.5% of the respondents, the productivity increased with the deployment of the participation plan. The customer satisfaction improved for 62.6% and didn't have influence for 31.9%. The quality of the product or service improved for 70.3% of the respondents and didn't have influence for 25.3%.

The training of employee had an improvement for 58.2% and it didn't suffer significant influence for 38.5% of the companies.

For 82.4% the satisfaction of employee increased with the deployment of the plans. The product innovation didn't have influence for 64.8% and had an increase for 35.2% of the respondents.

The process innovation had an increase for 57.1% and it didn't suffer influence for 38.5%. The market share didn't suffer influence for 59.3% of the companies and it increased for 36.3%.

Satisfaction of employee increased for 57.1% and it didn't suffer influence for 41.8% of the respondents.

Product innovation and market share had median 3, what means that those drivers didn't suffer influence with the deployment of the participation plans. The median of the other non-financial drivers was 2, what indicates that they suffered an increase moderate with the deployment of the plans.

The productivity was the driver that suffered the largest favorable influence with the deployment of the participation plans. The other drivers more favorably influenced were: satisfaction of employee, quality of the product or service and customer's satisfaction.

The statistical test Chi-Square was used to identify whether observed values differ significantly from expected values, so that the null hypothesis could be rejected.

The results point that the null hypothesis can be rejected at the level of 1%. Therefore, the deployment of the profitsharing and gainsharing plans had a favorable influence on the value drivers. The non-financial drivers were more favorably influenced that the financial drivers.

19 assertions were presented in block II and the respondent indicated the degree of their agreement or disagreement, according to the Likert scale of 5 points: 1--I fully agree; 2--I agree to some extent; 3--Indifferent;--I disagree to some extent; 5--I disagree a lot. The objectives were to verify the characteristics of the plans used by the companies (1 to 9) and to verify the respondents' perception as for the creation of value and at the capital cost (10 to 19).