Arbeitspapier
The hidden cost of profit sharing on participation in employee stock purchase plans
Many firms use equity-based profit sharing to boost participation in employee stock purchase plans (ESPPs). Using a large panel data set (N=262,824) of a multinational firm, we compare the reactions of former ESPP participants and non-participants to a profit sharing distribution (PSD). We find a dysfunctional effect. Although many former non-participants sign in, almost a similar share of employees leave the ESPP after the PSD. A closer look highlights the importance of social preferences when all employees enjoy profit sharing. Prosocial former participants show a motivational crowding out effect and leave the program, as the equity norm is violated.
- Language
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Englisch
- Bibliographic citation
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Series: cege Discussion Papers ; No. 414
- Classification
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Wirtschaft
Human Capital; Skills; Occupational Choice; Labor Productivity
Compensation Packages; Payment Methods
Producer Cooperatives; Labor Managed Firms; Employee Ownership
Personnel Economics: Compensation and Compensation Methods and Their Effects
- Subject
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Employee Stock Purchase Plans
Gift Exchange
Motivational Crowding Out
NormViolation
- Event
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Geistige Schöpfung
- (who)
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Hennig, Jan Christoph
Hullmann, Rieke
Rau, Holger A.
Wolff, Michael
- Event
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Veröffentlichung
- (who)
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University of Göttingen, Center for European, Governance and Economic Development Research (cege)
- (where)
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Göttingen
- (when)
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2021
- Handle
- Last update
-
10.03.2025, 11:41 AM CET
Data provider
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ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Hennig, Jan Christoph
- Hullmann, Rieke
- Rau, Holger A.
- Wolff, Michael
- University of Göttingen, Center for European, Governance and Economic Development Research (cege)
Time of origin
- 2021
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