Monitoring and efficiency wage versus profit sharing in a revolutionary context

Amal Hili ()
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Amal Hili: ISG-Sousse, EPEE-Universit´e d’Evry, Association MASE-ESSAI

No 14-02, Documents de recherche from Centre d'Études des Politiques Économiques (EPEE), Université d'Evry Val d'Essonne

Abstract: We propose to study the trade off between two incentive strategies (moni- toring and efficiency wage versus profit sharing), operated by one firm to induce more efforts among employees. We deal first with a normal context where shirkers bear the risk to be fired. We consider second a particular revolutionary context where employees, even when they go on infinite strikes, would not be dismissed as inspired by the tunisian revolution and more precisely by social movements and general strikes occurring among tunisian workers after revolution. We prove, in the first context, that the profit share to be distributed at equilibrium is pos- itive and depending on the monitoring strategy. In this first context, the two strategies are shown to be strategic complements for low values of risk aversion and strategic substitutes for high ones. We show in the second framework, the emergence of a particular case where the capital holder increases the profit share distributed to employees relative to the one in the first context. This equilibrium profit share is proven to be independent of the monitoring strategy.

Keywords: monitoring; efficiency wage; profit sharing; strikes; risk aversion (search for similar items in EconPapers)
JEL-codes: J41 J52 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2014
New Economics Papers: this item is included in nep-cta and nep-hrm
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