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The relationship between bonuses and firm performance

Reizer, Balázs (2025) The relationship between bonuses and firm performance. FINANCE RESEARCH LETTERS, 86 (Part C). No.-108514. ISSN 1544-6123

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Abstract

I investigate the relationship between bonus payments and firm performance using a large-scale Hungarian linked employer-employee database. I found that firms with a 10% higher share of workers with bonuses have a 3.9%–4.6% higher value added per worker and 3 percent higher total factor productivity. This relationship is linear in the share of workers receiving bonuses, suggesting that bonuses are more effective when more workers receive them within a firm. At the same time, the relationship between firm performance and bonus payments is independent of labour share and firm size, although it is stronger in the service sector.

Item Type: Article
Uncontrolled Keywords: Risk Management, Wage Structure, Personnel Economics
Subjects: H Social Sciences / társadalomtudományok > HB Economic Theory / közgazdaságtudomány
SWORD Depositor: MTMT SWORD
Depositing User: MTMT SWORD
Date Deposited: 15 Nov 2025 07:03
Last Modified: 15 Nov 2025 07:03
URI: https://real.mtak.hu/id/eprint/228879

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