Profit Sharing and the Quality of Relations with the Boss.

Profit sharing generates conflicting changes in the relationship between supervisors andworkers. It may increase cooperation and helping effort. At the same time it can increasedirect monitoring and pressure by the supervisor, and mutual monitoring and peerpressure from other workers that is transmitted through the supervisor. Using data onsatisfaction with the boss, we initially show that workers under profit sharing tend tohave lower satisfaction with their supervisor. Additional estimates show this is largelygenerated by groups of workers who would be least likely to respond to increasedsupervisory pressure with increase effort: women, those with dependents and those withhealth limitations. Despite this finding, profit sharing seems to have little or no influenceon overall job satisfaction as the reduction in satisfaction with the boss is offset withincreased satisfaction with earnings, a finding consistent with profit sharing enhancingproductivity and earnings.