Benefits offer no advantage on firm productivity?. An empirical examination
| Date | 01 August 2005 |
| DOI | https://doi.org/10.1108/00483480510599743 |
| Pages | 393-405 |
| Published date | 01 August 2005 |
| Author | Kuen‐Hung Tsai,Jiann‐Chyuan Wang |
| Subject Matter | HR & organizational behaviour |
Benefits offer no advantage on
firm productivity?
An empirical examination
Kuen-Hung Tsai
Department of Business Administration, National Taipei University,
Taipei, Taiwan, and
Jiann-Chyuan Wang
Chung-Hua Institution for Economic Research, Taipei, Taiwan
Abstract
Purpose – To examine the moderating effect of employee benefits on the relationship between labor
input and firm output.
Design/methodology/approach – Three high-tech sectors, covering different time periods, are
taken as the analytical samples. An extended Cobb-Douglas production function is adopted to examine
the research hypotheses.
Findings – Examinations reveal that employee benefits have a moderating effect on firm
productivity, irrespective of industry or firm size. Furthermore, the effect size is greater in small to
medium-sized enterprises (SMEs) than in large firms.
Research limitations/implications – Using benefits to achieve competitive advantage for SMEs
seems to be more important than for large firms. However, this examination concentrates on the
electronics industry only.
Practical implications – Benefits can help a firm achieve competitive advantage through better
quality of labor.
Originality/value – This study makes an interesting contribution to the understanding of the
relationship between benefits and firm productivity.
Keywords Employees, Benefits,Productivity rate
Paper type Research paper
Introduction
Along with the growing costs of employee benefits, the effects of such programs have
received more attention, especially in high-tech firms. Over the last two decades, much
research has explored issues related to effects of employee benefits at individual levels.
On the whole, most studies explored the impact of employee benefits on turnover
intention or satisfaction (e.g. Heneman, 1985; Sutton, 1985; Baber et al., 1992; Buchko,
1992; Hennessey et al., 1992; Gionfriddo and Dhingra, 1999; Miller et al., 2001; Williams
et al., 2002). Few articles or case studies examined the impact of employee benefits on
firm productivity even though many researchers stressed such effects (e.g. Beam and
McFadden, 1988; Evers, 1998; Federico and Goldsmith, 1998; Steere, 2000; Laabs, 2000;
Kurlander and Barton, 2003). As a result, little statistical evidence is available
regarding the contribution of employee benefits to productivity, in particular, at firm
level.
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Benefits on firm
productivity?
393
Received April 2004
Accepted May 2004
Personnel Review
Vol. 34 No. 4, 2005
pp. 393-405
qEmerald Group Publishing Limited
0048-3486
DOI 10.1108/00483480510599743
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