ScholarWorks@중앙대학교

초록

Since a firm aims to pursue profit by increasing productivity, it will hire employees to find the most efficient way to determine employee compensation such as wages and performance bonuses. In addition, companies decide inputs in consideration of productivity and as a result, they seek to maximize output. It is necessary to focus on the fact that all productivity will be considered in corporate decisionmaking, total factor productivity will also be fully considered by management and may also be considered for employee compensation. This study studied the relationship between total factor productivity and employee compensation using firm-year panel data comprised of domestic listed companies from 2007 to 2018. Total factor productivity was measured using Levinsohn and Petrin’s (2003) measurement method and employee compensation was measured as cash compensation per employee. As an empirical analysis method, the pooled-OLS and fixed-effects models were compared and the effect of each size was examined by dividing the firm size into large firm, medium-sized firm and small-sized firm. As a result of the study, total factor productivity has a positive(+) effect on employee compensation. In other words, the results of the study have been drawn that employees can receive higher rewards when firms increase production efficiency by improving total factor productivity. Prior to the analysis by firm size, trends in total factor productivity and employee compensation were confirmed through annual averages. In both variables, medium-sized firms tended to narrow the gap with large firms, and after 2013, it was more evident in employee compensation. Also, as a result of pooled-OLS analysis, total factor productivity had a positive (+) effect on employee compensation in all companies, and as a result of fixed effect model analysis, total factor productivity showed a positive relationship on employee compensation in all companies except large firms. This paper can suggest that there is a need to consider TFP in employee compensation for small and medium-sized firms as well as large firms with relatively systematic employee compensation processes. Combining the results of previous studies and this study, an increase in total factor productivity leads to employee compensation, and an increase in employee compensation leads to an increase in total factor productivity. This study has the following implications. First, it is suggested that total factor productivity can be used in determining employee compensation. In other words, at the firm level, when managers seek to increase firm’s profits through maximum output, total factor productivity is considered as an index, and the possibility of using employee compensation to make decisions is suggested. Second, financial data and employment-related variables that can consider both sides of the labor and management position were used in the formation of employee compensation and were analyzed more precisely. The position of employees such as employment stability was controlled through the employment type and length of service of the employee, and the position of the company was controlled by considering the current status of the firm that can be grasped using financial data. Third, the degree of interest in total factor productivity for employee compensation of medium-sized firms and small-sized firms was presented as an analysis by firm size.

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