African Journal of
Business Management

  • Abbreviation: Afr. J. Bus. Manage.
  • Language: English
  • ISSN: 1993-8233
  • DOI: 10.5897/AJBM
  • Start Year: 2007
  • Published Articles: 4125

Full Length Research Paper

Efficiency wage and work effort: Case study of a Brazilian multinational company

Marina Fritoli
  • Marina Fritoli
  • Faculdade de Economia, Administração e Contabilidade de Ribeirão Preto da Universidade de São Paulo (FEA-RP/USP), Brazil.
  • Google Scholar
Nathália Laffin
  • Nathália Laffin
  • Faculdade de Economia, Administração e Contabilidade de Ribeirão Preto da Universidade de São Paulo (FEA-RP/USP), Brazil.
  • Google Scholar
Carlos Alberto Bonacim
  • Carlos Alberto Bonacim
  • Faculdade de Economia, Administração e Contabilidade de Ribeirão Preto da Universidade de São Paulo (FEA-RP/USP), Brazil.
  • Google Scholar
Luiz Eduardo Gaio
  • Luiz Eduardo Gaio
  • UNICAMP Universidade Estadual de Campinas, São Paulo, Brazil.
  • Google Scholar
Rafael Gatsios
  • Rafael Gatsios
  • Faculdade de Economia, Administração e Contabilidade de Ribeirão Preto da Universidade de São Paulo (FEA-RP/USP), Brazil.
  • Google Scholar


  •  Received: 07 August 2020
  •  Accepted: 22 October 2020
  •  Published: 31 January 2021

Abstract

This research paper explores how employees of a multinational glass manufacturing company see the pay offered by the company and how it affects, directly or indirectly, their efforts to perform their duties. For this purpose, a case study was carried out in a glass manufacturing company located in the southernern region of Brazil throughout 2017. Literature review is focused on the theoretical model based on the idea that there is a positive variation of efforts with the company supervision intensity was tested, and it pointed out that the moral hazard of being caught shirking is related to supervision. Using the Ordinary Least Square (OLS) method, the relationship between wages and supervision intensity was empirically tested, according to the model suggested by Shapiro and Stiglitz (1984), in which there is a trade-off between supervision and actual wage. The results corroborate the efficiency wage theory: 90% of the sample consider extra benefits, besides the wages, important and only 2.02% consider the wage of the greatest motivator for continuing in the company.  The analyses carried out in the research present striking data regarding the employees’ perception of the benefits offered.  That way, the loss of these benefits may affect the collaborators’ efforts.  Therefore, the company must concentrate on incentive strategies towards the benefits.

 

Key words: Managerial accounting, shirking model, ordinary least squares.