Profit sharing in practice: its prevalence and influence on job satisfaction controlling for workplace amenities

This paper explores the relationship between profit sharing and employee engagement using new data from a large-scale PayScale survey from 2020 to 2023. First, I document new em- pirical patterns: although profit sharing respondents are only 4% of the sample, it is more prevalent in technical and managerial occupations, industries like manufacturing and con- struction, and higher income workers. Second, using variation within the same occupation and industry, controlling for a wide array of demographics and workplace amenities, I find that profit sharing is associated with increases in job satisfaction and declines in turnover. Incentive effects account for 16% of the overall impact. These results underscore the signifi- cance of non-pecuniary benefits in shaping corporate culture and employee retention.