Profit-maximizing firms have strong incentives to retain their most-talented employees that make meaningful contributions to profit through high productivity and/or ingenuity. This study attempts to find a method firms can use to accomplish this by examining the relationship between broad-based stock option and other employee-ownership plans and the rate of voluntary employee turnover. We use industry level data on ten large industries from three post-industrial countries (the United States, the United Kingdom, and New Zealand) to empirically examine this relationship. A polynomial specification will be used to align with the theoretical nature of the relationship, but it will be compared with a standard linear model as a robustness check. We applied regression models with and without employer benefit spending variable, however, we do not find statistically significant evidence for the relationship in any model, suggesting the need for additional study and data information.
Myers, Zach, "An Investigation of the Impact of Broad-Based Stock Option Incentive Plans on the Rate of Voluntary Employee Turnover" (2021). Senior Independent Study Theses. Paper 9498.
Behavioral Economics | Benefits and Compensation | Business Administration, Management, and Operations | Econometrics | Economic Theory | Labor Economics | Training and Development
broad-based, stock options, employee ownership, employee incentives, labor market, game theory, employee utility, profit-maximization, loss aversion
Bachelor of Arts
Senior Independent Study Thesis
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