Using profit sharing to enhance employee attitudes: a longitudinal examination of the effects on trust and commitment

The ability of profit sharing to increase organizational performance via positive changes in employee attitudes has yielded mixed results. Drawing on principal agent, expectancy and organizational justice theories, this paper assesses how perceptions of profit sharing (capacity for individual contribution and organizational reciprocity) alter organizational commitment and trust in management using longitudinal data provided by 141 engineering employees. Favorable perceptions of profit sharing served to increase organizational commitment while only organizational reciprocity predicted trust in management. The relationship between organizational reciprocity and commitment was partially mediated by trust in management. Implications for the design of profit sharing initiatives are noted.