Employee productivity and REIT performance

Abstract

The impact of employee productivity on real estate investment trust (REIT) performance is examined. Using a sample of U.S. equity REITs from 2003 to 2017, we first estimate parameters of a firm-level production function correcting for endogenous input choices. The coefficient for labor input is statistically significant, indicating that labor productivity is an important component of overall REIT productivity. More importantly, REIT operating efficiency and financial performance are found to be negatively correlated with previous-year employee instability (a proxy for employee turnover), but positively correlated with several lagged employee productivity measures, suggesting that a stable, motivated workforce improves a REIT's operating efficiency and performance. These findings suggest that employees play an important role in REIT operations and that managing employees properly and creating an effective corporate culture are essential to REIT performance.

Employee productivity spillovers generated by incentive schemes

“…In return, employees may withhold http://www.sajhrm.co.za Open Access their productivity, which ultimately affects organisational performance and shareholder value (Pendleton, 2006). This agency problem can be mitigated by aligning managers' and employees' performance targets with rewards (Bae, 2021;Evans & Tourish, 2017;Feng et al, 2022;Jackson & Morgan, 2011;Kim & Bak, 2020;McConville et al, 2020;Němečková, 2017;Sloof & Van Praag, 2008). Incentiveinduced employee productivity is an integrated system linking business, managers, and employees' performance targets.…”

“…This conflict of interest in trading-off profitability, incentive schemes and managerial stock options affects employee productivity. Therefore, such agency problems can be overcome by implementing performance-based pay (PBP) systems that balance the interests of shareholders, managers, and employees (Arbaugh et al, 2004;Bae, 2021;Evans & Tourish, 2017;Feng et al, 2022;Jackson & Morgan, 2011;Kim & Bak, 2020;McConville et al, 2020;Němečková, 2017;Sloof & Van Praag, 2008).…”

“…Human resource practices (HRPs) such as PBP systems take the form of stock options or profit-sharing schemes to increase employee productivity, yielding future returns for key stakeholders (Antonietti et al, 2017;Jones et al, 2008). Hence, effectively embedded PBP systems focused on incentive-induced employee productivity will capture the desired individual and shareholder returns over longer time periods (Feng et al, 2022). Despite the significance of this relationship, the paucity of research on this topic in South Africa propelled the current study in this direction.…”

Productivity assessment of the real estate industry in China: a DEA-Malmquist index

“…They report that the average TFP is 0.963 during the observation period, and the TFP of central cities is larger than that in other regions in China, which indicates that the main problem to be solved is the real estate inventory in other regions in China. Regarding the contributing factors in real estate productivity, Feng et al (2019) consider that labour is an essential component of overall REIT productivity. They find evidence that a stable and motivated workforce can improve the operating performance of REITs.…”

The effect of job satisfaction and organizational culture on employee performance in autofinance business: the mediating role of organizational commitment

“…This condition makes the performance target higher every year. Performance optimization requires employees' contribution and productivity (Feng et al, 2019;Ogohi et al, 2019;Samnani & Singh, 2014). Idea and creativity are pivotal in developing an innovative business.…”