Relationships between Economic Compensation and Corporate Performance for Employees of Logistics Company

Abstract

Purpose : This study examined how the economic compensation to employees affects the corporate performance of logistics companies. Research design, data and methodology : Multiple regression analysis and T-test were conducted for empirical verification. Variables of economic compensation were labor costs, retirement allowance, welfare benefits, employee growth rates, wage gaps between executives and employees, and average years of service. Profitability, stability, and growth indicators were used as the corporate performance variables. Results : The rate of increase in labor costs of logistics companies had a positive effect on their profitability and stability. In particular, the increase in welfare-related expenditure had a positive effect on sales and net profit. The increase in net income had a positive effect on the increase in the average service period of employees. Selling and administrative expenses and economic compensation variables showed positively significant results. In addition, the difference in the level of economic compensation according to the size of the company did not show a clear difference in the growth rate of retirement benefits and welfare expenses. However, large companies tended to show higher employment growth, the wage gap between executive employees, and the average service period. Conclusions : Logistics companies should improve job satisfaction and logistics services, secure a professional workforce, reduce safety accidents, increase productivity through profit sharing with employees, and ultimately improve management performance.