The Use Of Stock Options And Retirement Plans To Retain Non-Executive Employees

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Increased employee tenure is beneficial for firms for many reasons. It can improve returns on training costs and reduce monitoring costs by emphasizing long-term performance. In addition, repetition over time increases worker accuracy or proficiency, and efficiency is higher for teams that have worked together longer Orazem, Bouillon and Doran (2004) find a positive association between return on assets and employee tenure, and suggest that firm investments in firm-specific training, pension or benefit policies, deferred pay policies and human resources practices should be associated with higher firm value.