profit sharing

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profit sharing,

arrangement by which employees receive, in addition to their wages, a share of the net profits of a business. The purpose is to give them an incentive to increase their output through enhanced morale, less wasteful use of materials, better care of equipment, and the like. Profit sharing does not imply participation by the workers in management. The employer determines the rate at which profits are shared; since the rate is fixed beforehand, profit sharing differs from the bonusbonus,
extra amount in money, bonds, or goods over what is normally due. The term is applied especially to payments to employees either for production in excess of the normal (wage incentive) or as a share of surplus profits.
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 system. Profit sharing plans have been in operation in France since 1842 but have not been widely adopted in the United States. The plan has been most successful in businesses where employees work without direct supervision or where it is limited to supervisory employees or lesser executives, e.g., branch managers and department managers in department stores.

profit sharing

[′präf·ət ‚sher·iŋ]
(industrial engineering)
Sharing of company profits with the employees.
References in periodicals archive ?
Cash awards are paid in the first quarter following the Success Sharing Plan year.
Drawn by discussions of Technology-Enabled Productivity and Growth, Performance-Based Compensation and Best Practices Benchmarking, Global Benchmarking Council members and guests will gather in Atlanta to trade insights and implementation solutions through detailed presentations, success sharing, management roundtables, knowledge exchanges and informal conversations.
Drawn by discussions of Technology-Enabled Productivity and Growth, Performance-Based Compensation and Best Practices Benchmarking, Global Benchmarking Council members and guests will gather in Atlanta, GA to trade insights and implementation solutions through detailed presentations, success sharing, management roundtables, knowledge exchanges and informal conversations.
At the Austin meeting, members and guests will trade insights and implementation solutions through detailed presentations, success sharing, management roundtables and knowledge exchanges.