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 ?
The statement from the union reveals that UAL CEO Glenn Tilton's Success Sharing award for 2004 was USD366,393, some 262 times the average award granted to AMFA members.
To possibly compensate for this, the provision for annual Success Sharing payments was revised to provide that a portion - 0.
Drawn by discussions of Creating Profit with Cutting-Edge Sales Technology, Driving Growth through Marketing Excellence and Best Practices Benchmarking, Global Benchmarking Council members and guests will gather in Dallas, TX to trade insights and implementation solutions through detailed presentations, success sharing, management roundtables, knowledge exchanges and informal conversations.
Joseph Vacca, Senior Vice President of the Early Success Sharing Partnerships (ESSP) business unit of WuXi PharmaTech (Cayman) Inc.
I have to thank all of the great people who have been a part of Technomedia's success sharing our client-focused vision.