Sharing Profits with Employees: A Good Management Strategy?

[Etini]

For traditional corporate workers, it has always been about climbing corporate ladders. But can we just pause for a second to think. What if we give our employees a larger stake in our businesses? Would it make them more motivated to do their work? There is a new management model called, "Employee Profit Sharing". With this model, employees are not paid fixed salaries. They are paid a certain percentage of the profits that the company makes. It could be 50% but it has to be a percentage that would allow it to be shared substantially among the employees.

The new trend of management a business organisation for efficiency takes the power and places it in the hands of employees and pushes them to keep the company profitable because their pay check is dependent of how profitable the company is.

No fixed salaries. You don't pay for redundancy. You allow the employees determine how much they would take home based on the agreed percentage. A company can decide that every month, 60% of the profits they make would be shared by the employees equally as their pay. I bet you would see employees that are ready to stake every drop of their blood to be efficient for the company.

 

[Ganibade]

Climbing the corporate ladder has long been the goal for typical corporate professionals. But might we just take a moment to reflect? What would happen if we offered our staff a bigger share of our companies? Would it increase their drive to complete their tasks? The "Employee Profit Sharing" management approach is a recent development. Employees under this arrangement do not receive set salaries. They receive payment as a certain percentage of the business's earnings. It must be a percentage that would enable a significant distribution among the staff; it need not be 50%.

The latest developments in management In order to maximize efficiency, a company organization gives employees the power and forces them to maintain the

 

[King bell]

Sharing profit systems can help employees to be more motivated, engaged and satisfied in their jobs. The success of this strategy lies on the ability of linking the efforts of employees with the financial stability of the organization thus creating a sense of ownership and commitment. In turn, such an approach attracts and retains talents, supports team work, aligns interests within the staff cohort group, boosts morale in general, as well as providing people with financial education. This is also helpful for retaining key personnel because they would have little tendency to move elsewhere for better pay offers. Additionally, financially vested workers feel more inclined to give useful thoughts that may improve company’s profitability. All in all sharing profit schemes enhance a positive workplace atmosphere leading to better productivity in general.

 

[moonchild]

Sharing profits with employees can be a good management tactic but you should be cautious to prevent entitlement, employees are employed for a salary, those are the only benefits they have a right to, any addition or supplement is out of the benevolence of the manage so it has to stated clearly.

Personally, I won't advise sharing of profits with employees, because business is risk and if you do not make a profit say in a given month you'll still have to pay salaries, so why will they enjoin you when the going is good and depart when the storms visit?