Profit-Sharing is a policy run by some companies to offer employees a share of the company’s profit. This compensation is in addition to employees’ regular salaries, bonuses and benefits. Usually, the company contributes a portion of their annual profits into a pool which will be distributed later among the employees. This Share will show its value especially after employees’ retirement.
However, comfortable retirement is not the only positive result. Predicting a profit-sharing plan motivates and activated all dramatically. Generally, when employees expect the same regular income, regardless of their entire efforts and successes, they will not perform above the minimum expectations. When they have rewarded a part of the company’s profit, they constantly try to come up with innovations and new ideas which benefits the organization in the long-run.