40
PROFIT-SHARING SCHEMES
What is this practice and how effective is it?
Many organizations use profit sharing to provide a fairer approach to recognizing and rewarding managers and employees. But most programs fail to survive a bad year in which profits fall and employees receive little or no bonus. This “entitlement creep” problem—bonuses are soon built into an individual’s expectations—suddenly becomes a crisis, and the scheme is abandoned. We will examine how a few smart organizations have found ways around these problems.
Alternative names and related topics: gainsharing; fair compensation; team-based rewards
Most social scientists criticize financial incentives when they are applied to individuals but are less concerned about teams. Indeed, ...
Get Beyond Performance Management now with the O’Reilly learning platform.
O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.
