Business Environment, 1st Edition by Pearson

Chapter 24: Business, Labour and Government | 289 |

workforce. Profi t sharing motivates the individual worker to

put in his best as his efforts are directly related to the profi ts of

the organization, in which he gets a share. Profi t sharing could

be done in many ways, such as

(a) Cash-based sharing of annual profi ts where the annual cash

profi ts of the organization are shared among the employees

(b) Deferred profi t-sharing where the deferred profi ts of the

organization are shared among the employees.

The objective of such profi t-sharing is to encourage the

involvement of employees in the organization, and improve

their motivation and the distribution of wealth among all the

factors of production. Wage fl exibility can improve a fi