This research project discusses profit sharing -- a flexible compensation plan which is claimed to be able to achieve organisational objectives whilefulfilling employee needs.
The project describes the nature and the objects of profit sharing, factors that argue for and against it, essential considerations for the success of a profit sharing plan, and the results of past experience as revealed by case studies on the subject.
From this study, it is found that monetary rewards are effective in influencing employee motivation and hence organisational performance. Profit sharing plans can be an effective means of maximizing the contribution of employees on their firm’s profitability.
Explicit in this study is that a system which integrates employee participation in decisions with a system of rewards linked to improved organisational performance appears to be the desirable mix of strategies.