PROFIT SHARING Meaning and
Definition
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Profit sharing refers to a compensation program in which employees receive a portion of the profits earned by a company. Under this arrangement, a company allocates a percentage of its profits to be distributed among employees, usually on an annual basis. The distribution of profit sharing can be based on various factors, such as individual performance, job level, or a predetermined formula.
Profit sharing serves as an incentive for employees to contribute to the success of the company and motivates them to work towards maximizing profitability. It is often used as a means to reward and acknowledge the efforts and achievements of employees. By providing a direct financial stake in the company's performance, profit sharing can enhance employee engagement, commitment, and productivity.
The distribution of profits can take different forms, including cash bonuses, stock options, or contributions to retirement savings plans. This flexibility allows companies to tailor their profit sharing programs to align with their specific objectives and financial circumstances.
Profit sharing can have several benefits for both employees and employers. For employees, it offers the potential for increased income beyond regular salaries or wages and provides a sense of ownership and shared success. For employers, profit sharing can help attract and retain talented employees, boost morale, and foster a culture of collaboration and mutual success.
However, it is important to note that profit sharing is not guaranteed income, as it is contingent upon the company's performance and profitability. Therefore, the amount distributed to employees may vary from year to year.
Common Misspellings for PROFIT SHARING
- orofit sharing
- lrofit sharing
- -rofit sharing
- 0rofit sharing
- peofit sharing
- pdofit sharing
- pfofit sharing
- ptofit sharing
- p5ofit sharing
- p4ofit sharing
- prifit sharing
- prkfit sharing
- prlfit sharing
- prpfit sharing
- pr0fit sharing
- pr9fit sharing
- prodit sharing
- procit sharing
- provit sharing
Etymology of PROFIT SHARING
The word "profit sharing" is composed of two main components: "profit" and "sharing". The etymology of each of these parts is as follows:
1. "Profit":
The word "profit" comes from the Old French word "profit" or directly from the Latin word "proficere", which means "to advance" or "to make progress". In Latin, "pro" means "forward" or "in favor of", and "facere" means "to make" or "to do". Over time, "profit" gradually took on the financial sense of "monetary gain" or "benefit obtained".
2. "Sharing":
The word "sharing" originated from the Old English word "scearu", which means "a portion" or "a division". It has its roots in the Proto-Germanic word "*skera-" which indicates "to cut".
Similar spelling words for PROFIT SHARING
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