What is Profit Sharing in HRM?

Learn Profit Sharing definition in hrm with explanation to study “What is Profit Sharing”. Study profit sharing explanation with HRM terms to review HRM course for online MBA programs.

Profit Sharing Definition

  • System to distribute a portion of the profits of an organization to employees.

    Human Resource Management by Robert L. Mathis, John H. Jackson



Profit Sharing Explanation

Profit sharing alludes to different motivator plans presented by organizations that give immediate or aberrant installments to workers that rely upon organization's gainfulness notwithstanding representatives' standard pay and rewards. In traded on an open market organizations these plans commonly sum to allotment of offers to workers. Benefit sharing, when disseminated as a level of yearly pay a typical practice brings about less cash shared among representatives holding lower paying occupations and higher sums imparted to exceptionally repaid workers. Benefit sharing installments are for the most part made just if the organization has been gainful for the time frame indicated, or when a work contract with a worker's guild requires it, or when a senior representative requires the remuneration. For individuals without contracts, the organization can change the particulars of the arrangement voluntarily.

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