Profit Sharing Essay

879 words - 4 pages

Introduction:
Human assets are most productive of all assets in all organization and if these assets have to be developed and made productive, incentives should be offered. Though there are many kinds of incentives that can be offered ,it was found that profit sharing resulted in the greatest yield to the human assets .Employees knew that if they became productive they would earn a bonus and this would help hem recognize their productive levels .
Building of human assets through profit sharing:
Retirement savings plans and profit sharing were considered to be the most important human asset building activity and though revolutionary in nature with a little foresight and great ...view middle of the document...

This was a direct way of building the human base in the organization. A strongly motivated labor force with profit sharing incentives would definitely make the organization earn well. It was in the interest of the employees. Profit sharing has earned corporate great value in terms of human assets and as very rightly said “and when the bonus comes, they know they've earned it. They know they're getting the reward because they took responsibility, because they increased the economic value of the company and strengthened the community. It's not a gift, and it's not an entitlement. It's payment for a job well done” (Jack Stack, President and CEO of SRC Holdings Corp.)
Human assets are built when employers share profits with their employees to show pride of ownership and it is also seen that these firms who have been sharing profits with employees have turned out marginally good productivity and lower turnover in labor even in times of great economic recession and downturns. It is always seen that when employees are invited to share profits they become more productive.
Profit sharing is not a short term incentive like wage hikes .These incentive are long term because employees who identify themselves with the firm for a good period of time are rewarded for their loyalty by profit sharing incentives. Employees have to associate themselves to long term commitment so that their efforts are transferred to corporate profits which are transferred back to them in the form of profits. This is long term association of employees with their employers where employees get to accrue their retirement benefits and if employees have to get their...

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