Profit Sharing

A compensation scheme in which employees receive a defined portion of the business's profit.

Profit sharing links pay to the outcome employees jointly influence rather than to individual output, and it doubles as a retention tool because the payout usually requires still being there.

Often confused with

Commission: Profit sharing pays out of the business's profit and depends on costs as well as sales; commission pays out of an individual's sales alone.

Taught in

4.1 Management and Leadership

Profit Sharing

Often confused with

Taught in

See also