Profit Share
Arrangement where employees receive portion of company profits.
Formula
Employee Profit Share = (Profit Allocated × Individual Weighting) ÷ Total Workforce Weighting
Real World
John Lewis Partnership distributes a share of annual profits to all its Partners (employees); in strong years this has equated to several weeks' extra pay, directly tying staff motivation to company performance.
Exam Focus
Contrast profit share with other financial motivators (bonus, piece rate) and explain why it specifically aligns long-term interests.
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