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Organizational Plans

Profit sharing and gain sharing are the major types of organizarionw.dc plans is simply distributing a percentage of corporate profits across the workforce. In “I’? United States, at least one-third of all organizations have profit sharing. Japan. companies give profit-based bonuses twice a year to all employees. Such bonuses may go from as high as 50 percent of salaries in good years, to nothing in bad years. Gain sharing also involves giving organization wide bonuses, but differs from profit sharing in two important respects: First, it typically measures controllable costs or units of output, not profits, in calculating a bonus. Second, gain sharing is always combined with a participative approach to management.