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I think that annual bonus is most liked by employees .
As it is stable .
Management look from business point of view in which they see the performance of all employees as on entity.
I believe profit sharing is one of (if not most) important way to develop employees' loyalty. When employees feel that they are part of the company's success (not only in the efforts but also in the profits) they will be more involved and will care.
Annual bonus is usually based on individual performance, but profit sharing is based on team's/ whole company's performance. Therefore every employee will not only be watching his own but also other's performance.
Bonus is an additional payment purely at the discretion of the management unless and otherwise a statutory stipulation in this regard by the Government. But in many companies this is incentive package linked to sales and profit. It is generally expressed in terms of number of days in a year calculated on the basis of Basic salary/Gross salary as the case may be. Usually on incremental basis year over year. I believe this is a good practice better than sharing arrangement, as the employees cannot digest a discounted return by way of bonus, even though it is not a right for them. Because the expectations should not diminish for small earners as it will upset their morale boost. Opinions may differ, but I believe this is good for them.
There is no special law with the enoughs annual fixed but is due to several reasons, including the size and value of the annual profits are distributed in proportions varying staff as administrative center according to the specialization of each employee and is not imposed on companies is encouraging and an incentive to exert maximum effort and provide the highest bid
In my point of view , profit sharing is rarely practised and in many cases that is a try
management for salvaging a company with financial difficulties.
Annual bonus is safe an fair, it's up to you as a Manager how to fix it to be fair, logical and guarantee the self and the hole group motivations.
Management point of view always focus on which one motivates employees to work harder?
Profit sharing arrangement
Thank you for addressing your question to me. As per my experience, for the role where contribution is directly measurable Profit Sharing model may be chosen. Roles on projects annual bonus may be offered.
I prefer the profit sharing for two reasons:
Moreover, I prefer to do it quarterly, not annually.
From management viewpoint, this decision will be based on the preference of the employee and what makes him/her really tick and deliver their best, noting that such choice is given to key employees only with which the whole business will tick and deliver its best
I don't know.
