Saturday, August 24, 2024

Profit Sharing

An employer who expects every employee, no matter their hours, pay, or life circumstances, to be as psychologically invested in the business as they are is utterly irrational.  Not only do workers, like all people, have lives that transcend work (though some employers and employees try as hard as they can to trivialize everything beyond the workplace!), and not only are they very likely not being compensated well enough to justify anything near such efforts, but they are simply not the owners or executives.  They objectively have no reason whatsoever to care in a typical situation.

If the company does well, unless they are directly receiving bonuses in addition to an unflinchingly livable base compensation, nothing changes for employees--except maybe that they have higher expectations placed on them for the exact same amount of pay.  In the ordinary workplaces of America at this time, one could pour an abundance of time and energy into work output and be greeted with, if anything, little to nothing but verbal or written congratulations.  Again, such employees have no reason to care or lift a finger above the bare minimum if this is all there is to their recognition.

Profit sharing provides an incentive that directly, justly rewards workers in proportion to how much their companies succeed while pragmatically encouraging productivity.  An employee's core compensation remains untouched and thus intact either way.  However, if they contribute to higher profits for their organization, they will also be given a fixed portion of that profit like all other workers or could even be given an amount that reflects their specific proportion of the contributions.  This would revolutionize employee morale and the financial security of general people if it was implemented all throughout the country.

Without profit sharing or incredibly high compensation apart from it, there is literally no reason to come close to taking a job any more seriously than whatever is enough to just keep the job.  Enriching an employer just to enrich an employer is a meaningless thing on its own.  It neither has any moral duty (on the Christian worldview) nor any personal reason for motivation beyond mere subjective preference.  The same is true of engaging in high levels of professional productivity for the supposed sake of productivity.

Profit sharing addresses all of these issues and corrects all of these objective deficiencies in many business models (not that it will automatically inspire subjective excitement or dedication in employees, but it is much more likely than its absence to do this).  Demanding or simply expecting incredible devotion and productivity apart from incredible compensation, one way or another, is exploitative.  Even moreso if it is proportionate to individual accomplishments, distributing a portion of the actual company profits among all who are responsible grants them livable compensation plus a surplus, legitimately rewards their work, and offers personal incentives for professional excellence.

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