Profit sharing

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Profit sharing is a form of incentive compensation whereby some of a firm's earnings are distributed to employees/ managers based on some predetermined formula; used to motivate individuals to support strategy-implementation efforts.

Definition

According to the Strategic Management by David and David (15th edition),

Profit sharing. A form of incentive compensation whereby some of a firm's earnings are distributed to employees/ managers based on some predetermined formula; used to motivate individuals to support strategy-implementation efforts.
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