Profit-Related Pay

Profit-Related Pay (PRP) is a compensation plan that links employees' earnings to the company's profits. This system motivates staff to contribute to the organization's financial success, as their bonuses or wage increases depend on the profitability of the business. When the company performs well and makes a profit, employees receive additional pay, which aligns their interests with those of the organization. PRP can enhance teamwork and productivity, as employees feel invested in the company’s success. However, it also involves variability, meaning pay can fluctuate with the company's financial performance.