Profit Sharing in Small Business (Document)

Profit sharing in a small business is a compensation strategy where employees receive a portion of the company’s profits, usually based on specific criteria or agreements. It aligns employees’ interests with the company’s financial success, motivating increased performance and teamwork. Typically, profit sharing can be in the form of cash bonuses, retirement contributions, or other benefits. It’s often used as an incentive to encourage productivity and loyalty, benefiting both the business and its employees by sharing success and promoting a collaborative work environment.