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Profit Sharing

Profit Sharing? What do you think?

  • It's a good idea! (Please explain!)

    Votes: 6 46.2%

  • It's a bad idea! (Please explain)

    Votes: 3 23.1%

  • Mixed/Neutral/Unsure (Please explain!)

    Votes: 4 30.8%
  • Total voters
    13
Tothian

Tothian

DP Veteran
Joined
Aug 30, 2013
Messages
555
Reaction score
104
Location
New Jersey, United States
Gender
Male
Political Leaning
Independent
My friend Master Legend - he is a real life Superhero that you can find at https://www.facebook.com/therealmasterlegend?fref=ts and https://www.facebook.com/pages/Master-Legend-metaphysic-super-hero/243047912386245

Has had an idea for profit sharing. Due to the economic inbalance in society. His plan was for business owners to be able to own 70% of profits earned - but that in addition to their minimum wage payments - anything extra that the business makes, it all gets redistributed back to the workers.

For example. Let's say the owner of a big chain of restaurants at the end of the month - after paying the employee's salaries and also the taxes and stuff, that they have $1,000,000.00 (one million dollars - for the dyslexic readers out there) left over - 70% of that which would be $700,000.00 (seven hundred thousand dollars) they get to keep - but that the remaining $300,000 all gets distributed back to the employees.

I'm not as smart when it comes to economics. I'm not a socialist - I think I would actually lean capitalist but not too far in that direction - I like it when everyone is prosperous.

I'm not as open-minded when it comes to social issues - I mean I'll hear what people have to say but pretty set in my ways there. When it comes to fiscal issues, I am more willing to hear all sides' ideas on this.
 
Tothian said:
My friend Master Legend - he is a real life Superhero that you can find at https://www.facebook.com/therealmasterlegend?fref=ts and https://www.facebook.com/pages/Master-Legend-metaphysic-super-hero/243047912386245

Has had an idea for profit sharing. Due to the economic inbalance in society. His plan was for business owners to be able to own 70% of profits earned - but that in addition to their minimum wage payments - anything extra that the business makes, it all gets redistributed back to the workers.

For example. Let's say the owner of a big chain of restaurants at the end of the month - after paying the employee's salaries and also the taxes and stuff, that they have $1,000,000.00 (one million dollars - for the dyslexic readers out there) left over - 70% of that which would be $700,000.00 (seven hundred thousand dollars) they get to keep - but that the remaining $300,000 all gets distributed back to the employees.

I'm not as smart when it comes to economics. I'm not a socialist - I think I would actually lean capitalist but not too far in that direction - I like it when everyone is prosperous.

I'm not as open-minded when it comes to social issues - I mean I'll hear what people have to say but pretty set in my ways there. When it comes to fiscal issues, I am more willing to hear all sides' ideas on this.
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If the owner wants to do that, that is his choice. If I owned a Business I wouldn't do it.
 
One size fits all solutions don't work in the real world. If we could go back to free markets everyone would be much more prosperous. Now we are perpetually on the brink.
 
There must be an investment to get a return on that investment. The burger flipper invested his time on a 100% return basis - their salary. That burger flipper did not supply the building, the kitchen equipment or even the meat, buns or condiments - the owner did. The owner took the risk of the investment and gets any profits (or losses) from that investment.
 
Tothian said:
My friend Master Legend - he is a real life Superhero that you can find at https://www.facebook.com/therealmasterlegend?fref=ts and https://www.facebook.com/pages/Master-Legend-metaphysic-super-hero/243047912386245

Has had an idea for profit sharing. Due to the economic inbalance in society. His plan was for business owners to be able to own 70% of profits earned - but that in addition to their minimum wage payments - anything extra that the business makes, it all gets redistributed back to the workers.

For example. Let's say the owner of a big chain of restaurants at the end of the month - after paying the employee's salaries and also the taxes and stuff, that they have $1,000,000.00 (one million dollars - for the dyslexic readers out there) left over - 70% of that which would be $700,000.00 (seven hundred thousand dollars) they get to keep - but that the remaining $300,000 all gets distributed back to the employees.

I'm not as smart when it comes to economics. I'm not a socialist - I think I would actually lean capitalist but not too far in that direction - I like it when everyone is prosperous.

I'm not as open-minded when it comes to social issues - I mean I'll hear what people have to say but pretty set in my ways there. When it comes to fiscal issues, I am more willing to hear all sides' ideas on this.
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I love profit sharing plans for my S-Corp clients with smaller staffs and big profits. Let's say I have 3 employees making $30k each and in December I notice I'm sitting on a $300k profit. I max out my PSP by dumping $7500 into each of their accounts, figure my own wages at $200k and dump $50k into my account...PRESTO! no more profit to deal with and everybody's happy. I save paying tax on $72,500 while socking away a decent chunk of change for myself.
 
In my experience and observations, businesses who do some kind of profit sharing are generally more stable and have happier and more productive employees.

It's not a "one size fits all" thing, of course, but many businesses are short-sighted if they don't offer something. It doesn't have to be a huge percentage, but something tangible that drives home to good employees that they're valued.
 
It certainly can motivate employees to be more productive and cost aware when they have a extra stake in how much profit a company makes.
 
Yes but, not to that extent.

Nice Christmas bonuses and other perks would be more in order. And I'd base in on performance.
 
First, are you talking about a business making the choice to do this, or the government enacting this and forcing it on business owners? Also, and probably the bigger problem is what about those times when profits are small, or even negative profits than can happen from time to time. At that point do all the workers have to take a massive pay cut or pay in to cover the loss?
 
Profit sharing is a great idea but not a great mandatory idea. I worked for an outfit once that had it and it was good incentive to try and make the company prosperous and they had very low turn over. If there is a negative it would be that you get used to that nice check at the end of the fiscal year and then when the company has a bad year and you get nothing it is a big ouch.
 
we do it but it is based on our individual performance and our contribution to the bottom line. Each goal carries a weighted percentage. I do not think the government has any right to force this on anyone
 
Tothian said:
My friend Master Legend - he is a real life Superhero that you can find at https://www.facebook.com/therealmasterlegend?fref=ts and https://www.facebook.com/pages/Master-Legend-metaphysic-super-hero/243047912386245

Has had an idea for profit sharing. Due to the economic inbalance in society. His plan was for business owners to be able to own 70% of profits earned - but that in addition to their minimum wage payments - anything extra that the business makes, it all gets redistributed back to the workers.

For example. Let's say the owner of a big chain of restaurants at the end of the month - after paying the employee's salaries and also the taxes and stuff, that they have $1,000,000.00 (one million dollars - for the dyslexic readers out there) left over - 70% of that which would be $700,000.00 (seven hundred thousand dollars) they get to keep - but that the remaining $300,000 all gets distributed back to the employees.

I'm not as smart when it comes to economics. I'm not a socialist - I think I would actually lean capitalist but not too far in that direction - I like it when everyone is prosperous.

I'm not as open-minded when it comes to social issues - I mean I'll hear what people have to say but pretty set in my ways there. When it comes to fiscal issues, I am more willing to hear all sides' ideas on this.
Click to expand...

I believe in profit sharing and think that not negotiating for profit sharing was a flaw in Union's negotiating platforms since forever. Instead of constantly demanding higher wages the Unions should have demanded profit sharing instead and shared the risk with their employers. If the Company does good, so also do the employees; if the Company does poorly, so also do the employees. That would represent genuine commitment by the employees to the welfare of the Company and vice versa.
 
DaveFagan said:
I believe in profit sharing and think that not negotiating for profit sharing was a flaw in Union's negotiating platforms since forever. Instead of constantly demanding higher wages the Unions should have demanded profit sharing instead and shared the risk with their employers. If the Company does good, so also do the employees; if the Company does poorly, so also do the employees. That would represent genuine commitment by the employees to the welfare of the Company and vice versa.
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If I weren't at home by myself right now, I'd stand up and cheer this post.
 
DaveFagan said:
I believe in profit sharing and think that not negotiating for profit sharing was a flaw in Union's negotiating platforms since forever. Instead of constantly demanding higher wages the Unions should have demanded profit sharing instead and shared the risk with their employers. If the Company does good, so also do the employees; if the Company does poorly, so also do the employees. That would represent genuine commitment by the employees to the welfare of the Company and vice versa.
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Unions do not want to be held accountable for performance, they want to do the least amount of work for the highest pay possible
 
DaveFagan said:
I believe in profit sharing and think that not negotiating for profit sharing was a flaw in Union's negotiating platforms since forever. Instead of constantly demanding higher wages the Unions should have demanded profit sharing instead and shared the risk with their employers. If the Company does good, so also do the employees; if the Company does poorly, so also do the employees. That would represent genuine commitment by the employees to the welfare of the Company and vice versa.
Click to expand...

Exactly, because unions just build cost into company pre-profit and reduce actual profits. I think it is good business sense to do profit sharing. I think the reason a lot of employers do not do it is simply because everybody else doesn't and they worry they will lose their share if they do, but I think profits would actually increase in the long run. The problem is a lot of business owners are more concerned about the short run, and in publicly traded companies they are more concerned about the next quarter, so even if profit sharing would be guaranteed to increase productivity, reduce costs and thus make the business more profitable five years down the road they don't want to do it because they are only thinking in terms of quarterly profits. It requires a lot of foresight and vision to impliment something like that as a CEO.

I think eventually we might see it become more popular, however, in fact a lot of big corporations do it, but I feel it is mostly privately held corporations that do so because they do not have shareholders to answer to. In the end though I do not think it should be mandatory, but I would do it if I owned a business.
 
Kreton said:
First, are you talking about a business making the choice to do this, or the government enacting this and forcing it on business owners? Also, and probably the bigger problem is what about those times when profits are small, or even negative profits than can happen from time to time. At that point do all the workers have to take a massive pay cut or pay in to cover the loss?
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Either or could work. This is my friend's idea that I am sharing with you all. I am not as smart when it comes to fiscal issues as I am with social issues. I think in an ideal society where everyone can be rich - would be nice in theory but the problem is that not all things that sound nice in theory work as easily in practice.

I am never usually the type that likes when ever the government forces anything. Less government control, the better.

I voted Unsure in this poll. I was wanting to hear others' ideas.

I think perhaps your idea of business people using it as a good strategy would be a good way to really encourage employees to work harder and do better. And also there's always the Occupy Movement people who could end up boycotting businesses that don't follow that idea - assuming this idea is ever promoted to the whole world.
 
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