What is Profit Sharing?

Profit sharing (or gain sharing) is a process that opens up communication between employees and employers about improvement opportunities, sustainability and cost-efficiencies that are immediately available to the organisation.

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Discussions about introducing profit sharing to an organisation can be initiated by either employees or employers. Employees and employers are then able to agree on a plan to realise these growth opportunities and cost efficiencies and decide on how these improvements will be measured by objective and agreed key performance indicators (KPI’s). The result is that employees and employers share in the financial upside (or other) that is directly attributed to the improvements.

Gains are only shared if there are improvements above where you start from.

Profit sharing can also be initiated by third parties such business improvement coaches or Unions. But profit sharing is a separate and different service to what Unions provide.  It can complement what they do, although Unions are not involved unless you or they choose and pursue normal processes around such.

Profit sharing is in addition to normal wages, salaries and conditions such as negotiated in Collective Agreements, or specified in relevant awards or other prescriptions. It is not a substitute for such.


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