profit-loss account 33

May 13th, 2015
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profit and loss statement describe Personnel & Industrial Relations

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MBA-TEPPersonnel &Industrial RelationsDr. Lorenzo C. LorenzoPresented by:Narciso D. Isidro Jr.Narciso D. Isidro Jr.PROFIT SHARING PLANS Profit sharing is an incentive plan underwhich an employer agrees to share with hispersonnel a specified portion of the net profitsof his business at the end of each fiscal period orover a given period.Ways of Implementing Profit-sharing Equally distributedNet Profit x .03% Number of Employees Performance RatingNet Profit x .03% Number of EmployeesEmployee 1 (90%-100%) = P500Employee 2 (80%-90%) = P300What is the purpose of Profit Sharing? Aims to modify employees attitude toachieve greater employee efficiency,productivity, and loyalty to the firm, andkeener interest in its welfare. It is believed that the employees would feelthey have a stake in the company if they geta direct share in the profits of the enterprisein which they work. Sharing of the firms profit with theemployees is considered a sound employeerelations program.Types of Profit-sharing PlansThree (3) Basic Types of Profit-sharing Plans.Cash Plan At the time profits are determined, contributions are paid directly toemployees in the form of cash, checks, or stock. The amount is taxed as ordinary incomewhen distributed.Deferred Plan Profit-sharing contributions are not paid out currently but rather aredeferred to individual accounts set up for each employee. Benefits and any invest

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