Topic: Don't you think it's moral to share profits or losses with business owners? (Read 231 times)

in a government owned establishment and in most big firms that have a large numbers of workers, the mode of payment is usually Uniform and not based on individual effort or level of contribution on the set out task. In a real sense, it usually reduces productivity and some really meticulous workers get to work more while receiving same pay like other coulaeage that are working less. Systems like this is found in public schools, government companies and some really big establishment. If by the scheme of the organization, they dime it fit to pay based on individual performance, it's a good one and will boost productivity but the reality is that it's usually not obtainable in most firms.

If it's a start up, paying based on effort has a way of encouraging workers to put in more effort and another way of making it more effective depending on the kind of job in consideration is to reward staff based on set out tasks. So if you're able to carry out certain numbers of task per day, you're sure you've earned a certain amount and then you're motivated to work extra hard while the firm benefit at the other end. It's why some hard working people enjoy cpa marketing because it rewards you based on your productivity. Some banks also carry out thier marketing through that means such that the numbers of customers you bring affects the lay you get at the months end. The result depends on the efficacy of the plan as a well planned out pay per effort working scheme will help boost productivity greatly.

with the methods used in the business sector, the company should appreciate the workers who carry out tasks in their company, it is a must because progress depends on the employees who work in their fields, by giving more attention from the company, they will be more enthusiastic in carrying out their responsibilities.

I think a good company already put a system where it can recognizes the effort of the employees.
some company determine employees performance by target, some determines by other quality. but I've seen plenty of business that gives bonus for employees that did outstanding performance and minimal bonus to the underperforming employees.
such system is already being enforced by some of the companies, not all but some literally impose merit system to reward people who deserves.

on the other hand, rise of salary in unison regardless of performance usually happens in a company that still adopts old way of business.

This is so true, there's no productivity in most of the employees when they've got no involvement in the business and they're in the setting that every pay day they'll receive an exact amount. They could careless to the job that they're working with while the business owner works his ass off 24/7 in getting those leads and sales. But with the involvement of the employees and doing this type of salary, they're inclined to become more productive to generate more sales, as it means more money and income to them.

Different perspective per employee and it's understandable if the majority likes to having that type of payment-scheme with a fixed amount of salary. I'll also do that when you just want to have a peace of mind that you'll get no pressure with the 9-5 work you do daily. We just want to live off with the amount of salary that we get without that much hassle at all but it means real business to those that are into sales-commission basis type.

Although this is also different from those employees that receive generous salaries with stock options for which I guess is the best option of them all.

Running a business by commission gets you this effortlessly, I remember when I started a small business of my own and the pay structure was strictly on commission based.

The more you sell the higher your salary by the end of the month and same for my workers that didn't take their work serious or were just unlucky. Something I noticed is that it favoured the harwoekers/smart workers and it pushes the sales higher.

It was a gadget business but after the area which I had my shop got renovated and the rent increase, as I couldn't afford the rent I had to stop and focused on some other things. When we share our profits and losses with our workers as business owners, it's more productive than giving them a fixed salary because you don't motivate them with that type of payment.

Frequently adjusting your employees pay rates individually based on their performance and how well the business does would be completely unmanageable for any decent sized business. There needs to be a base salary and you can give bonuses and pay raises every now and then for employees that excel. Making employees share the losses is not really ethical because you are exploiting their labor. If you cannot afford to pay their salaries, you can fire the least effective employees and cut some costs elsewhere.

Agree with u because the methods you mentioned are actually systems like these. This is how business is done. No matter how you work, you can find ways to earn in every sector. The owner of the shop also earns through sales and any employee of the shop who sells the product earns some profit.

In fact, the system of income is like this. On one side, it is seen that a component of the shop is coming by selling the products of the shop. On the other hand, the person who is selling is given a target at different times. If he can meet that target, then the shop owner gives him a bonus or commission a part from his salary. This is his extra income. I think every sector has systems to earn this way.

The reason for this is because of the business that you decide to join beforehand. So if you join a business, and agree to get a fixed rate, then you are going to get a fixed rate, there are also jobs where you get paid based on your performance as well, like for example car salesman, makes money based on the profit he makes for the company, the company provides the cars to sell, and the salesman sells to make money.

So there are jobs for either case, and depending on what you do, you can do this. Here where I live, doctors are like that too and that became an issue, as you can see some jobs are not for performance or profitability, if a doctor makes money based on how much profit he brings to the hospital, he has incentives to do more tests on you, even would do useless surgery just to make money, and unethical doctors could cause even death. So all in all, some jobs can't be based on performance and the ones with fixed salary agreed to it beforehand.

In capitalism it's an unspoken agreement that losses aren't shared with workers but there's also no obligation to share profits.
So companies have kept having larger profits without wage increases for decades now. It's a crazy analogy to think about. When you dumb down capitalism it makes little to no sense.

Because even the money we hold in our hands holds no value if there's no labour to back it up. There's no gold reserves now, nothing tangible. Only our work making the gears of the economy turn. Money has value because we give value to it.

So in terms of the question if it's ethical of workers to share profits, under the current system, that's possible under coop ownership. However these companies usually get eaten alive by the large corporations that our economical system favours. Under neoliberalism, the only viable type of company is the megacorp conglomerate.

It is not a moral thing, but it will be very difficult for employees to get a salary based on the company's profit/loss, the reason is because employees need a fixed income according to the agreed contract, by having a fixed salary means they can plan their finances better, even when their company is losing money. And again, the company is a business organization, they need good financial planning for operations and development not only in 1 year, but also 5-10 years into the future, so companies need to avoid sharing their profits/losses with their employees - they need to save and invest their money for the company's operations and development in the future - and if they need it, they can also give rewards/bonuses to their employees to provide motivation and support. So don't think that it is unfair for employees to get a fixed salary while the company is very profitable, what if next year the company loses money? Are employees willing to bear all that? Moreover, employees only work based on orders, while executives work for the future of the company, so of course there is a difference here and they deserve a bigger share.

Employee can't demand anything from profits apart from bonus because they didn't bring capital, idea and working to build the company from scratch so it's not fair to demand profit from the owner who did all the job of making it successful.

And the business model you suggest is exists and instead of working as employees they also bring capital and work as a partner so the company run by many number of owners instead of one, so everyone work as an employee too and they share profits with each other which works in small scale only.

There are many companies that do an annual profit share as a yearly bonus. It encourages employees to work hard as they get a nice bonus, along with their normal salary. I don’t think employees should incur any losses though, that isn’t fair.

Yes, this is an option for some companies. Whatever damage you cause or if you don't reach your target, let's say you're in the marketing department and are responsible for bringing in ten new customers. If you don't meet that target, they'll calculate it and reduce it. Some companies do that. While if you surpass the status quo, they give you the profit on top of it. There's a way it's been done.

Generally, agreement is an agreement, whether the business is doing well or not. They are bound to pay, the business owner would have probably considered this before setting up the business and have an investment or backup money to pay employees.

Also, when it feels like the business doesn't have money anymore and employees are not generating enough, he can lay off some workers to find a way to sustain the business. But unless agreed upon, that your salary will be reduced if not profiting enough or increased when you bring in a certain amount of profit, then the standard payment agreed upon should be paid to employees without question.

I don't see anything wrong if the employers offer an option to pay in fixed amount or share of profit and loss.

But, almost all employers will want to pay in fixed amount because when the business getting bigger, in order to maximize profit is pay the workers as low as possible.

There are no business want to accept useless people, you're either confusing with employees who work in government/officials which is full of low performance employees or you're jealous with your colleagues.

This is an unfair thought though? Not all losses are caused by the employees. If they are performing badly then they should just get fired. But some businesses, they do not have enough profit but this doesn’t mean it was caused by the employees. The employees could be doing more than they could but if the business is really not profitable what can they do?

If the business can’t handle to pay employees anymore there is a simple solution to that. Just close the business so you don’t have to pay them anymore.

In most cases employer and employee do go into agreement also regarding to the terms and conditions of such organization, it could be that what so ever damage does by the employee will be deducted from his or her salary like it is common in my country some months employee will go home at the end without been paid because he mis-sell or got defrauded while selling for the boss. So for me I think it is moral as it will add seriousness and consistency in place of work.or duty.

I have work as a sales boy in a point of sales (POS) office where an short of money for your care will directly deducted from your monthly payment.

1.Morals have nothing to do with economics. Economics is all about efficiency, not morals.
2.Not all businesses can be profitable since Day 1. Many businesses have to survive, while losing money for the first year or two, before they become profitable. How do you imagine the employees of such businesses being underpaid? Who is going to work for less money?
3.The trade unions are going to be pissed off, if the business owners start sharing their losses with their employees. Strikes will occur and this will destroy every company, that has losses.
4.Labor is like every other good or service. If you use it, you will have to pay for it. We don't live in the feudal or slave-owning society and nobody is going to work for free(or for less money) just because his employer isn't making profits.

First, you need to understand that some business or companies does this already. If you are working in a company and you perhaps contributed to damaged products or goods, the manager of the company or business is going to deduct some money from your salary to cover the lose. Also, when there's excessive sales and profit, the employees receives some tips either before their salary or it's paid together with the salary.

I worked in a few place some years back, so at least I had that experience.

I am not saying that every company does these but some business and big company in my country does that.

I am still of the opinion that assessment of work of employees should determine wages increment or depreciation although the second one is very difficult to run and might lead to revolt, it is better to just fire that employee.

Often organizations have loss generating employees and that needs to weeded out rapidly or else the company will suffer. In privately owned companies this is common but in government sectors, this is often neglected and leads to poor quality of service.

However companies also need to run their sales, so they take whatever means necessary.

Are you guys talking about stock options? Some employers do offer that. Although most employees would probably rather go for a regular pay than stocks that go up and down in value.