Evening capital and Maryland gazette. (Annapolis, Md.) 1910-1922, 1919-09-10


RES viz... approximately the amount
.ral living expenses. leaving their sur
plus profits In the business. Any part
| 1ership or any profit sharing plan that
divided up the profits and withdrew
| Jhem m cash at the end of every year
could not last very long.
Why Some Profit-Sharing Plans Fail
Many profit-sharing plans have divid-
I'd profits with employees on a cash
msis and turned the money over to the
| employees every SO often, usually once
| 1 year The result has been that If a
man earning 81 900 year received
| $500 at the end OF the year from a
| Drofit sharing plan, he promptly lifted
his living expenses from IA $1,000 basis
| To IA 81 200 bDsis, and began to LOOK
! upon his income as $1200 rather than
| $1,000. and the extra 500 did little 10
| Increase his activity and efficiency, or
10 promote his intellectual efforts In
| the business concerned.
| Then If period came when bust
ness was dull or poor and he did not
get the extra 500. he found fault with
| the owners Of the business and became
gronchy and inclined to lose interest
| In his work
| Little real substantial benefit comes
from a protit-sharing plan where the
| profits are paid out in cash, except
| perhaps where man uses the money
toward buying home.
r.
ness.
In establishing profit shnring 1t is
Of the utmost Importance that the
entire organization, thc,wage and sal
airy earners, know IN advance ex-
actly what they are expected to ac-
complish. mean by this that on
entering a new year, they should
know EXACTLY what the preceding years
accomplishments have been. The an
nual statement of the concern should
be full and explicit, 80 that every man
engaged In the enterprise will know
what business was done in the pre-
ceding year and on what basis profits
were and are to be distributed.
Some Objections to the Plan Answered.
Many people have said to me: ooh,
but 1t takes a long while for man
who is only saving a small sum each
year to acquire much of financial in
terest In the concern by which he is
employed" | have always found that
such criticism comes from someone
who has not given sufficient thought TO
the subject, for small interest means
as much To the man having COM
paratively small salary as a large in
terest does 10 the man of large affairs.
Let us summarize some of the adj
vantages of this method of profit shar-
ing:
Frst-It is real, IL is genuine. The
organization as a whole, and each indi-
vidual in it, has a definite goal for the
years work They know at the begin
ming of year how much money must
be earned to cover what we will call
fixed charges; they know that they are
being paid salaries to earn those fixed
charges; they know that they share
in all the profits over and above those
fixed charges. and they know the basis
on which they share, and that the
amount Of such profits largely depends
on the individual and collective effort
of each individual in the organization.
This in itself is of great practical
value TO the business from dollar
and-ccnt standpoint.
Second Having reached the goal
set the money over and above the sal
aries they are paid-in other words
their prOtits-are invested In the bust
ness in which they are engaged and
ON which their whole time and thought
and energy should he conferred.
Profit sharing on the basis / favor
IL sometimes objected 10 by men or
concerns who do not wish to let even
their own empoyees know how little or
how much money they are making each
year. IF they are not making enough
money and the business is running on
a close margin each year, then by all
means they should set their situation
before their men, adopt such profit.
sharing plan as | have outlined. and
get the genuine cooperation of every
man towards increasing the profits and
pntting the business in q prosperous
condition.
Tie man who is running on small
margin and making little profit may
object TO making his business affairs
public property, en- the ground that he
would be putting weapon in the hands
81 his competitors. Such mans best
protection against his competitors is a
loyal, closely knit organization of the
highest efficiency, and this important
advantage he can only secure through
bona fide profit-sharing plan.
AS for the man who is making so
much money that he is afraid to LET even
his own employees know how much
he is making. to that man I say that
he is a man who. more than any other
is responsible for the serious differ
ences today existing between capital
and labor for with the growing intel-
ligence of the Masses how can he ex-
.pect such Il situation TO continue?
/ AS for the man who is making large
profits bat who objects to profit sharing
on the ground that he wants to put