﻿ANALYSIS OF SCHEMES NOW IN FORCE.

17

Determination of Bonus Fund.

In tlie majority of cases the total amount allotted for distribu-
tion among the employees as bonus is a fixed proportion of the
profits; hut in a small number of cases(a) participation stops at a
certain point, beyond which the claims of the employees cease.

In some cases(b) the amount available for the payment of
bonus is not a proportion of the profits, but a sum contingent
upon a certain rate of profit being earned by the business: this
sum is in some cases(°) a fixed percentage on wages (varying in
one instance (No. 18) according to the amount of profits, and in
another (No. 116) according to the length of service of the parti-
cipants), and in others(d) an amount ascending with the rate
of profit earned. In one instance (No. 122) a sum of money
sufficient to buy a fixed number of shares in the undertaking is
apportioned to selected employees.

With profit-sharing gas companies, the bonus varies with the
price of gas according to a fixed scale, rising as the price falls,
and falling as the price rises. These companies are by law
allowed to increase their dividends beyond a certain point only
in proportion to a reduction in the price charged by them for gas.
It follows that a rise of bonus is always accompanied by an
increase of dividend, and may therefore be regarded as an indica-
tion of increased profits, though it is not based (as in other
systems) on a direct distribution of profits.

The Divisible Profits.

The profits taken into account for the purpose of ascertaining
the amount available for distribution as bonus are almost in-
variably the profits earned by the undertaking^) to which the
scheme applies in the year, or in a certain number of cases(f) the
half-year, preceding the distribution, which takes place usually
once a year, but in some cases(s) half-yearly, or even quarterly^)
or monthly.^) The profits in the case of No. 16, however, are
taken from the average results for several years; while firm No.
35 reserves to itself the right to carry forward an amount of
undivided bonus with a view “ to average good and bad years.”

The divisible profits for the purposes of the profit-sharing
scheme are usually declared to be the clear or net profits—that
is to say, the gross profits after deduction of rent, taxes, rates,
wages, salaries, and other working expenses. In joint stock com-

(*) Nos. 2, 8, 22, 44, 51, 78, 116.

(b) Nos. 18, 28, 44, 46, 59, 75, 106, 116, 122, and one anonymous case.

(°) Nos. 18, 28, 46, 116, and one anonymous case.

(d) Nos. 44, 75, 106 ; in the case of No. 106 the amount credited to employees
as bonus must not exceed the amount represented by a 10 per cent, dividend to
shareholders.

(°) the business as a whole ; in one case (No. 35), however, the profits
taken into account are those of a particular department, while in another
(No. 60)—confined to working foremen—they are estimated for each job which
the participant has had charge of.

(*) Nos. 10, 20, 41, 50, 102, 109, and one anonymous case.

(B) Nos. 11, 13, 17, 26, 32, 59, 92, in addition to cases noted under (*)

(h) Nos. 23, 45, 92.

Q For No. 92 distribution may bo monthly, quarterly, or half-yearly, as
may be found most convenient for different classes of recipients.

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