ANALYSIS  OF  SCHEMES  NOW  IN  FORCE.

17

24548  B

Determination  of  Bonus  Fund.
In  tlie  majority  of  cases  the  total  amount  allotted  for  distribution ­
  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  participants), ­
  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  indication ­
  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  invariably ­
  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.