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knitting. PROFIT-SHARING (i.e. between employer and employed), a method of remunerating labour, under which the employees receive, in addition to See also:

ORDINARY (med. Lat. ordinarius, Fr. ordinaire)

ordinary See also:

WAGES (the plural of " wage," from Late Lat. wadium, a pledge, O. Fr. wagier, gagier)

wages, a See also:

SHARE (O. Eng. scearu, chiefly in compounds, e.g. land-scearu, a share of land, from sceran to cut; cf. " shear" )

share of the profit which the business realizes. The See also:

TERM

term is not infrequently used loosely to include many forms of addition to ordinary wages, such as See also:

BONUS (a jocular application of the Lat. bonus, for bonum, " a good thing ")

bonus on output or quality, gain-sharing and product-bearing. Yet strictly, where an employee or a See also:

GROUP

group See also:

WORKS

works for a share of the product, or is paid so much in addition to ordinary wages in proportion as the product exceeds a certain quantity, or the quality exceeds a certain See also:

standard, in neither of these cases have we profit-sharing, for the See also:

net result of the business may be a large profit or a small one or a loss, and the employee's claim is unaffected. In the same way if a workman is employed on the basis that if in doing a particular See also:

job he saves something out of a stipulated See also:

time of labour, or a stipulated amount of materials, he shall receive in addition to ordinary wages a pro-portion of the value so saved, that is technically gain-sharing, not profit-sharing. Even where the bonus depends strictly on profit, it is not reckoned as profit-sharing, if it is confined to the leading employees. An agreement is of the essence of the See also:

MATTER

matter. It is not profit-sharing where an employer takes something from his profits at his own will and See also:

PLEASURE (through Fr. plaisir from Lat. placere, to please; Gr. rlbovii)

pleasure, and gives it to his employees. Strictly such gifts in See also:

CASH

cash are gratuities, while, when they take other forms, such as better houses, See also:

LIBRARIES

libraries, recreation rooms, See also:

PROVISION (Lat. provisio)

provision for sickness and old See also:

AGE (Fr. age, through late Lat. aetaticum, from aetas)

age, all given at the will of the employer, we have paternalism.

Such benefits thus taken expressly from profits and varying more or less with the amount of profit certainly approach true profit-sharing: they are some-times called " indeterminate " profit-sharing. Though many of the above methods of remunerating, or benefiting, the employed are from time to time included under profit-sharing even by writers of repute, the strict sense of the term was defined by the See also:

INTERNATIONAL, THE

international See also:

CONGRESS (Lat. congressus, coming together, from congredi; cum, with, and gradus, step)

congress on profit-sharing in 1889 as " an agreement freely entered into by which the employed receives a share of profits determined in advance." It does not follow that the agreement must be actually enforceable at See also:

law; some employers to protect themselves from litigation stipulate that it shall not be. Profit-sharing, in the loose sense, must be of untold antiquity; the first See also:

GREAT

great example of profit-sharing in the strict sense is that of the Parisian See also:

house-painter, Edme-See also:

JEAN

Jean Leclaire, " The See also:

FATHER

Father of Profit-Sharing." In 1842 he was employing 3,00 men on See also:

day wages. By greater zeal and intelligence and less See also:

WASTE (O. Fr. wast, guast, gast, gaste; Lat. vastus, vast, desolate)

waste, not necessarily by harder work, he reckoned they could See also:

SAVE, or SAVA (Ger. Sau; Hungarian Szdva; Lat. Savus)

save £3000 a See also:

YEAR

year; and he made it their See also:

INTEREST

interest to do so by arranging that they should receive the greater part of the saving them-selves. This arrangement proved a very great success; the material gain to the men and the improvement in their morale were marked; and Leclaire, who began See also:

LIFE

life with nothing and died See also:

worth £48,000, always maintained that, without the zeal See also:

DRAWN

drawn out in his men by profit-sharing, he never could have made so large a business or gained so much See also:

WEALTH

wealth. In 1908 the See also:

SYSTEM

system was still in active operation in the See also:

FIRM

firm. Its See also:

main features are as follows: after paying 5% interest on the See also:

capital, and small sums as wages of superintendence to the two managing partners, the remaining profit is divided into four parts, one of which goes to the managing partners, one to the Mutual Aid Society, and the remaining See also:

HALF

half to the employees as a See also:

DIVIDEND (Lat. dividendum, a thing to be divided)

dividend on their ordinary wages, exclusive of piece-work and overtime, on which no dividend is paid. The Mutual Aid Society is a registered See also:

BODY

body, and is a limited partner in the firm, the liability of the two managing partners being unlimited and the See also:

CONTROL (Fr. contrdle, older form contre rolle, from Med. Lat. contra-rotulus, a counter roll or copy of a document used to check the original; there is no instance in English of the use of " control " in this, its literal, meaning)

control resting entirely in their hands. The benefits of the Mutual Aid Society, and of the profit-sharing generally, are enjoyed in the main by all the employees of the business, but certain advantages are confined to a limited number of permanent employees. Leclaire's system attracted the marked interest of See also:

John See also:

Stuart See also:

Mill and other English economists, and in 1865–1867 a number of experiments in profit-sharing, or as it was then called, See also:

INDUSTRIAL

industrial See also:

PARTNERSHIP (earlier forms, partener, parcener, from Late Lat. partionarius for partitionarius, from partitio, sharing, pars, part)

partnership, were made in See also:

England, the most noted being that of See also:

Henry See also:

Briggs, Son & Co., at their collieries in See also:

YORKSHIRE

Yorkshire. The main See also:

OBJECT

object in this See also:

case was to detach the workmen from the See also:

trade See also:

union and attach them to the firm. In other ways the experiment was very successful, and £40,000 was divided as bonus on wages in nine years, but the main object was not attained; and when the See also:

price of See also:

COAL

coal See also:

fell heavily after the inflation of 1873 Briggs's men joined the strike to resist a reduction of wages, and the experiment came to an end.

The See also:

PRESENT

present extent of profit-sharing, though in itself considerable, is but small in comparison with the vast extent of the See also:

WORLD

world's See also:

commerce and See also:

INDUSTRY (Lat. industria, from indu-, a form of the pre, position in, and either stare, to stand, or struere, to pile up)

industry, and except in one of its developments, co-partnership, it can hardly be said to be making progress. In 1906 there were in the See also:

UNITED

United See also:

KINGDOM

Kingdom and its colonies 65 ordinary firms practising profit-sharing in its strictest sense, and 17 others known to have adopted and not known to have discontinued it, making 82 in all as against 92 in 1901, and rot in 1894. On the other See also:

hand the number of employees had grown from 28,000 in 1894 to 48,000 in 1906. In addition about one-See also:

FOURTH

fourth of the workmen's co-operative See also:

SOCIETIES, LEARNED

societies in Great See also:

BRITAIN (Gr. Hperavuml vi7vot, Bperravia; Lat. Britannia, rarely Britannia)

Britain (see Co-OPERATION) practise profit-sharing with perhaps 30,000 employees. In 1894 it was found that there were more profit-sharing firms in the See also:

BRITISH

British See also:

EMPIRE

Empire than in any other See also:

COUNTRY (from the Mid. Eng. contre or contrie, and O. Fr. cuntree; Late Lat. contrata, showing the derivation from contra, opposite, over against, thus the tract of land which fronts the sight, cf. Ger. Gegend, neighbourhood)

country, and this is probably still true. The only See also:

RIVAL

rival is See also:

France, where, however, the term " participation aux benefices " is used in a wider sense. There are also important examples in See also:

Germany, the United States, See also:

SWITZERLAND

Switzerland (where the See also:

state once applied the system in the postal service, and still does in the telegraphs), in See also:

Holland, in the socialist co-operative societies of See also:

Belgium, and elsewhere. Profit-sharing has been quickly abandoned in many instances, for various reasons; there were no profits to See also:

DIVIDE

divide; the small bonus given seemed to have no effect; the See also:

hope of detaching the men from their union, or contenting them with See also:

LOWER

lower wages, was not realized; or the business passed into unsympathetic hands. On the other hand, one lasting success in such a matter proves more than many See also:

SHORT, FRANCIS JOB (1857– )

short experiments which failed; and profit-sharing has been splendidly successful where some high-minded See also:

man has breathed into it the spirit of partnership. Often it has been a step to actual partnership; the workman has not only received a share of profit, as added remuneration of his labour, but been led on to invest in the capital of the business, and as a shareholder, to take his share of the profits paid oncapital, as well as of responsibility, of loss if any, and of control. This system of profit-sharing plus shareholding is now known as co-partnership (see Co-OPERATION), and is making undoubted progress. It is exemplified in nearly all profit-sharing co-operative societies, and in a growing number of businesses of non-co-operative origin which accumulate part or the whole of labour's profit in shares.

In 1908, in the Familistere of See also:

Guise the whole capital of £200,000 belonged to the workers and a few retired workers, in Leclaire's old business the Mutual Aid Fund owned half, in the Laroche-See also:

Joubert See also:

paper-works the employees owned more than two-thirds. In the See also:

South See also:

METROPOLITAN (Lat. metropolitanus, Gr. µnrpoiroXtrns)

Metropolitan See also:

Gas Co. the employees owned £327,000 and elected three of the nine See also:

DIRECTORS

directors. It would seem to be in this direction, as a step to full partnership, that profit-sharing has a great future before it. (A.

End of Article: PROFILE

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