Profit Sharing and Results: what is it and how to adopt it in your company?

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Profit Sharing and Results: what is it and how to adopt it in your company?

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Attracting talents, increasing productivity and engaging employees are desires of most companies, which is why many of them offer PLR as a benefit. Do you know this acronym? It indicates an organization's Profit and Results Sharing.

Profit Sharing is a remuneration model in which employees receive part of the company's profits as a reward after hitting their goals.

Many professionals are attracted to it when they choose to accept a job offer, so it can be a real ally when it comes to attracting and retain talent in your company. But do you know what it really means? It is not enough to disclose that it offers this benefit without understanding how it works.

It is essential to understand that this bonus is not the salary of employees, it is considered a financial prize for the achievement of goals. So, if you want to include this program in your company, keep reading this article. We will explain how it works and how to organize your finances to implement it and have results. Good reading!

What is Profit Sharing?

In summary, Profit Sharing and Profit Sharing (PLR) or Profit Sharing (PPR) consist of a percentage division of a company's net sales with its employees. This annual bonus is given when predetermined goals are reached by the team.

The value of this bonus will depend on the percentage established in the participation in each company, varying according to its earnings. This means that the amount received by each employee is directly related to their individual result and the profits obtained collectively.

This initiative was mentioned in the Constitution in 1946, but it was only in the 2000s, with Law 10.101, that it was regulated. In 2013, through Law 12.832, it underwent updates. According to the Constitution, every company will be able to implement a PLR program with the objective of rewarding the employee for the results obtained for the company.

However, before adopting this bonus program, the organization must go through an implementation process, in which the category union and employee representatives must be heard.

First of all, it is important to know the two types of benefits, PLR and PPR. As we will see, there is a difference between them, but there are also two fundamental points that apply to both: their adoption, despite being instituted by law, is not mandatory. However, when an organization implements this program, it must guarantee the benefits to the whole team, regardless of the hierarchical level of each one, once the goals and profits are achieved.

What are the differences between PLR and PPR?

PLR stands for Profit Sharing. It is granted to employees when, in addition to having met all the stipulated goals, the company also makes profits. Therefore, the distribution of value among the team is based on the profits obtained.

Meanwhile, PPR stands for Profit Sharing Program. This option aims to reward employees for the goals they have achieved. In this way, it is tied only to concrete goals and objectives, not to the company's profit.

This means that if the company has losses, but the goals are reached, employees will receive the compensation defined by the program in any way.

What are the advantages of adopting in your company?

There are numerous advantages to implementing a Profit and Results sharing program in a company. Through him, employees perceive that they are being valued for their work style=”font-weight: 400;”>.

This ensures that more employees “wear the shirt” of your business and always seek to obtain better results. Therefore, when investing in this benefit, it is important to know in detail the advantages it offers.

Understand better below:

Increased profits for the company

Offering Profit Sharing is one of the benefits that most appeals to employees. In this way, they work more motivated to achieve their goals and, consequently, produce more.

From that, the company gains with the increased productivity which will also lead to greater profits.

No payroll burden

Another advantage for companies is that PLR has no tax burden. That way, you don't have to worry about payroll fees. In addition, the Profit Sharing program can be deducted from Income Tax.

Improvements in services and attendance

With a more productive and engaged team, in addition to making more profits, the company starts to offer better services and service to its customers. It will have employees who are really concerned with reaching more consumers and making them become loyal.

PLR stimulates business growth, as employees feel they are truly an important part of the company and know that their actions are crucial for all goals to be met.

Increased feeling of belonging

The feeling of belonging is very important for the success of any business. If you want to know how to stimulate him in your team, check out this other article here.

PLR directly contributes to this feeling of appreciation and belonging of employees. After all, they know that everyone will be rewarded for their work.

Increased productivity

Another important advantage perceived by companies that adopt PLR is the increase in team productivity. This is because the team knows that their good performance will be rewarded.

In this way, employees become much more committed to improving and meeting all of their goals, which greatly increases productivity as a whole.

More team integration

With more motivated and productive employees, they start working more and more together. In this way, teams become more self-responsible and collaborative.

From this, everyone starts to follow each other's results so that all the company's goals and objectives are achieved.

Reduced absenteeism

The fee of absenteeism refers to when employees are often absent or late. This problem is of great concern to companies, as they usually indicate that employees are unmotivated.

However, by offering Profit Sharing, absenteeism is reduced. Employees will know that if they fulfill all of their obligations, they will receive the benefit. Therefore, you will avoid missing or being late for no reason.

Turnover decrease

Another worrying rate for businesses that is reduced is the turnover, which represents a high turnover in the company. It slows down business development and can directly impact profits.

As we mentioned at the beginning of this article, the PLR ​​offer is one of the great attractions of talents. Therefore, the turnover rate is reduced, as professionals do not want to give up their vacancy.

How to offer this benefit?

Now that you know all the benefits of implementing Profit Sharing in your company, it is important to know how to do it correctly, without compromising your finances.

Regardless of the segment or size of your organization, it is possible to offer this benefit to your employees. However, it is important to develop a plan to include PLR ​​in your strategy.

In addition, it is worth mentioning that the fact that it is comprehensive does not mean that payment can be made at random. Specific regulations must be followed.

Therefore, before offering this benefit, follow the tips below:

Define which goals will be part of the PLR ​​payment

First of all, the company must calmly analyze what are the most important goals for its business and which should be part of the PLR ​​payment. It is important to select those that are relevant to the growth and obtaining the desired profits for your venture.

Among the goals most chosen by some companies are: absenteeism, production, consumer complaints, billing, return of goods, profit, etc.

It is important to set challenging goals, but, at the same time, they are not impossible to achieve. Otherwise, employees will feel unmotivated.

Choose the representatives of the commission

To offer Profit Sharing, the company must set a commission to take care of PLR. It must be composed of representatives of the company itself, of the employees and also by professionals appointed by the union.

This is essential for the payment of the benefit to be made correctly and no setbacks to happen.

Clearly communicate PLR ​​terms

Another fundamental point for the implementation, is to be duly clear about the conditions for the payment of the Profit Sharing. To do this, hold a meeting with all employees and leaders in each sector to explain the purpose of the benefit and clarify all the important points and doubts on the subject.

It is necessary that all employees know exactly which goals need to be reached in order to gain the benefit. This will avoid any misunderstanding.

Therefore, promote internal dialogue and count on the leaders of each team to monitor the productivity of its subordinates and propose improvements so that everyone can achieve their goals.

Although it is not an obligation for companies, establishing Profit Sharing can be an excellent way to improve the organizational climate and retain talent. So, if your organization is looking for ways to maximize motivation and productivity, be sure to add PLR to your benefits program.

Does your company offer Profit Sharing? Tell us your experience with this benefit in the comments!

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