3 4 4

many of the complex issues facing companies today. They fall short in three
areas:52
Profit-sharing plans Profit-sharing plans distribute a fixed percentage of
total organizational profit to employees in the form of cash bonuses or
deferred bonus amounts.
The first profit-sharing plan was developed at a glassworks in I Jew Geneva,
Pennsylvania, in 1794 by Albert Gallatin, secretary of the treasury under
presidents Jefferson and Madison. Gallatin believed democratic principles
should be applied to industrial operations. Little research has been done on
profit sharing, however
and the practice of profit sharing is not dominant in other industrialized
countries.56
These plans are typically found in three combinations:
1. Cash or current distribution plans provide full payment to participants
soon after profits have been determined; this is usually quarterly or
annually.
2. Deferred plans credit a portion of current profits to employees accounts
with cash payments made at the time of retirement, disability, severance, or
death.
3. A combination of both incorporates aspects of current and deferred options.