profit-related pay meaning
The system of making pay a function of the employer's profits. This normally takes the form of additional payments when profits are good, either as a rise in pay scales or as bonus. Bonuses are more usual, since the level of profits continually varies, and is not usually known until well after normal pay is received. Employers hope that relating pay to profits will make workers more co-operative in trying to achieve profits, decrease labour turnover, and improve morale generally. Employees who are risk-averse may prefer smaller but safer incomes.