The profit sharing scheme at FFS Refiners (Pty) Ltd has been unchanged for a long time and acts as a motivational tool for some employees in the organization. The total population size for this study was 52 employees currently enrolled in a profit sharing scheme. He further notes that employees prefer a reduced salary and are exposed to the risk and variability of the profit sharing scheme.
CHAPTER ONE Introduction
- Introduction
- Motivation for the study
- Focus of the study
- Problem statement
- Research Sub-questions
- Aim and Objectives of the study
- Limitations of the Study The limitations to this study include
- Chapter Summary
The study will enable the researcher to mitigate risks as new proposals for the profit sharing scheme can be implemented. The study will further indicate whether the current profit sharing scheme is effective and whether closer management of the scheme is required. To determine whether the profit sharing scheme should be linked to a performance management tool, e.g.
CHAPTER TWO Review of Literature
Introduction
The literature review
- Motivation of employees exposed to a profit sharing scheme
- Management of profit sharing schemes
An individual profit sharing program is believed to increase employee motivation in organizations (Hadad, Keren, and Barkai, 2010). Profit sharing has the ability to provide employees with income that is directly related to the company's financial performance. There may be employees who are part of a profit-sharing arrangement and whose position does not allow them to add value or contribute to the profitability of the company.
It is therefore recommended that profit sharing schemes should include certain aspects of non-financial objectives, e.g. The common theme of profit sharing schemes is that they are largely linked to the financial performance of the company and therefore do not meet the holistic overall organizational strategy.
Chapter Summary
29 Some senior employees from a variety of sectors believe that a performance management and measurement system is a necessary tool for successful and effective management (Phusavat, Anussornnitisarn, Helo and Dwight, 2009). Profit sharing schemes linked to a performance management tool can be very effective as individuals will try their best to engage holistically within a given department and strive to excel in it. all divisions in order to achieve a good performance measurement result. Therefore, employees are driven to perform in all areas on which they are measured, so that the company's overall finances can improve and thus their individual share of the profit, provided they have earned a good score. of performance (Evans 2007).
The implementation of a balanced scorecard as a strategic management tool to measure employee performance within organizations appears to be a trend being followed globally (Pangarkar and Kirkwood, 2008). If an individual is evaluated with a balanced scorecard, individuals will be very careful about quality aspects as a weak quality control system can lead to a low performance score. 30 The impact of profit sharing on profitability and productivity may be unclear, but the vast majority of literature shows either a neutral or positive effect on profit sharing in organizations (Jana and Petr, 2013).
Long and Fang (2012), cited in Jana and Petr (2013), report that their research shows a positive impact of profit sharing on individual earnings. Bayo-Moriones and Larraza-Kintana (2009) cited in Jana and Petr (2013) also found a positive influence between employee commitment and profit sharing. A gap that this study can exploit is to determine whether the profit sharing scheme motivates employees within FFS Refiners (Pty) Ltd and how the current group of profit sharing employees believe the scheme should work.
It will further highlight employee preferences regarding their pay packages and how to maximize the benefits of a profit sharing scheme.
CHAPTER THREE Research Methodology
- Introduction
- Objectives of the Study
- Participants and Location of the Study
- Data Collection Strategies
- Research Design and Methods
- Description and Purpose
- Pretesting and Validation
- Administration of the Questionnaire
- Analysis of the Data
- Chapter Summary
32 3.2.3 To determine whether the monthly management of the profit sharing scheme would be more beneficial. For the purposes of the current research, the data collection method used was a questionnaire administered to the population. The method chosen for the current research was quantitative in nature and therefore the creation of the questionnaire.
The survey designed ensured that the responses were unbiased as anonymity of the participants was a requirement. The rest of the focus groups were key individuals in the FFS Refiners (Pty) Ltd system. The participants of the focused group are employees from different branches and various levels in the organogram, i.e.
With insightful input from the target group, the questionnaire was modified and finally adapted to the size of the population. For the purpose of the current research, an interval scale was used to enable the researcher to perform arithmetic operations on the collected data. The study location and participants were described in detail along with data collection strategies.
In terms of the research design and methods, details were mentioned regarding the construction of the questionnaire together with the recruitment of study participants.
CHAPTER FOUR
Presentation of Results
Introduction
Results
44 Figure 4.6: Respondents' output would not be the same if they were not on the profit sharing scheme and only received a 13th cheque. Theoretically, having a profit sharing scheme benefits the company as employees are motivated to perform. The profit sharing scheme at branch level should consist of a share of branch and company profits.
47 Figure 4.9: Total score distribution of the respondents regarding the profit sharing scheme that acts as a motivator. 49 Table 4.2: Summary of participants' response to the profit sharing scheme in that they would rather have an increase in salary instead of being exposed to the risk of the profit sharing. 50 Figure 4.12: Overall score for response to the profit sharing scheme in that they would rather have an increase in salary instead of being exposed to the risk of the profit sharing.
52 Table 4.3: Participants' responses highlighting whether the monthly management of the profit sharing scheme would be more beneficial. Monthly management of the profit sharing scheme will drive employees to excel all the time. 54 Table 4.4: Summary of statements about whether the profit sharing scheme should be linked to a performance management tool.
55 Figure 4.19: Overall score for statements about whether the profit sharing scheme should be linked to a performance management tool.
Chapter Summary
CHAPTER FIVE Discussion
Introduction
Discussion of results
- Research objective 1: To determine if the profit sharing scheme acts as a motivator to employees
- Research Objective Three: To determine if the monthly management of the profit sharing scheme would be more beneficial
A high score would indicate that employees are in favor of the salary increase and not exposed to the risk and variability of the profit sharing scheme. The survey participants have shown that they do not prefer this and that they prefer the profit sharing scheme. The majority (87.24%) of the participants indicated that they think like owners of the company because of the profit sharing scheme (Table 4.2).
63 prefer to have a fixed salary rather than exposure to the risk of a profit-sharing scheme. To determine whether monthly management of the profit sharing scheme would be more beneficial, four Likert-type statements were presented to the participants. A larger overall score will indicate that the monthly management of the profit sharing scheme will be more beneficial.
These results suggest that the monthly management of the profit sharing scheme could be more beneficial for FFS Refiners (Pty) Ltd. 65 5.2.4 Research objective 4: To determine whether the profit sharing scheme should be linked to a performance management tool. A greater overall score would indicate that the profit sharing scheme should be linked to a performance management tool.
Therefore, it could be concluded that the profit sharing scheme is necessary to be linked to a performance management tool.
Summary
67 Combining all the statements, results highlighted that 68.75% of the respondents scored ≥16 from a possible score between 5 and 25. 68 Research objective four was to determine whether the profit sharing scheme should be linked to a performance management tool, e.g. . The majority of the literature reviewed supports the objective in that the profit sharing scheme should be linked to a performance management tool.
CHAPTER SIX
Recommendations and Conclusions
- Introduction
- Has the problem been solved?
- Implications of this research
- Recommendations to solve the research problem
- Recommendations for future studies
- Summary
Participants in this survey will be sent the results of the survey so they understand what their peers think the profit sharing scheme should look like. The regular review of the profit-sharing scheme will ensure that non-performing employees are forced to perform, that is to determine the effect of having a profit-sharing scheme that is only linked to a retirement savings, i.e.
A study should be conducted to determine how low in employment levels a company can go to offer a profit sharing scheme. The current study was based on profit sharing employees at FFS Refiners (Pty) Ltd. A study to determine the motivation levels before implementation of the profit sharing scheme to after implementation.
This study should also be linked to a profit sharing scheme that is linked to a pre- and post-implementation balance sheet. In terms of current practices at FFS Refiners (Pty) Ltd, senior management is of the view that the profit sharing scheme acts as a motivator for employees. Most have indicated that they prefer to have a reduced salary and be in the profit sharing scheme even though there is risk in the profit sharing scheme.
The benefit of a regularly reviewed profit-sharing scheme is that it weeds out travelers and rewards hard workers.
Available at:
APPENDICES
Questionnaire
Research Objective One: To determine whether the profit sharing scheme acts as a motivator for employees. 84 Research Objective Two: To determine whether employees on the profit sharing scheme would rather have an increase in salary instead of being exposed to the risk of the profit sharing scheme. When applying for a mortgage or vehicle finance, the profit sharing scheme cannot be used in this application due to the risk and variability of the profit sharing scheme.
Therefore, we would prefer a salary increase with a reduced/zero profit sharing percentage. You believe that some individuals should rather get a raise and not be a part of the profit, because their job function does not add value. So you would rather have a higher salary where you and the employer contribute equally to your current pension/provider fund rather than be exposed to the risk of a profit sharing scheme ie.
As a participant in the profit-sharing scheme, you think like the owner of the company. 85 Research Objective Three: Determine whether month-to-month administration of the profit sharing program would be more beneficial. Research objective four: To determine whether the profit sharing program should be linked to a performance management tool, e.g.
The current profit sharing system is primarily dependent on the financial performance of the organization, which can result in other factors that influence sustainability.
