Distributing a bonus pool
Four broad approaches to distributing the proceeds of a bonus pool in a profit- sharing plan are listed below:
1. Each person's share is based on salary
2. Each person receives an equal share
3. Each person's share is based on position in the organization (larger payments to people at higher levels).
4. Each person's share is based on individual performance relative to some target.
Required:
1. Give two reasons to support each alternative
2. Give two reasons to oppose each alternative
3. Pick the alternative that you think is best and support your choice with a brief argument.