What method allows employees to share in the company's profits?

Profit sharing is a compensation strategy where employees receive a share of the company's profits, typically distributed in addition to their regular wages. This method aligns the interests of employees with the company’s financial success, as the better the company performs, the more profit employees can earn. It serves as an incentive for employees to work harder and contribute to the company's overall growth, fostering a team-oriented culture.

By participating in profit sharing, employees may feel more invested in the company's successes and failures, as their personal financial gain is tied to the company's profitability. This is particularly effective in motivating employees to improve productivity and innovation, ultimately leading to better business outcomes.

Other methods such as stock options, commission, and piece work represent different compensation structures that do not directly share profits in the same way. Stock options give employees the opportunity to purchase shares at a set price, but this is contingent upon the stock's performance and does not directly distribute profits. Commission typically rewards sales employees based on their performance and does not involve company-wide profit sharing, while piece work compensates employees based on the number of units produced, focusing on individual output rather than collective profit.