One solution to profit-sharing during a downturn is to design plans that have downside risk but not upside risk.

Question

Quizplus · Accepted Answer

Profit-sharing plans that only have downside risk and not upside risk would not incentivize employees or align their interests with the company's success. Effective profit-sharing plans typically involve sharing both the upside and downside to motivate and reward employees for contributing to the company's performance.

One Solution to Profit-Sharing During a Downturn Is to Design