For the firm, the major goal of profit sharing plans is to

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The major goal of profit sharing plans is to better align the interests of the workers with those of the firm, thereby reducing the principal-agent problem. The plan should encourage employees to work harder and make better decisions, as their effort directly impacts their share of the profits. This can lead to an increase in productivity, which can benefit the firm as a whole. Additionally, profit sharing can help the firm retain talented employees, who may be more willing to stay if they believe they have a stake in the company's success.

For the Firm, the Major Goal of Profit Sharing Plans