You work for a fruit and vegetable manufacturer that has three distinct divisions: juice, canned and fresh. Rewarding performance has been on the agenda for the last few management meetings, and it has been proposed that the company would benefit from creating an employee reward system with a profit-sharing component. The proposal is for the company to pool 3 per cent of the company’s profits each month, to be paid out to employees at the end of the year based on their existing salary. It was thought this approach would encourage a commitment to the organisation and help strive for better results. There will be a vote for the current proposal at the next management meeting.

Required

a. Discuss the advantages and disadvantages of the proposal.

b. Outline an alternative reward system