>> Accounting Basics
Question - Four broad approaches to distributing the proceeds of a bonus pool in a profit-sharing plan are listed below:
Each person's share is based on salary
Each person receives an equal share
Each person's share is based on position in the organization (larger payments to people at higher levels)
Each person's share is based on individual performance relative to some target.
Question 1 - What are two reasons to support each alternative?
Question 2 - What are two reasons to oppose each alternative?