Distributing a bonus pool Four broad approaches to distributing the pro¬

ceeds of a bonus pool in a profit-sharing plan are listed below.

(1) Each person's share is based on salary.

(2) Each person receives an equal share.

(3) Each person's share is based on position in the organization (larger pay¬ ments to people at higher levels).

(4) Each person's share is based on individual performance relative to some target.

REQUIRED

(a) For each of these alternatives, give two reasons to support the alternative.

(b) For each of these alternatives, give two reasons to oppose the alternative.

(c) Pick the alternative that you think is best and support your choice with an argument of no more than 100 words.

LO1