What are profit-sharing schemes based on?

Profit-sharing schemes are designed to distribute a portion of a company's profits to its employees. This approach incentivizes employees by tying their compensation to the organization's financial success, fostering a sense of ownership and motivating them to contribute towards the overall performance of the company. The distribution typically involves a pool of cash that is calculated based on the company’s profits during a specific period. This way, employees directly benefit from the company’s profitability, aligning their interests with those of the business and its shareholders.

The other options do not accurately represent the purpose or mechanics of profit-sharing schemes. For instance, distributing medals, gifts, or certificates does not have a direct financial correlation with the company's profits and does not serve the primary objective of motivating employees through a tangible connection to the company’s financial success.