Does the motto ‘Privatize your profits and socialize your losses’ work?
I still remember the phrase ‘Heads I win, tails you lose’ but i did not realize that businesses leverage the concept but call the concept ‘Privatize your profits and socialize your losses’ .
The meaning of the statement is that when the business makes profits due to remarkable performance and rapid growth, the ‘eligible employees’ get to share the profits and when the performance is sub-par then the management stance does not really change as the criteria is still applicable to ‘eligible employees’.
One would ask what seems to be the difference?
The difference is perhaps the definition of ‘eligible employees’
During times of rapid growth, the ‘eligible employees’ mainly comprise of a chosen few and the list is narrower but when there are times of sub par-performance, the ‘eligible employees’ mainly comprise of more people and the list is wider than ever before.
My understanding is that the motto of the management usually works under certain specific circumstances. For Example; the motto seems to work when the size of the business is small and the business does not have to file a 10Q or 10K statement to the FEDs.
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