The PLR (Profit Sharing) calculation involves distributing part of the company's profits to its employees, according to previously established criteria. To ensure that the PLR calculation is fair and transparent, it is essential that companies follow certain parameters and take into account exceptions such as dismissals, job changes, hirings and salary increases. This avoids conflicts and ensures the satisfaction of everyone involved.
How the PLR is calculated
The amount of the PLR can be calculated in different ways, depending on the criteria defined in the collective agreement, employment contract or company regulations. Here are the most common approaches:
- Fixed Value: The amount is pre-established and does not vary with the company's results. It can be a fixed amount for all employees or vary according to position and seniority.
- Percentage of Profit: The PLR amount is calculated as a percentage of the company's net profit. The percentage is agreed between employer and employee or determined through a collective agreement.
- Performance targets: Some companies set individual or collective performance targets which, when achieved, generate a PLR amount proportional to the result obtained.
PLR amounts and distribution
PLR amounts can vary significantly between companies and are linked to the organization's income. Generally, distribution takes place once a year. However, some companies opt for other periods, such as quarterly. In this process, working hours and the achievement of defined targets are crucial elements in the PLR calculation.
In addition, hirings and salary increases during the year can influence the proportionality of the benefit, requiring special attention from HR managers.
Cases of Exception in PLR Calculation
Although the PLR calculation follows predetermined criteria, there are some situations in which the amount paid can be adjusted, taking into account the specifics of the employee:
- New recruits: For newly hired employees, the PLR is calculated in proportion to the time they worked during the calculation period. In other words, if the employee was hired in the middle of the year or during a period when the PLR was already being calculated, they will only receive a fraction of the amount that would have been due if they had been with the company for the entire period.
- Changes of Position or Function: When an employee changes position or function during the PLR calculation period, the amount to be paid can be adjusted according to the new responsibilities or goals assigned. In general, the PLR is calculated in proportion to the time the employee has spent in each position, and it is necessary to evaluate the goals or results achieved in each position.
- Disconnected employees: If an employee is dismissed during the PLR calculation period, the payment may or may not be made, depending on the rules established by the company and the collective bargaining agreement. When an employee is dismissed before the date set for the PLR payment, they are generally entitled to the benefit in proportion to the time worked during the calculation period. However, in some companies, termination can result in the PLR not being granted, especially if the employee was dismissed for just cause or if the company's regulations provide for this possibility. To avoid conflicts and ensure transparency, it is essential that the rules on the payment of PLR to terminated employees are clearly established.
- Leave of absence: In cases of sick leave, maternity leave or other leave provided for by law, the PLR calculation can be adjusted, taking into account the time the employee was absent. Some agreements provide for proportional payment, while others may guarantee full payment, depending on the conditions agreed between the company and the employee.
- Salary increase: Another important exception to the PLR calculation involves salary increases. When an employee receives a salary increase during the PLR calculation period, there are different approaches to calculating the benefit. Some companies calculate the PLR in proportion to the length of service and the value of the salary before and after the increase, taking into account the change in salary. Other companies choose to calculate the PLR based on the employee's last salary, regardless of when the increase took place.
Tools to Optimize the PLR Calculation
The PLR calculation must be transparent, taking into account the company's results and the employee's working time during the calculation period. It is important for companies to be aware of the exceptions to the PLR calculation, which are the factors that often complicate the process and can lead to problems in the future. Job changes, dismissals, hirings in the middle of the calculation period and other exceptional cases require detailed monitoring to ensure that all employees are treated fairly and in accordance with what was agreed. When these exceptions are not well managed, the calculation can become inaccurate, leading to dissatisfaction or even legal disputes. That's why it's essential to have a system that automates and optimizes these calculations, taking into account all the variables efficiently.
That's why adopting a system that automates the calculation is essential. Get to know AchieveMoreis a platform that offers automation solutions for calculating variable incentives, guaranteeing precision and security for your company and your employees.
