Profit-sharing is a compensation strategy where a company distributes a portion of its profits to employees. This system aims to motivate workers by aligning their interests with the company's success. Employees may receive profit shares as cash bonuses, stock options, or contributions to retirement plans, depending on the company's policy. The profit-sharing model can enhance teamwork and productivity, as employees feel more invested in the company's performance. It is often used by businesses like startups and cooperatives to attract and retain talent, fostering a sense of ownership and encouraging long-term commitment to the organization's goals.