What is the primary characteristic of a profit-sharing plan?

The primary characteristic of a profit-sharing plan is the distribution of company profits to employees through bonuses. This type of plan is designed to give employees a direct stake in the company's financial success. By linking a portion of compensation to the company's profitability, profit-sharing encourages employees to work toward the organization’s success, fostering a collaborative environment where everyone is motivated to contribute to higher profits.

In a profit-sharing plan, employees typically receive bonuses based on the company's earnings, which can enhance employee satisfaction and retention as they feel their efforts are directly rewarded through the financial growth of the company. This method aligns the interests of the employees with those of the shareholders, as both benefit from higher profitability.

Other potential options indicate different compensation methods that do not align with the essence of profit-sharing. For instance, guaranteed raises focus on providing fixed increases in salaries, which do not depend on company performance. Provision of stock options relates to employee ownership but is a different mechanism for incentivizing employees. Payments from employees to the company do not pertain to profit-sharing plans, as these plans are fundamentally about the distribution of profits, not contributions.