(i) Increased Productivity. The scheme creates an interest and a desire among the workers to work whole heartedly for the concern, because they realize that increase in output or a reduction in cost will benefit not only the employer but also to their personal advantage.
(ii) Improved Industrial Relations. Industrial unrest and strike come to an end and are replaced by the community of interests. The management and workers cooperate to maximize the profits of the concern and thus ensure industrial peace and better industrial relations.
(iii) Increased Earning for Workers. It is an additional earning thus contributes materially to the welfare of the workers. The lump sum paid to them can be sued for some constructive purpose. It also ensures greater economic security.
(iv) Stabilization of Labour Force. The workers who leave the concern during the course of year, lose their share of profit hence the scheme is a positive incentive to the workers to stick on their jobs. Thus, it ensures stabilization of labour.
(v) Improvement in supervision and Administration. As the workers are directly linked with the share of profit and then their morale is keep thigh. They do not need strict supervision. Disciplined workers only can keep the standard of administration high.
(vi) Realization of Social Justice. It achieve some measure of social justice by relating earning of the workers to the company's financial position and by affording them the place of equal partners in an industrial enterprise.
(vii) Sense of Responsibility. The worker is self-motivated and feels a sense of responsibility as he is interested in the prosperity of the concern.
(viii) Advantage the society. Society is benefited to a great extent by the reduction in industrial disputes, reduction in the cost of production, improvement in the quality of the goods and low price of the commodity. Wastage of man, material and machines are avoided or minimized.
(ix) Increased National Income. Lesser industrial disputes, more production, better quality, increased income of workers and employers are some of the contributor factors for the increased national production and national income.