Asked by Omaimah Al Yousef on Jun 01, 2024
Verified
Barbara works in a company that pays all the employees a portion of net profits earned at the end of each quarter. Barbara's company offers its employees which type of incentive compensation?
A) Gain-sharing
B) Merit pay
C) Profit-sharing
D) Bonus pay
E) Entrepreneurial pay
Profit-sharing
A company policy of distributing a portion of its profits to its employees as a form of bonus or incentive.
Incentive Compensation
A system of pay based on performance, aiming to motivate employees through rewards tied to achieving specific goals or benchmarks.
Net Profits
The amount of money that remains from revenues after all operating expenses, interest, taxes, and preferred stock dividends have been deducted; a key indicator of a company's financial health.
- Differentiate among incentive compensation strategies and their role in motivating work behavior.
- Scrutinize the ramifications of incentive payment schemes, including bonuses and profit sharing, on the drive of employees.
Verified Answer
CB
Christopher BrownJun 05, 2024
Final Answer :
C
Explanation :
Profit-sharing is a type of incentive compensation where employees receive a portion of the company's net profits, typically distributed at regular intervals such as quarterly or annually. This aligns with the description of Barbara's company's compensation practice.
Learning Objectives
- Differentiate among incentive compensation strategies and their role in motivating work behavior.
- Scrutinize the ramifications of incentive payment schemes, including bonuses and profit sharing, on the drive of employees.