Which of the Following Best Describes Profit Sharing

question 14

Multiple Choice

Which of the following best describes profit sharing?

• A) a gainsharing program in which employees receive a bonus if the ratio of labor costs to the sales value of production is below a set standard
• B) incentive pay in which payments are a percentage of the organization's profits and do not become part of the employees' base salary
• C) a group incentive program that measures improvements in productivity and effectiveness and distributes a portion of profit to employees
• D) a combination of performance measures directed toward the company's profit and used as the basis for awarding incentive pay
• E) an incentive plan where a percentage of the previous year's profits is provided to the employees as a part of their salary

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