Paul, the HR Manager at Carletta & Co

question 40

Multiple Choice

Paul, the HR manager at Carletta & Co., is trying to implement an effective group incentive plan that measures increases in productivity and effectiveness and distributes a portion of its earnings to all employees. In this case, Paul should apply the incentive scheme of

• A) piecework rate.
• B) gainsharing.
• C) sales commission.
• D) merit pay.
• E) ESOPs.

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Definitions:

Acid-test Ratio

A financial ratio that measures a company’s ability to pay off its short-term liabilities with its quick assets, offering insight into financial stability.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within a year or within the normal operating cycle of a business.

Current Liabilities

Debts or obligations of a company due within a fiscal year or the operating cycle, whichever is longer.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations with its short-term assets.