Which of the Following Is a Disadvantage of Gain-Sharing Plans

question 44

Multiple Choice

Which of the following is a disadvantage of gain-sharing plans?

• A)Payouts can occur even if a company's financial performance is poor.
• B)Pay-performance link is indirect.
• C)Employees are required to put up money to exercise grants.
• D)Mandatory stock ownership required by gain-sharing plans can increase turnover rates.

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Definitions:

Client Satisfaction Rating

A measure used to quantify the degree to which a client is happy with the products or services provided by a business, often influencing loyalty and retention.

Traditional Performance Systems

Performance evaluation methods that typically focus on financial metrics and short-term results, often overlooking broader or non-financial measures.

Limitations

The inherent restrictions or constraints that may impact the effectiveness, efficiency, or applicability of a process, study, or initiative.

DuPont Chart

A graphical representation used in financial analysis to display the components of the return on equity formula, helping to understand leverage, operational efficiency, and profitability.