Which of the Following Is a Difference Between Gainsharing and Profit-Sharing

question 7

Multiple Choice

Which of the following is a difference between gainsharing and profit-sharing incentive systems?

• A) Gainsharing is a group incentive system, whereas profit sharing is an individual incentive system.
• B) Gainsharing involves distributing savings among all the employees in a company, whereas profit sharing involves distributing savings among the members of a specific team.
• C) Gainsharing involves sharing cost savings from productivity improvements with employees, whereas profit sharing involves distributing a portion of a company's gains to all employees.
• D) Gainsharing is independent of a team's performance, whereas profit sharing is specific to the contributions of a work group.

---

Definitions:

Asset Turnover Ratio

A financial metric that measures the efficiency of a company at using its assets to generate revenue or sales.

Return On Equity

A financial ratio that measures the amount of net income returned as a percentage of shareholders' equity, indicating the profitability of a company relative to owner's investments.

Profitability Ratio

A financial metric used to evaluate a company's ability to generate income relative to its revenue, operating costs, balance sheet assets, or shareholders' equity.

Budget

An estimate of income and expenditure for a set period of time, often used for planning and managing finances.