What Is the Fundamental Difference Between Profit-Sharing and Gainsharing

question 21

Multiple Choice

What is the fundamental difference between profit-sharing and gainsharing?

• A)Profit-sharing rewards employees based on the profit the company earns,while gainsharing rewards employees based on productivity improvements.
• B)Profit-sharing has been shown to be more motivating for employees than gainsharing.
• C)Profit-sharing allows more specific measurement of improvements than gainsharing.
• D)Profit-sharing focuses on group rewards,while gainsharing focuses on individual rewards.
• E)Profit-sharing is used mostly by large companies,while gainsharing is used mostly by small companies.

Analyze the implications of owner's investments and withdrawals on the business's financial health.

Understand the basic characteristics and differences between the forms of business entities.

Grasp how financial transactions impact the accounting equation.

Comprehend the presentation and classification of assets in the balance sheet.

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Definitions:

Piece Rate Pay Systems

A compensation method where employees are paid a fixed rate for each unit they produce or task they complete, incentivizing productivity.

Direct Link

A straightforward connection or relationship between two elements, ensuring clear communication or interaction without intermediaries.

Piece Rate Plan

A compensation strategy where workers are paid a fixed rate for each unit of production completed, incentivizing efficiency and productivity.

Office Furniture Maker

A company or individual specialized in designing and manufacturing furniture for office environments.