One Reason That Profit Sharing Plans May NOT Be Effective

question 14

Multiple Choice

One reason that profit sharing plans may NOT be effective is that

• A) it is difficult for employees to see how their individual performance affects the company's total output.
• B) profit sharing always yields very small monetary amounts.
• C) they have been found to decrease levels of worker output.
• D) they are paid on a fixed ratio schedule.

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Definitions:

Successful-Efforts Method

An accounting approach used in the oil and gas industry where costs are capitalized only if they lead to successful finding of new oil or gas reserves.

Drilling

The process of creating holes in the earth's surface in preparation for the exploration or extraction of resources, such as oil and gas.

Oil Wells

Structures drilled into the earth for the purpose of extracting petroleum and other hydrocarbons.

Appraised Fair Value

The estimated market value of an asset based on the judgment of a qualified appraiser at a specific time.