A profit-sharing pay scheme:
A) increases both productivity and profits.
B) decreases productivity but increases profits.
C) increases productivity but decreases profits.
D) decreases both productivity and profits.

Question

Quizplus · Accepted Answer

A profit-sharing pay scheme is designed to incentivize employees to work harder and smarter to increase the overall profits of the company. By offering a share of the profits to employees, they have a stake in the success of the company and are motivated to work towards that outcome. This, in turn, can increase both productivity and profits as employees are more engaged and invested in the success of the company. Therefore, option A is the correct choice as it states that both productivity and profits increase as a result of a profit-sharing pay scheme.

A Profit-Sharing Pay Scheme