Which of the following is a difference between profit-sharing plans and employee ownership plans?
A)Unlike ownership plans,base pay is not reduced when profit-sharing plans are introduced.
B)Ownership plans focus on the success of the organization as a whole,unlike profit-sharing plans.
C)Profit-sharing plans promote individual competition,whereas ownership plans promote group competition.
D)The link between pay and performance is less obvious under ownership than under profit sharing.
E)Ownership plans promote individual competition,whereas profit-sharing plans promote group competition.

Question

Quizplus · Accepted Answer

The key difference between profit-sharing plans and employee ownership plans is in the visibility and directness of the link between pay and performance. In profit-sharing plans, employees receive bonuses based on the company's profits, making the link between their performance and their pay more immediate and apparent. In contrast, employee ownership plans (such as stock ownership plans) provide employees with shares or options that may not directly correlate to their individual performance in the short term, making the link between pay and performance less obvious.

Which of the Following Is a Difference Between Profit-Sharing Plans