Which of the following statements about developing reward system is incorrect?
A) The key benefit of a profit sharing plan is to encourage employees to think like owners.
B) The key benefit of gain sharing plan is to introduce equity, ensuring the employees who contribute to the business can get a share of the gains.
C) The key benefit of an employee share plan is to reduce free-riding problems.
D) The key benefit of an individual-based incentive system is to highlight improved expectancy and instrumentality.

Question

Quizplus · Accepted Answer

The key benefit of an employee share plan is typically to align the interests of the employees with those of the shareholders by making the employees themselves shareholders. It encourages long-term commitment and loyalty to the company, rather than specifically aiming to reduce free-riding problems. Free-riding problems are more directly addressed by designing incentive systems that ensure individual contributions are recognized and rewarded, rather than by share ownership per se.

Which of the Following Statements About Developing Reward System Is