Mitchell, a small business owner, wants to motivate his employees while also cutting down the high cost of office supplies. He believes that most correspondence, reports, and sales receipts can be e-mailed. Therefore, he has decided to share the benefits of cost savings with his staff as long as they play their part in helping to cut office supply use. Which type of performance-based pay is this scenario an example?
A) profit sharing plan
B) piece rate
C) employee stock ownership plan
D) gainsharing plan

Question

Quizplus · Accepted Answer

Gainsharing plans are designed to share the cost savings from productivity improvements with employees. In this scenario, Mitchell is proposing to share the savings from reduced office supply use with his staff, which aligns with the concept of a gainsharing plan.

Mitchell, a Small Business Owner, Wants to Motivate His Employees