Which of the following statements holds true for profit sharing?
A) This plan generally works well for slow-growing organizations.
B) Some workers prefer this plan since profits are normally predictable.
C) Employees must wait for their reward, and this lengthy delay diminishes its impact.
D) Profits are directly related to an employee's effort on the job.

Question

Quizplus · Accepted Answer

Profit sharing plans require the company to share a portion of their profits with employees, typically on an annual basis. However, employees must wait for their reward, and this lengthy delay reduces the impact of the plan. A is incorrect as profit sharing plans work well for fast-growing organizations too. B is incorrect as profits are not always predictable. D is incorrect as profits are often influenced by factors beyond an employee's control, and the plan generally rewards groups rather than individuals.

Which of the Following Statements Holds True for Profit Sharing