An organization which follows a cost leadership strategy should use which of the following incentive plans in order to ensure that its strategy is aligned with its HR practice?
A) Profit sharing bonus
B) Gain sharing plan
C) Employee stock option plan
D) Commission based incentives
E) Straight piece rate

Question

Quizplus · Accepted Answer

A gain sharing plan would align with a cost leadership strategy as it incentivizes employees to find ways to reduce costs and increase efficiency, which aligns with the goal of a cost leadership strategy. Profit sharing and stock option plans may incentivize employees to focus on increasing revenue rather than reducing costs. Commission based incentives and straight piece rate plans may incentivize employees to focus on output rather than cost efficiency.

An Organization Which Follows a Cost Leadership Strategy Should Use