Team Spark LLC, a producer of consumer goods, practiced gainsharing. After organizational restructuring, the management has decided to replace gainsharing plans with a piece-rate system. Which of the following is true of Team Spark LLC?
A) It provided group incentives; now it provides individual incentives.
B) It provided individual incentives; now it provides group incentives.
C) It provided group incentives; now it provides organizational incentives.
D) It provided individual incentives; now it provides organizational incentives.

Question

Quizplus · Accepted Answer

Gainsharing is a group incentive plan where a portion of the cost savings due to improvements in productivity is shared with the employees. On the other hand, a piece-rate system is an individual incentive plan where employees are paid based on the number of units they produce. Therefore, by switching from gainsharing to a piece-rate system, Team Spark LLC has transitioned from providing group incentives to providing individual incentives.

Team Spark LLC, a Producer of Consumer Goods, Practiced Gainsharing