Profit-sharing plans
A) provide a more direct incentive in small firms than in large firms.
B) are practically impossible to use successfully in small firms.
C) are similar to individual incentive plans in their motivational effect.
D) are an expensive fringe benefit for small firms, costing 40 percent of payroll.

Question

Quizplus · Accepted Answer

Profit-sharing plans provide a more direct incentive in small firms than in large firms because in small firms, individual contributions are more visible and have a larger impact on the overall profits. In larger firms, it can be more difficult to measure individual contributions to profits and employees may feel less connected to the success of the company as a whole.

Profit-Sharing Plans