In 2011, Harris Optical lost $450,000 in missing merchandise. As a result, it developed a plan in which employees in 2012 would share half of each dollar under $450,000 that was
Lost. Harris Optical is using a ______ plan.
A) pay-for-performance
B) merit pay
C) gainsharing
D) profit sharing

Question

Quizplus · Accepted Answer

This is a clear example of gainsharing, where employees are incentivized to work towards reducing losses or improving organizational performance, and in turn, get to share in the gains (or savings) achieved. Profit sharing, on the other hand, involves sharing a part of the profits earned by the company as a whole, while merit pay and pay-for-performance are typically used to reward individual or team performance.

In 2011, Harris Optical Lost $450,000 in Missing Merchandise