A widely recognized group incentive plan based on labor cost savings is the:

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The Scanlon plan is a group incentive plan that encourages employees to suggest ideas for reducing labor costs and increasing productivity. The plan calculates the amount of cost savings achieved through employee suggestions, and then divides a portion of those savings among the employees. This plan is widely recognized and has been implemented in many organizations, making it the best choice among the given options. Merit savings plans and premium pay plans are typically based on individual performance rather than group performance, while piece rate plans are based on individual output. Profit sharing plans are also based on overall company performance rather than labor cost savings specifically.

A Widely Recognized Group Incentive Plan Based on Labor Cost