Which of the following best describes profit sharing?
A) The employer pays employees an incentive based on their merit.
B) The employer pays employees an incentive based on labour cost savings.
C) The employer pays employees a bonus based on the overall productivity of their particular work group.
D) The employer pays employees a special current or deferred sum based on the profits of the enterprise.

Question

Quizplus · Accepted Answer

Profit sharing is the practice of an employer paying employees a special current or deferred sum based on the profits of the enterprise. This can be done as a bonus at the end of the year, or as a percentage of the profits earned over a certain period of time. It is meant to incentivize employees to work harder and more efficiently in order to increase company profits.

Which of the Following Best Describes Profit Sharing