All of the following statements are true regarding profit sharing plans EXCEPT:
A)they are often used as a means of reducing turnover.
B)they have been criticized as being remote and unrelated to performance.
C)they were designed to motivate cost savings.
D)the group that saves the most money receives the bonus.
E)they provide long-term incentives.

Question

Quizplus · Accepted Answer

Profit sharing plans distribute profits among employees, typically not based on specific cost-saving actions by individual groups, making choice D incorrect as it suggests a direct link between a specific group's cost savings and receiving a bonus, which is not a characteristic of typical profit sharing plans.

All of the Following Statements Are True Regarding Profit Sharing