After a very successful year when the firm exceeded targeted earnings levels by 10 percent, each employee received extra pay equal to 10 percent of what they earned for the year. This plan is called
A) merit salary.
B) pay-for-knowledge.
C) profit-sharing.
D) gainsharing.
E) pay-for-performance.

Question

Quizplus · Accepted Answer

The plan in question refers to profit-sharing, which involves sharing a portion of the firm's profits with employees as a form of incentive and motivation. In this case, each employee received extra pay equal to 10 percent of what they earned for the year, which is a share of the firm's profits. The other options listed (merit salary, pay-for-knowledge, gainsharing, pay-for-performance) involve different types of incentive plans that do not directly relate to the firm's profits.

After a Very Successful Year When the Firm Exceeded Targeted