The reason that companies use the gain-sharing pay system and the skill-based pay system to compensate teams of employees is that both are closely tied to profit performance.

Question

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The skill-based pay system is tied to the team's achievement of new skills that do not necessarily translate into increased sales or profits. The gain-sharing system is tied to quality improvements in operations, customer satisfaction ratings, and production improvements, which we hope will translate into increased profits. There is a better chance that increased profits can be attributed to quality improvements.

The Reason That Companies Use the Gain-Sharing Pay System and the Skill-Based