Which one of the following statements best describes profit sharing?
A)Profit sharing is an equal division of all revenues among workers.
B)Profit sharing ties pay to the performance of individuals.
C)Profit sharing is a program that donates profits to the poor.
D)Profit sharing provides a system by which workers receive a share of the firm's profits.
E)Profit sharing discourages free-riding among workers.

Question

Quizplus · Accepted Answer

Profit sharing provides a system by which workers receive a share of the firm's profits. It can be done in various ways such as distributing a portion of profits among employees, setting aside a percentage of profits to be distributed among eligible employees, or giving employees stock options. Profit sharing can be used as a motivational tool to encourage employees to work harder and be more productive, as their earnings will be directly tied to the success of the company.

Which One of the Following Statements Best Describes Profit Sharing