What pay strategy requires employees or departments to establish performance targets, such as "if actual results exceed objectives then all members get bonuses."
A) Profit sharing
B) Bonus system
C) Salary
D) Gain sharing
E) Hourly wage system

Question

Quizplus · Accepted Answer

Gain sharing is a pay strategy that involves setting performance targets and linking them to bonuses for employees or departments. If actual results exceed the objectives, all members get bonuses. This strategy can incentivize employees to work together and be more productive, which can benefit the company as a whole. Profit sharing is also a similar strategy, but it involves sharing a percentage of company profits with employees, rather than setting specific performance targets. Bonus systems may or may not include performance targets, while salary and hourly wage systems do not typically involve performance-based bonuses.

What Pay Strategy Requires Employees or Departments to Establish Performance