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.
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.

Question

Quizplus · Accepted Answer

The skill-based pay system is not directly tied to profit performance; it is based on the acquisition of new skills. Gain-sharing is more closely tied to operational improvements that can lead to increased profits.

The Reason That Companies Use the Gain Sharing Pay System