Jenny, the sales executive in an insurance firm, achieves target sales well before the stipulated time. The company recognizes her performance by awarding her a cash prize. Which of the following compensation plans does this scenario illustrate?
A) A merit pay plan
B) Gain sharing plan
C) A bonus pay plan
D) Profit sharing plan

Question

Quizplus · Accepted Answer

This scenario illustrates a bonus pay plan, where an employee is given a one-time cash bonus for achieving exceptional performance or meeting specific goals. The awarding of a cash prize indicates that this is not a long-term plan, such as a profit sharing or gain sharing plan. Furthermore, the fact that the award is based on individual achievement points towards a merit pay plan rather than a team-oriented gain-sharing plan.

Jenny, the Sales Executive in an Insurance Firm, Achieves Target