Profit-sharing plans are most attractive to employers and employees alike when the firm:
A) employs mostly older workers who are near retirement age.
B) faces highly cyclical ups and downs in product demand.
C) is a small start-up in the high-tech field.
D) has high labor costs.

Question

Quizplus · Accepted Answer

Profit-sharing plans are most attractive in situations where a company faces highly cyclical ups and downs in product demand. This is because during the up cycles, both employers and employees can benefit from the increased profits, providing an incentive for employees to work harder during these periods. It helps align the interests of employees with the financial performance of the company, making it particularly suitable for industries with fluctuating demand.

Profit-Sharing Plans Are Most Attractive to Employers and Employees Alike