A compensation plan that distributes to employees a proportion on net profits earned by the organization is called:

Question

Quizplus · Accepted Answer

Profit-sharing is a compensation plan that distributes a proportion of the net profits earned by the organization to its employees. Gain-sharing is a similar plan but distributes a proportion of the savings earned by the organization. ESOP (Employee Stock Ownership Plan) and stock options are plans that provide employees with ownership or the option to own shares in the organization. Group payout is not a commonly used term in compensation plans.

A Compensation Plan That Distributes to Employees a Proportion on Net