What incentive scheme pays operational workers a financial bonus based on group productivity gains and operational cost savings achieved by their department?
AGainsharing (e.g., Scanlon Plan)
BProfit Sharing
CPiece-Rate System
DMerit Pay
Explanation
• Gainsharing (e.g., Scanlon, Rucker, Improshare plans) rewards teams with bonuses calculated from measurable reductions in production costs or increases in labor productivity.
• Differs from Profit Sharing, which is based on company-wide net financial profits.
Exam Relevance
- Topic: Compensation & Benefits
- Subtopic: Gainsharing Plans

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