What Is Profit Sharing

Multiple Choice

What is profit sharing?

A) A gainsharing program in which employees receive a bonus if the ratio of labor costs to the sales value of production is below a set standard.
B) An incentive pay in which payments are a percentage of the organization's profits and do not become part of the employees' base salary.
C) A group incentive program that measures improvements in productivity and effectiveness and distributes a portion of profit to employees.
D) A combination of performance measures directed toward the company's profit and used as the basis for awarding incentive pay.
E) An incentive plan where a percentage of the previous year's profits is provided to employees as a part of salary.