Question

Menthorp Inc. wants to design a variable-pay plan that fosters teamwork and business knowledge of its employees. In order to ensure maximum motivation, Menthorp wants its variable-pay plan to show a clear performance-reward link. Which of the following plans is most suitable for Menthorp?1. Gain-sharing plan.2. Cash profit sharing plan.3. Stock ownership plan.4. Stock options plan.

Answer 1

Answer:

2. Cash profit sharing plan

Explanation:

A cash profit-sharing plan is a plan that involves motivating an employee through paying an extra portion for their contribution toward the company. According to the question, Menthorp Inc. wants to design a payment plan for its employees. Since the company uses a variable-pay plan for the motivation of its employees, it suits the cash profit-sharing plan.