PHR · Question #165
Which of the following are the key components of gainsharing? Each correct answer represents a complete solution. Choose three.
The correct answer is A. The organization and theemployees share the financial gains. B. If goals for improvements are met, employees and managers share the success. D. Employees and management work together for reviewing organizational performance. Gainsharing is a performance-based compensation strategy that ties financial rewards to measurable organizational improvements through collaboration between employees and management.
Question
Which of the following are the key components of gainsharing? Each correct answer represents a complete solution. Choose three.
Options
- AThe organization and theemployees share the financial gains.
- BIf goals for improvements are met, employees and managers share the success.
- CManagers and employees provide their part of salary for charity.
- DEmployees and management work together for reviewing organizational performance.
How the community answered
(31 responses)- A84% (26)
- C16% (5)
Why each option
Gainsharing is a performance-based compensation strategy that ties financial rewards to measurable organizational improvements through collaboration between employees and management.
Gainsharing by definition splits financial gains between the organization and employees when performance targets are exceeded, making shared financial reward a core structural component.
The program requires that improvement goals be established and, when met, the resulting savings or gains are distributed to both employees and managers, reinforcing shared accountability for outcomes.
Gainsharing does not involve employees or managers contributing portions of their salary to charity - that describes a philanthropic payroll program, not a performance-based compensation model.
Joint review of organizational performance is a foundational element of gainsharing, as employees and management must collaboratively measure results to determine whether gains have been achieved and how to distribute them.
Concept tested: Gainsharing program structure and components
Source: https://www.shrm.org/topics-tools/tools/toolkits/designing-and-managing-incentive-compensation-plans
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