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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.

Compensation and Benefits

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)
  • A
    84% (26)
  • C
    16% (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.

AThe organization and theemployees share the financial gains.Correct

Gainsharing by definition splits financial gains between the organization and employees when performance targets are exceeded, making shared financial reward a core structural component.

BIf goals for improvements are met, employees and managers share the success.Correct

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.

CManagers and employees provide their part of salary for charity.

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.

DEmployees and management work together for reviewing organizational performance.Correct

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

Topics

#gainsharing#incentive compensation#organizational performance#employee involvement

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