Which of the following presents the greatest difficulty in using a profit-sharing plan as a means of rewarding employees?

Question

Options

• APayout levels can be supported effectively only at large organizations
• BEmployees may feel disconnected from factors that contribute to organizational success
• CCompensation managers may have difficulty determining criteria for the plan
• DRewards for financial success are most effective for executive-level employees

• A
  2% (1)
• B
  82% (41)
• C
  12% (6)
• D
  4% (2)

Explanation

Profit-sharing plans distribute rewards based on company-wide financial performance, which often feels abstract or uncontrollable to front-line or non-executive employees. If they cannot see a clear connection between their daily work and the bottom line, motivation and engagement may Extract from HRCI-aligned HR knowledge (Total Rewards domain): Strategic compensation models highlight that for variable pay to be effective, "employees must understand the connection between performance and reward." SPHR guidance warns that profit- sharing can be demotivating if employees feel too far removed from the metrics or don't perceive personal impact on results.

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