Question

Rayshard works for an automobile salvage firm. Last year he started going to monthly meetings with managers and coworkers to evaluate labor-saving ideas. One idea, raising the crane level by 8 feet to clear the building, saved them $2 million. Each of the employees received a $200 bonus for the implementation of that idea. What kind of compensation system is used?A PieceworkB. Scanlon PlanC. Time-saving bonusD. Merit payE. Group incentive

Answer 1

B) Scanlon Plan

Step-by-step explanation:

When a company uses a Scanlon plan incentive policy, it will share the profits resulting from cost saving ideas with its employees. The more money employees can help the company save, the more money they should receive as bonuses.

In this case, one of the ideas proposed by the employees saved the firm $2,000,000, so the company handed out $200 to each employee as a bonus.