Final answer:
A gain-sharing plan involves payments made by companies to their employees when they exceed certain productivity or cost-saving goals. Such plans enhance productivity and profits by aligning interests and can lead to investment in better machinery, potentially resulting in fewer hires. Pension plans are also important for employee financial security, and employers must insure them by law. Hence, the correct answer is option (a).
Step-by-step explanation:
The plan to which companies make monetary payments to a specific group or groups of employees for producing more output or generating cost savings beyond some established goal is called a gain-sharing plan. This type of incentive program is designed to encourage employees to increase productivity and contribute to the company's success.
When a company implements a gain-sharing plan, profits and earnings that are above a predetermined level are distributed among employees. This not only boosts morale but also aligns the interests of the employees with those of the company, often leading to improved productivity.
Additionally, gain-sharing plans can sometimes result in employers investing in better equipment or technology, thereby making workers more productive due to the use of superior physical capital equipment. However, it is worth noting that such investments could lead to the firm hiring fewer workers.