Question

Which of the following best describes profit sharing? incentive pay in which payments are a percentage of the organization's profits and do not become part of the employees' base salary a gainsharing program in which employees receive a bonus if the ratio of labor costs to the sales value of production is below a set standard a group incentive program that measures improvements in productivity and effectiveness and distributes a portion of profit to employees an incentive plan where a percentage of the previous year's profits is provided to the employees as a part of their salary a combination of performance measures directed toward the company's profit and used as the basis for awarding incentive pay

Answer 1

incentive pay in which payments are a percentage of the organization's profits and do not become part of the employees' base salary.

Step-by-step explanation:

Profit can be defined as the total amount of money generated from a business after deducting the costs of production or cost price.

Mathematically, Profit = cost price - selling price

Hence, the statement which best describes profit sharing is that it is an incentive pay in which payments are a percentage of the organization's profits and do not become part of the employees' base salary.