Which pay system gives workers a share of the profits, typically as part of their pay?

Which pay system gives workers a share of the profits, typically as part of their pay?

• A. Piece rates
• B. Profit sharing
• C. Time rate
• D. Bonus system

Answer: (B)

Profit sharing is a pay system where employees receive a portion of the company’s profits, often added to their regular pay. This approach ties what workers earn to how well the business performs, so everyone's efforts can push profits higher. It creates a shared interest: if the company does well, everyone benefits, which can boost motivation, cooperation, and retention. The exact split can vary, but the core idea is that pay includes a share of profits, not just wages for time or pieces produced. In contrast, piece rates pay for each unit produced, regardless of overall profits; time rate pays for hours worked regardless of output; a bonus system is typically a discretionary extra tied to targets or performance but not necessarily a share of profits.

Profit sharing is a pay system where employees receive a portion of the company’s profits, often added to their regular pay. This approach ties what workers earn to how well the business performs, so everyone's efforts can push profits higher. It creates a shared interest: if the company does well, everyone benefits, which can boost motivation, cooperation, and retention. The exact split can vary, but the core idea is that pay includes a share of profits, not just wages for time or pieces produced.

In contrast, piece rates pay for each unit produced, regardless of overall profits; time rate pays for hours worked regardless of output; a bonus system is typically a discretionary extra tied to targets or performance but not necessarily a share of profits.