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CHRP Knowledge Exam · Question

What is the primary purpose of 'gainsharing' as a compensation strategy?

Gainsharing directly links employee bonuses to measurable improvements in group or organizational performance, such as cost savings or increased output. It ince

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Question: What is the primary purpose of 'gainsharing' as a compensation strategy?

Answer options:

  • To increase individual base salaries based on performance reviews ✅ To reward employees for achieving departmental or organizational productivity improvements
  • To provide employees with ownership stakes in the company
  • To offer flexible benefits packages based on individual needs

Correct answer: To reward employees for achieving departmental or organizational productivity improvements

Explanation: Gainsharing directly links employee bonuses to measurable improvements in group or organizational performance, such as cost savings or increased output. It incentivizes collective effort.

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