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CHRP Knowledge Exam · Question

A 'gainsharing' plan in compensation typically involves:

Gainsharing is a group incentive program where employees share in the financial benefits of improvements in efficiency, productivity, or cost reduction.

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Question: A 'gainsharing' plan in compensation typically involves:

Answer options: ✅ Distributing a portion of cost savings or productivity gains to employees

  • Paying employees based on individual sales commission
  • Providing stock options to all employees regardless of performance
  • Offering fixed annual bonuses to executives

Correct answer: Distributing a portion of cost savings or productivity gains to employees

Explanation: Gainsharing is a group incentive program where employees share in the financial benefits of improvements in efficiency, productivity, or cost reduction.

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