In which of the following, the payment of bonus is linked to performance of specific employees or group of employees?

(a) Profit sharing

(b) Gain sharing plans

(c) Social system plans

Code:

The correct option is Gain sharing plans

 Key Points

• In Gain sharing the payment of bonus is linked to the performance of employees
• The organization aims to enhance the performance of employees through involvement and participation. the result of performance improvement they get the financial benefit.
• By comparing actual performance with the standard performance the gain is calculated.
• The gain sharing happens on a different periodic interval based on each period result.

Advantages of gain-sharing plans

• Enhances the sense of belongingness and morale of the workers towards the organization
• Motivating the employees to achieve greater
• Increase the level of involvement
• Self-motivating monitory benefit leads to a higher level of performance  

Hence the correct answer is gain sharing plan