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During the year 2018, Halla Walla Limited made surplus profits due to growing reputation of the business as a result of sincerity of its employees. In order to give due recognition to its employees and motivate them to continue with the good work, the company decided to give a certain percentage of profits to them. Identify the type of financial incentive being adopted by the company.
Perquisites
Productivity linked wage incentives
Co-partnership
Profit sharing
- Profit Sharing:
- This incentive involves distributing a portion of the company's profits to employees.
- It's a way to reward employees for their contribution to the company's success.
- It can boost morale and encourage continued hard work.
- Perquisites:
- These are non-monetary benefits like company cars or club memberships.
- They're added bonuses but not directly tied to company profits.
- Productivity Linked Wage Incentives:
- These are payments made based on the level of productivity achieved.
- They're directly related to individual or group performance metrics.
- Co-partnership:
- This involves employees owning shares in the company and having a say in decisions.
- Typically, it extends beyond just sharing profits.
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