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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
- Option 1: Perquisites
- These are non-monetary benefits provided to employees, like a company car or health insurance. They aren't directly tied to organizational profits.
- Option 2: Productivity linked wage incentives
- These incentives are usually tied to the productivity level of employees, encouraging them to produce more or work more efficiently.
- Option 3: Co-partnership
- Involves giving employees shares in the company, making them part-owners. This is often a long-term incentive.
- Option 4: Profit sharing
- Profit sharing involves distributing a portion of the company's profits to its employees. It's a direct reward for the company's financial success.
- !
- The correct answer is Profit sharing, which fits as the company is sharing profits with employees to recognize their contribution.
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