Which of the following is a disadvantage of profit sharing?

Question: Which of the following is a disadvantage of profit sharing plans? Employees are taxed heavily on the income that they generate from profit sharing plans. Employees must trust that management will accurately disclose financial and profit information.

Which of the following is a disadvantage of profit sharing plan?

Which of the following is a disadvantage of profit/sharing plans? … Employees are taxed heavily on the income that they generate from profitsharing plans.

What is bad about profit sharing?

Profit sharing may increase compensation risks for employees by making earnings more variable. Profit sharing may incur high administrative costs. There is a negative link between unionization and profit sharing as most unions oppose such organizational incentive programs.

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Which of the following is an advantage of perquisites?

Which of the following is an advantage of perquisites? Perks offer substantial tax savings because some of them are not taxed as income. In a straight piece-rate system, wages are determined by: … require employees to pay a larger proportion of their health benefits costs.

What is a major problem with profit sharing plans?

A weakness of profit-sharing plans is that employees do not have total control over the profitability of the organization. Because profit-sharing plans often fail to pay off for several years in a row, they can have limited motivational value.

Which of the following is a disadvantage of providing flexible benefits plans?

The major disadvantages of a flexible benefits package are: • Employees make bad choices and find themselves not covered for predictable emergencies. Administrative burdens and expenses increase. Adverse selection: Employees pick only benefits they will use; the subsequent high benefit utilization increases its cost.

Which of the following is true of Green circled employees?

Which of the following is true of green-circled employees? They are paid below the range set for a job. … It is frequently a result of labor market pay levels increasing faster than current employees’ pay adjustments.

Is profit sharing illegal?

Profit sharing agreements are a contract between employers and employees, and both parties are legally bound to the initial agreement.

How much is profit sharing usually?

Requirements for Profit-Sharing Plans

As of 2020, a company’s contribution limit for sharing its profits with an employee is less than 25 percent of the employee’s compensation or $57,000. The total amount of a worker’s salary that can be considered for profit sharing is limited to $285,000 in 2020.

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Can you withdraw from profit sharing?

If you participate in a profit-sharing plan, you may begin withdrawing funds after age 59½ without incurring a 10% income tax penalty. Withdrawals are taxed as ordinary income. Some plans may allow early withdrawals. … Some companies offer a combination arrangement with both a profit-sharing plan and a 401(k).

Which of the following is an advantage of union representation in organizations?

Unions are associated with higher productivity, lower employee turnover, improved workplace communication, and a better-trained workforce. There is a substantial amount of academic literature on the following benefits of unions and unionization to employers and the economy: Economic growth.

Which of the following is an advantage of individual incentive plans?

Advantages of Individual Incentives:

Employees are individually motivated for a higher level of performance in the organization. Organizational ability will increase due to individual’s satisfaction at work. Individual incentives will result in greater job satisfaction and organizational productivity.

Which of the following is an advantage of providing stock ownership options as variable pay to employees?

Which of the following is an advantage of providing stock ownership options as variable pay to employees? It reinforces team identity. It is the simplest type of variable-pay plan.

What are the advantages and limitations of profit sharing?

Profit sharing plan does not create interest in hard work continuously because profits given only once in a year.

Limitations of Profit Sharing:

  • No distinction between efficient and inefficient: …
  • Uncertainty of profits: …
  • Manipulation of accounts by management: …
  • Opposition by trade unions:

What are the disadvantages of an employee owned business?

List of the Cons of Employee-Owned Companies

  • It eliminates the benefits of strategic buying. …
  • Financing may be difficult to obtain for some ESOPs. …
  • There are fees which must be paid. …
  • It requires broad shareholder ownership. …
  • ESOPs can also create a cash-flow drain. …
  • There are distribution restrictions to consider.
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Which of the following is a disadvantage of using group bonuses?

Which of the following is a disadvantage of using group bonuses? It could result in competition among groups.