Question

Which type of compensation plans foster cooperation?

Option 1: Salary-based compensation with no performance-based incentives.
Option 2: Profit-sharing plans that distribute a portion of company profits among employees.
Option 3: Team-based incentives where compensation is tied to the performance of a group or department.
Option 4: Individual commission-based plans with high earnings potential based on personal performance.

Answer 1

Profit-sharing plans and team-based incentives foster cooperation among employees.

Step-by-step explanation:

Option 2: Profit-sharing plans that distribute a portion of company profits among employees foster cooperation. Profit-sharing plans incentivize employees to work together towards the success of the company as the more profit the company makes, the more the employees will receive. This creates a cooperative environment where employees are motivated to collaborate and support each other in order to maximize profits.

In addition, option 3: Team-based incentives where compensation is tied to the performance of a group or department also foster cooperation. When employees are rewarded based on the team's performance, they are more likely to work together and support each other in order to achieve shared goals.