A Managing Director declaring share in the profits to the managers for their contribution in increasing the profits of the company, is an example of which element of Directing function?
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → Motivation
Option (1) Communication — Incorrect. Communication is the exchange of facts, ideas and instructions. Announcing the scheme uses communication, but the scheme itself is meant to make the managers want to work harder.
Option (2) Supervision — Incorrect. Supervision means overseeing the work of subordinates. Giving them a share in profits is not overseeing their work.
Option (3) Leadership — Incorrect. Leadership is the ability to influence people to work willingly for the group’s goals. Here the managers are driven by a monetary reward, not by the personal influence of a leader.
Option (4) Motivation — Correct. Motivation means stimulating people to act to achieve the desired goals. Managers use incentives for this. Profit sharing is a financial incentive: employees get a share in the profits of the organisation, so they work harder to increase those profits.
NCERT (2026-27 Edition): “Financial and Non-Financial Incentives … (iv) Profit Sharing: Profit sharing is meant to provide a share to employees in the profits of the organisation. …” “Motivation … (ii) Motivation: Motivation is the process of stimulating people to action to accomplish desired goals. …” |