Read the following passage and answer the question.

Raj is the marketing manager in the company. He does not allow the salesmen working under him to freely express their opinion and feelings regarding work matters. But Raj has the ability to influence others to bring about a change in their behaviour. He assured its employees that no worker will be retrenched from the job. He provided basic salary which helps to satisfy the physiological needs of employees. After 2 years, company earns the profit which he shares with its employees.

After 2 years, company earns the profit which he shares with its employees.

Which financial incentive is discussed in the given lines?

Profit sharing

The correct answer is option 2- Profit sharing.

Profit sharing is the financial incentive discussed in the given lines.

Profit Sharing: Profit sharing is meant to provide a share to employees in the profits of the organisation. This serves to motivate the employees to improve their performance and contribute to increase in profits.

OTHER OPTIONS

Retirement Benefits: Several retirement benefits such as provident fund, pension, and gratuity provide financial security to employees after their retirement. This acts as an incentive when they are in service in the organisation.

Co-partnership/ Stock option- Under these incentive schemes, employees are offered company shares at a set price which is lower than market price. Sometimes, management may allot shares in line of various incentives payable in cash. The allotment of shares creates a feeling of ownership to the employees and makes them to contribute for the growth of the organisation. In Infosys the scheme of stock option has been implemented as a part of managerial compensation.

Pay and allowances: For every employee, salary is the basic monetary incentive. It includes basic pay, dearness allowance and other allowances. Salary system consists of regular increments in the pay every year and enhancement of allowances from time-to-time. In some business organisations, pay hike and increments may be linked to performance.