Consider the following statements about financial incentives:(A) Unde…

Consider the following statements about financial incentives:

(A) Under co-partnership, employees are offered company shares at a set price which is lower than the market price.

(B) Profit sharing motivates employees to improve their performance and contribute to increase in profits.

(C) Bonus is an incentive offered as a part of the wages or salary to the employees.

(D) In Infosys, the scheme of stock option has been implemented as a part of workers’ wage incentives.

(E) Several wage incentive plans link the payment of wages to increase in productivity at individual or group level.

Which of the statements given above are correct?

Choose the correct answer from the options given below:

Answer & explanation

Correct answer: option 1

The correct answer is Option (1) → (A), (B) and (E) only

(A) Under co-partnership, employees are offered company shares at a set price which is lower than the market price. — Correct. Under co-partnership or stock option, employees get company shares at a set price lower than the market price. Owning shares gives them a feeling of ownership.

(B) Profit sharing motivates employees to improve their performance and contribute to increase in profits. — Correct. Profit sharing gives employees a share in the profits. So they work to improve their performance and raise the profits.

(C) Bonus is an incentive offered as a part of the wages or salary to the employees. — Incorrect. Bonus is offered over and above the wages or salary. It is an extra payment, outside the wages.

(D) In Infosys, the scheme of stock option has been implemented as a part of workers’ wage incentives. — Incorrect. In Infosys, stock option is a part of managerial compensation. It is given to managers.

(E) Several wage incentive plans link the payment of wages to increase in productivity at individual or group level. — Correct. These are productivity linked wage incentives. More output, by a person or a group, brings more pay.

NCERT (2026-27 Edition): “(ii) Productivity linked wage incentives: Several wage incentive plans aims at linking payment of wages to increase in productivity at individual or group level.
(iii) Bonus: Bonus is an incentive offered over and above the wages/ salary to the employees.
(iv) 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.
(v) 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.”