Technical Products, Inc. distributes 15 percent of its profits quarterly to its eight employees. This money...

 

Transcribed Image Text:

Technical Products, Inc. distributes 15 percent of its profits quarterly to its eight employees. This money is invested for their benefit in a retirement plan and is fully vested after five years. An employee, there- fore, has a claim to the retirement fund even if he or she leaves the company after five years of service. The employees range in age from 25 to 59 and have worked for the company from 3 to 27 years. They seem to have recognized the value of the program. However, younger employees sometimes express a stronger preference for cash than for retirement benefits. 101 griwolle In Question 1 What are the most important reasons for structuring the profit-sharing plan as a retire- ment program? Question 2 What is the probable motivational impact of this compensation system? Question 3 How will an employee's age affect the appeal of this plan? What other factors are likely to strengthen or lessen its motivational value? Should it be changed in any way? Technical Products, Inc. distributes 15 percent of its profits quarterly to its eight employees. This money is invested for their benefit in a retirement plan and is fully vested after five years. An employee, there- fore, has a claim to the retirement fund even if he or she leaves the company after five years of service. The employees range in age from 25 to 59 and have worked for the company from 3 to 27 years. They seem to have recognized the value of the program. However, younger employees sometimes express a stronger preference for cash than for retirement benefits. 101 griwolle In Question 1 What are the most important reasons for structuring the profit-sharing plan as a retire- ment program? Question 2 What is the probable motivational impact of this compensation system? Question 3 How will an employee's age affect the appeal of this plan? What other factors are likely to strengthen or lessen its motivational value? Should it be changed in any way?

Answer rating: 100% (QA)

Question 1 The most important reasons for structuring the profitsharing plan as a retirement program are a Longterm financial security By structuring the plan as a retirement program it promotes the e... View the full answer