Answer :
Final answer:
Exsell may need to shift from a gainsharing to a profit-sharing program if it's found that its emphasis on productivity is undermining product quality, impacting profitability and market position. Switching to a profit-sharing program would incentivize overall profitability rather than sheer production quantity.
Explanation:
The question suggests that Exsell might need to replace gainsharing with profit-sharing as a variable pay program. This idea can be supported if it is true that the quality of the products has taken a hit despite high productivity levels (option C). If increasing productivity is leading to a compromise in quality, this means that an overemphasis on quantity and speed of production, driven by the gainsharing incentive plan, maybe leading to quality shortcuts.
A profit-sharing plan could incentivize overall business performance and profitability over sheer production output, which might be a more sustainable model for the company. It could encourage employees to care about product quality as that would ultimately affect the profitability of the company in the long run.
It is important for a business like Exsell to balance the need for high productivity with a focus on quality to ensure its market position and profitability.
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