Choose the correct answer from the options given below:

Given below are two statements, one is labelled as Assertion A and the other is labelled as Reason R
Assertion A: Many companies now enable their employees to share profits or even to participate in company ownership.
Reason R: Worker’s productivity boosts rewards from employers.
In light of the above statements, choose the most appropriate answer from the options given below:

Correct option is A

The correct answer is Both A and R are correct and R is the correct explanation of A.

1. Assertion A is correct: Many companies are now offering profit-sharing programs or allowing employees to participate in company ownership, which has become a common practice in various industries. This arrangement is designed to motivate employees by aligning their interests with the company’s success.
2. Reason R is also correct: The reasoning behind such profit-sharing or ownership models is that when employees have a stake in the company, their productivity often increases because they have a direct interest in the company's success, and this boosts their rewards (e.g., bonuses, dividends, etc.).
3. R provides a valid explanation of A as it explains why companies choose to allow employees to share in profits or company ownership: to boost their productivity and thereby increase the company’s overall performance and profits.

Information Booster

1. Profit Sharing and Employee Ownership:
1.1. Profit sharing is a compensation strategy where employees receive a portion of the company’s profits. This is intended to motivate employees to work harder, as they directly benefit from the company’s success.
1.2. Employee ownership can occur through stock options or employee stock ownership plans (ESOPs), where employees gain partial ownership of the company, leading to a sense of responsibility and investment in its success.
1.3. These practices are thought to improve both employee morale and productivity, as employees are more likely to feel motivated and committed when they are rewarded based on the company's financial performance.

2. Link Between Productivity and Rewards:
2.1. When employees have a stake in the company, such as through profit-sharing or ownership, they tend to view their performance as directly tied to the company's success.
2.2. This increased ownership and investment encourage employees to work harder, innovate, and focus on achieving company goals, which can ultimately lead to higher productivity and better results for the company.
2.3. In such settings, workers are not just employees; they are considered stakeholders, which often fosters a greater sense of loyalty and accountability, further boosting their contribution to the organization’s success.