The president of your company wants to implement a cost savings initiative where all employees will receive a share of the savings. This is an example of what type of compensation program?

The initiative described, where all employees will receive a share of the savings generated by cost-saving measures, is an example of gain-sharing. Gain-sharing is a performance-based compensation approach that aims to improve productivity and encourage employees to work together towards a common goal—specifically, enhancing the company's efficiency and cost-effectiveness.

In a gain-sharing program, if employees collectively achieve financial savings or other targeted improvements, they receive bonuses or a share of those savings, which directly ties their financial incentives to the company's performance. This also fosters a collaborative environment, as all employees have a vested interest in identifying and executing initiatives that lead to cost savings.

This differs from deferred compensation, which involves delaying payment of earnings to a future date, often used as a retirement or tax strategy. Similarly, a discretionary bonus is based on the discretion of the employer and is not necessarily linked to specific savings or performance metrics; it could be awarded for various reasons without a predetermined direct correlation to employee input or company performance. Lastly, commission refers primarily to sales roles, where compensation is based on percentage sales made, rather than a shared savings model. Therefore, the correct response highlights a structured approach to incentivizing collective performance, uniquely characterized by gain-sharing.