Question 1

Incentive pay for executives lays the groundwork for significant ethical issues.

Accepted Answer

A) True 
 B)False  True

Question 2

InfoTech Inc., a sales and marketing company, wants to combine the advantages of different incentive-pay plans and help employees understand the organization's goals. Which plan will help the company accomplish this goal?

Accepted Answer

A)  the Scanlon plan 
B)  a balanced scorecard 
C)  a dashboard 
D)  an employee stock ownership plan 
E)  a differential piece rate system 
A)  the Scanlon plan 
B)  a balanced scorecard 
C)  a dashboard 
D)  an employee stock ownership plan 
E)  a differential piece rate system B

Question 3

Retention bonuses are one-time incentives paid to top managers, engineers, top-performing salespeople, and information technology specialists in exchange for remaining with the company.

Accepted Answer

A) True 
 B)False  True

Question 4

Which statement is true about standard hour plans?

Accepted Answer

A)  They encourage employees to focus exclusively on customer service. 
B)  They succeed only for employees who are not motivated by money. 
C)  They encourage employees to focus mainly on quality. 
D)  In terms of their pros and cons, they are very different from piecework plans. 
E)  They encourage employees to work as fast as they can. 
A)  They encourage employees to focus exclusively on customer service. 
B)  They succeed only for employees who are not motivated by money. 
C)  They encourage employees to focus mainly on quality. 
D)  In terms of their pros and cons, they are very different from piecework plans. 
E)  They encourage employees to work as fast as they can.

Question 5

Executive pay at Ashcroft Inc., a manufacturing company, includes bonuses based on the year's profits or other measures related to the organization's goals. Sometimes, to gain tax advantages, the bonus is made part of executives' retirement plans. What is being exemplified in this scenario?

Accepted Answer

A)  long-term incentives 
B)  balanced scorecards 
C)  piecework plans 
D)  employee stock ownership plans 
E)  short-term incentives 
A)  long-term incentives 
B)  balanced scorecards 
C)  piecework plans 
D)  employee stock ownership plans 
E)  short-term incentives

Question 6

Which incentive plans are specifically designed to promote group performance?

Accepted Answer

A)  performance bonuses 
B)  gainsharing 
C)  standard hour plans 
D)  merit pay 
E)  commissions 
A)  performance bonuses 
B)  gainsharing 
C)  standard hour plans 
D)  merit pay 
E)  commissions

Question 7

West End Hospital was concerned about rising costs for patients who have surgery for joint replacement. It tried rewarding staff in any quarter they met targets for lower use of supplies, but costs continued to rise. An investigation showed that one source of costs was the readmission of patients who experienced infections after surgery. The human resource department proposed setting up a gainsharing program with an effectiveness measure related to reducing infections. Which statement about gainsharing best supports this recommendation?

Accepted Answer

A)  With gainsharing, employees are freed to collaborate on how to improve performance. 
B)  Gainsharing creates a competitive environment, so employees will try to outdo one another. 
C)  Gainsharing is appropriate because the jobs in this case are simple, and so are the performance standards. 
D)  Gainsharing will narrow employees' focus to the key aspects of their individual jobs and rewards. 
E)  The success of gainsharing requires management acceptance of employee input. 
A)  With gainsharing, employees are freed to collaborate on how to improve performance. 
B)  Gainsharing creates a competitive environment, so employees will try to outdo one another. 
C)  Gainsharing is appropriate because the jobs in this case are simple, and so are the performance standards. 
D)  Gainsharing will narrow employees' focus to the key aspects of their individual jobs and rewards. 
E)  The success of gainsharing requires management acceptance of employee input.

Question 8

Organizations that want employees to focus on efficiency and on group incentives are most likely to implement a ________ program.

Accepted Answer

A)  gainsharing 
B)  standard hour 
C)  bonus 
D)  commission 
E)  piece rate pay 
A)  gainsharing 
B)  standard hour 
C)  bonus 
D)  commission 
E)  piece rate pay

Question 9

As an incentive to work efficiently, some organizations pay production workers ________, a wage based on the amount they produce.

Accepted Answer

A)  merit pay 
B)  a sales commission 
C)  standard hour pay 
D)  a piecework rate 
E)  a special bonus 
A)  merit pay 
B)  a sales commission 
C)  standard hour pay 
D)  a piecework rate 
E)  a special bonus

Question 10

Stock options are best suited to motivate day-to-day effort or to attract and retain top individual performers.

Accepted Answer

A) True 
 B)False

Question 11

What common condition is necessary for gainsharing to be successful in an organization?

Accepted Answer

A)  employees who value working in groups 
B)  employers who do not set short-term goals for employees 
C)  work environment with minimum management commitment 
D)  employees who prefer minimum interaction and cooperation 
E)  low levels of cooperation and interaction 
A)  employees who value working in groups 
B)  employers who do not set short-term goals for employees 
C)  work environment with minimum management commitment 
D)  employees who prefer minimum interaction and cooperation 
E)  low levels of cooperation and interaction

Question 12

Vroom Motors, an automobile company, ties individual performance, profits, and other measures of employees' success to a particular form of pay. This form of pay is influential because the amount paid is linked to certain predefined behaviors or outcomes. What pay structure is exemplified in this scenario?

Accepted Answer

A)  minimum wage 
B)  overtime pay 
C)  incentive pay 
D)  piecework rates 
E)  salary 
A)  minimum wage 
B)  overtime pay 
C)  incentive pay 
D)  piecework rates 
E)  salary

Question 13

In larger organizations that have stock ownership plans, the employees may not see a strong link between their actions and the company's stock price.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following best describes profit sharing?

Accepted Answer

A)  a gainsharing program in which employees receive a bonus if the ratio of labor costs to the sales value of production is below a set standard 
B)  incentive pay in which payments are a percentage of the organization's profits and do not become part of the employees' base salary 
C)  a group incentive program that measures improvements in productivity and effectiveness and distributes a portion of profit to employees 
D)  a combination of performance measures directed toward the company's profit and used as the basis for awarding incentive pay 
E)  an incentive plan where a percentage of the previous year's profits is provided to the employees as a part of their salary 
A)  a gainsharing program in which employees receive a bonus if the ratio of labor costs to the sales value of production is below a set standard 
B)  incentive pay in which payments are a percentage of the organization's profits and do not become part of the employees' base salary 
C)  a group incentive program that measures improvements in productivity and effectiveness and distributes a portion of profit to employees 
D)  a combination of performance measures directed toward the company's profit and used as the basis for awarding incentive pay 
E)  an incentive plan where a percentage of the previous year's profits is provided to the employees as a part of their salary

Question 15

Under incentive pay, piecework rates are most suited for routine, standardized jobs with output that is easy to measure.

Accepted Answer

A) True 
 B)False

Question 16

Under the team awards type of group incentive, cost savings is excluded as a performance measure.

Accepted Answer

A) True 
 B)False

Question 17

In a company's merit pay program, an individual's compa-ratio represents

Accepted Answer

A)  the individual's pay relative to the individual's performance rating. 
B)  the individual's pay relative to company's average pay for that position. 
C)  the individual's worth versus that of others in the organization. 
D)  the ratio of the individual's pay to benefits. 
E)  the average worth of the skills possessed by the individual. 
A)  the individual's pay relative to the individual's performance rating. 
B)  the individual's pay relative to company's average pay for that position. 
C)  the individual's worth versus that of others in the organization. 
D)  the ratio of the individual's pay to benefits. 
E)  the average worth of the skills possessed by the individual.

Question 18

Kotochi and Sons, a marketing company, has implemented a few incentive plans to motivate its employees. The organization encourages employees to learn new skills and cooperate with others. Which condition will contribute to employees' feeling that the organization's incentive pay plans are fair and something to pursue?

Accepted Answer

A)  Employees must be able to understand the requirements of the incentive pay plan. 
B)  Equal incentives should be offered to all the employees of the organization. 
C)  Employees must be the key decision makers when creating incentive pay plans. 
D)  The company should not inform the employees about incentive plan changes. 
E)  Employees should make decisions that are only in favor of their interests. 
A)  Employees must be able to understand the requirements of the incentive pay plan. 
B)  Equal incentives should be offered to all the employees of the organization. 
C)  Employees must be the key decision makers when creating incentive pay plans. 
D)  The company should not inform the employees about incentive plan changes. 
E)  Employees should make decisions that are only in favor of their interests.

Question 19

Julie, the HR manager at Forge Corp., wants to ensure that incentive pay rewards the individuals who contribute the most to the organization and whose contributions have grown since their pay rates were originally set. She determines that she can best accomplish these goals by paying an incentive amount based on individuals' performance ratings and compa-ratios. In this scenario, Julie would be applying the system of

Accepted Answer

A)  merit pay. 
B)  piecework pay. 
C)  standard hour pay. 
D)  commissions. 
E)  attendance bonus. 
A)  merit pay. 
B)  piecework pay. 
C)  standard hour pay. 
D)  commissions. 
E)  attendance bonus.

Question 20

The CEO of Workforce asked the human resource manager, May, to propose an approach to incentive pay. May proposes that the company create a gainsharing plan. What action(s) by the company will best increase the likelihood that gainsharing will succeed?

Accepted Answer

A)  hiring employees who prefer to work alone and equipping them with cost data 
B)  sharing data about costs and setting up time for employees to interact 
C)  indicating that failure to achieve goals will lead to job cuts 
D)  using incentive pay as a substitute for goal setting and performance standards 
E)  promoting continuous improvement and limiting time spent on personal interactions 
A)  hiring employees who prefer to work alone and equipping them with cost data 
B)  sharing data about costs and setting up time for employees to interact 
C)  indicating that failure to achieve goals will lead to job cuts 
D)  using incentive pay as a substitute for goal setting and performance standards 
E)  promoting continuous improvement and limiting time spent on personal interactions

Incentive pay for executives lays the groundwork for significant ethical issues.

InfoTech Inc., a sales and marketing company, wants to combine the advantages of different incentive-pay plans and help employees understand the organization's goals. Which plan will help the company accomplish this goal?

Retention bonuses are one-time incentives paid to top managers, engineers, top-performing salespeople, and information technology specialists in exchange for remaining with the company.

Which statement is true about standard hour plans?

Executive pay at Ashcroft Inc., a manufacturing company, includes bonuses based on the year's profits or other measures related to the organization's goals. Sometimes, to gain tax advantages, the bonus is made part of executives' retirement plans. What is being exemplified in this scenario?

Which incentive plans are specifically designed to promote group performance?

Organizations that want employees to focus on efficiency and on group incentives are most likely to implement a ________ program.

As an incentive to work efficiently, some organizations pay production workers ________, a wage based on the amount they produce.

Stock options are best suited to motivate day-to-day effort or to attract and retain top individual performers.

What common condition is necessary for gainsharing to be successful in an organization?

In larger organizations that have stock ownership plans, the employees may not see a strong link between their actions and the company's stock price.

Which of the following best describes profit sharing?

Under incentive pay, piecework rates are most suited for routine, standardized jobs with output that is easy to measure.

Under the team awards type of group incentive, cost savings is excluded as a performance measure.

In a company's merit pay program, an individual's compa-ratio represents

The CEO of Workforce asked the human resource manager, May, to propose an approach to incentive pay. May proposes that the company create a gainsharing plan. What action(s) by the company will best increase the likelihood that gainsharing will succeed?

Managing Human Resources

Trends in Human Resource Management

Providing Equal Employment Opportunity and a Safe Workplace

Analyzing Work and Designing Jobs

Planning for and Recruiting Human Resources

Selecting Employees and Placing Them in Jobs

Training Employees

Developing Employees for Future Success

Creating and Maintaining High-Performance Organizations

Managing Employees Performance

Separating and Retaining Employees

Establishing a Pay Structure

Providing Employee Benefits

Collective Bargaining and Labor Relations

Managing Human Resources Globally

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Exam 13: Recognizing Employee Contributions With Pay

Incentive pay for executives lays the groundwork for significant ethical issues.

InfoTech Inc., a sales and marketing company, wants to combine the advantages of different incentive-pay plans and help employees understand the organization's goals. Which plan will help the company accomplish this goal?

Retention bonuses are one-time incentives paid to top managers, engineers, top-performing salespeople, and information technology specialists in exchange for remaining with the company.

Which statement is true about standard hour plans?

Executive pay at Ashcroft Inc., a manufacturing company, includes bonuses based on the year's profits or other measures related to the organization's goals. Sometimes, to gain tax advantages, the bonus is made part of executives' retirement plans. What is being exemplified in this scenario?

Which incentive plans are specifically designed to promote group performance?

Organizations that want employees to focus on efficiency and on group incentives are most likely to implement a ________ program.

As an incentive to work efficiently, some organizations pay production workers ________, a wage based on the amount they produce.

Stock options are best suited to motivate day-to-day effort or to attract and retain top individual performers.

What common condition is necessary for gainsharing to be successful in an organization?

In larger organizations that have stock ownership plans, the employees may not see a strong link between their actions and the company's stock price.

Which of the following best describes profit sharing?

Under incentive pay, piecework rates are most suited for routine, standardized jobs with output that is easy to measure.

Under the team awards type of group incentive, cost savings is excluded as a performance measure.

In a company's merit pay program, an individual's compa-ratio represents

The CEO of Workforce asked the human resource manager, May, to propose an approach to incentive pay. May proposes that the company create a gainsharing plan. What action(s) by the company will best increase the likelihood that gainsharing will succeed?

Managing Human Resources

Trends in Human Resource Management

Providing Equal Employment Opportunity and a Safe Workplace

Analyzing Work and Designing Jobs

Planning for and Recruiting Human Resources

Selecting Employees and Placing Them in Jobs

Training Employees

Developing Employees for Future Success

Creating and Maintaining High-Performance Organizations

Managing Employees Performance

Separating and Retaining Employees

Establishing a Pay Structure

Providing Employee Benefits

Collective Bargaining and Labor Relations

Managing Human Resources Globally

Filters