Exam 9: Pay-For-Performance: the Evidence

When identifying what is important to employees,which theory would be most useful?

Explain the expectancy theory of motivation.

According to the agency theory,because employees prefer a salary,they will demand a wage premium in exchange for accepting performance-based pay.

In the formula "Behavior = f (M,A,E)," M denotes monetary incentives.

When employee performance is easily measured and the organization's performance is fairly stable over time,the most effective type of compensation is to offer _____.

When an organization's performance has frequent highs and lows,but individual performance is fairly stable,and performance measures are clear,the most effective compensation mix is to offer _____.

Risk-sharing plans include a provision for cuts in base pay that are only recaptured in years when an organization meets performance objectives.

The ability triangle includes _____.

The corporate performance of Yellow Corp.is fairly stable.However,it is difficult to measure individual performance.In this case,the most effective compensation mix is to offer _____.

Security in terms of compensation refers to the predictability of one's paycheck from one time to the next.

Compare risk-sharing and success-sharing plans.

_____ is the value employees attach to the organization rewards offered for satisfactory job performance.

What predictions can be made about performance-based pay based on Maslow's theory?

There is evidence that every 10 percent increase in the bonus paid to employees by a firm yields a _____ percent increase in ROA to the firm.

Grabhouse Inc.is experiencing an increase in turnover rates of its top employees.Upon consulting with its managers for the reasons for this increase,Grabhouse finds that employees are uneasy with the current pay mix as it involves too many risky elements.In order to make its pay mix less risky,Grabhouse needs to:

Workload and work variety are both components of a total reward system.

Maslow's theory suggests that performance-based pay can be demotivating if it impinges upon employees' capacity to meet daily living needs.

The motivation triangle includes _____.

What are the behaviors that compensation needs to enforce?

Flexible compensation is based on the idea that the organization knows what package of rewards would best suit an individual employee's needs.