Question 1

A straight salary plan is the most frequently used type of sales incentive plan.

Accepted Answer

A) True 
 B)False

Question 2

Many potential errors, as well as discrimination, can occur in the performance appraisal process. Which of the following can such errors lead to?

Accepted Answer

A)  problematic stock options 
B)  problematic merit pay 
C)  problematic job evaluations 
D)  problematic market pay rates 
A)  problematic stock options 
B)  problematic merit pay 
C)  problematic job evaluations 
D)  problematic market pay rates

Question 3

A key advantage of incentive plans is that they represent variable costs that are linked to the realization of goals as opposed to a fixed cost such as salary that may be largely unrelated to true performance (i.e., output)..

Accepted Answer

A) True 
 B)False

Question 4

Because of failing popularity and media scandals, the number of Canadian companies granting stock options to nonexecutive personnel has been decreasing in recent years.

Accepted Answer

A) True 
 B)False

Question 5

Peter Drucker, the management expert, has argued that CEO pay should not be more than 20 times that of the rank-and-file employee. What did his concern focus on?

Accepted Answer

A)  the pay gap between CEOs and employees 
B)  the perks that CEOs enjoy 
C)  the need to raise the minimum wage for workers 
D)  the relative basic education of executives versus the increasing sophistication of employees' knowledge 
A)  the pay gap between CEOs and employees 
B)  the perks that CEOs enjoy 
C)  the need to raise the minimum wage for workers 
D)  the relative basic education of executives versus the increasing sophistication of employees' knowledge

Question 6

Merit pay plans have been criticized because the merit increase may not be sufficient to raise the employee's base pay.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is NOT a problem with merit raises?

Accepted Answer

A)  Employees expect the raise even when performance declines. 
B)  Employees do not trust management. 
C)  The raise may be based on favouritism. 
D)  The raise may be based on achieving an objective standard. 
A)  Employees expect the raise even when performance declines. 
B)  Employees do not trust management. 
C)  The raise may be based on favouritism. 
D)  The raise may be based on achieving an objective standard.

Question 8

Enterprise incentive plans allow all organizational members to participate in the plan's payout.

Accepted Answer

A) True 
 B)False

Question 9

Navin works as a sales representative for Rogers Pet Foods. He is on a commission plan. His individual performance has been steady over the past few months but he has noticed a decline in his pay. Which of the following is NOT a likely cause for Naveen's pay decline?

Accepted Answer

A)  changes in the economy 
B)  increased competition from rival pet food suppliers 
C)  his intrinsic motivation 
D)  seasonal fluctuations in the demand for pet food 
A)  changes in the economy 
B)  increased competition from rival pet food suppliers 
C)  his intrinsic motivation 
D)  seasonal fluctuations in the demand for pet food

Question 10

Lump-sum merit pay does not contribute to escalating base salary levels.

Accepted Answer

A) True 
 B)False

Question 11

It was revealed in the press that the former CEO of a Fortune 100 firm enjoyed special use of the company plane and a country club membership as a part of his reward package. Which of the following best describes these benefits?

Accepted Answer

A)  they are illegal, but executives usually get away without being caught 
B)  they are known as perquisites 
C)  they are known as golden parachutes 
D)  they are unusual for top executives 
A)  they are illegal, but executives usually get away without being caught 
B)  they are known as perquisites 
C)  they are known as golden parachutes 
D)  they are unusual for top executives

Question 12

Why are some compensation plans referred to as variable pay?

Accepted Answer

A)  because employee pay varies with market pay 
B)  because employee pay is comprised of varying components 
C)  because employee pay is linked to performance 
D)  because employer costs vary with the incentives offered 
A)  because employee pay varies with market pay 
B)  because employee pay is comprised of varying components 
C)  because employee pay is linked to performance 
D)  because employer costs vary with the incentives offered

Question 13

Which of the following is a major problem of ESOPs?

Accepted Answer

A)  Employees may become demotivated and frustrated if the share price falls, even though they have worked productively. 
B)  ESOPs place employees' pensions at risk because they are tied to the market performance of the organization. 
C)  Because of the cash involved, ESOPs can be damaging to the financial well-being of the organization. 
D)  Employees view the ESOP as a form of management control. 
A)  Employees may become demotivated and frustrated if the share price falls, even though they have worked productively. 
B)  ESOPs place employees' pensions at risk because they are tied to the market performance of the organization. 
C)  Because of the cash involved, ESOPs can be damaging to the financial well-being of the organization. 
D)  Employees view the ESOP as a form of management control.

Question 14

Amelia received a stellar performance appraisal in 2012, which translated to a 10 percent pay raise for the next year. Her 2010 base pay was $50,000. Which of the following applies to 2013?

Accepted Answer

A)  her employer would give her a bonus of $5,000 
B)  her pay would remain $50,000 but she would most likely get a promotion 
C)  her employer would add 10 percent to all her 2010 compensation components-base pay, incentives, benefits, and perks 
D)  $5,000 would be added to her 2010 base pay 
A)  her employer would give her a bonus of $5,000 
B)  her pay would remain $50,000 but she would most likely get a promotion 
C)  her employer would add 10 percent to all her 2010 compensation components-base pay, incentives, benefits, and perks 
D)  $5,000 would be added to her 2010 base pay

Question 15

What is the philosophy behind the Scanlon Plan?

Accepted Answer

A)  Rewards are shared with employees based on improved profits. 
B)  Employees should offer ideas and suggestions to improve productivity and, in turn, be rewarded for their constructive efforts. 
C)  Organizational profits should improve through sales efforts. 
D)  Managers and employees should establish quality and quantity goals for optimum organizational performance. 
A)  Rewards are shared with employees based on improved profits. 
B)  Employees should offer ideas and suggestions to improve productivity and, in turn, be rewarded for their constructive efforts. 
C)  Organizational profits should improve through sales efforts. 
D)  Managers and employees should establish quality and quantity goals for optimum organizational performance.

Question 16

Approximately 50 percent of Canadian companies offer some form of variable pay.

Accepted Answer

A) True 
 B)False

Question 17

The level of incentives given to executives may depend on their level in the firm.

Accepted Answer

A) True 
 B)False

Question 18

Because profit-sharing plans often fail to pay off for several years in a row, they can have limited motivational value.

Accepted Answer

A) True 
 B)False

Question 19

One clear trend in strategic compensation management is the growth of incentive programs for employees throughout the organization.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following would NOT be a problem with merit raises?

Accepted Answer

A)  if they are based upon objective, measurable criteria 
B)  if they are based upon the rise in the cost of living 
C)  if they are based on subjective performance appraisals 
D)  if they are tied to the length of service of the employee 
A)  if they are based upon objective, measurable criteria 
B)  if they are based upon the rise in the cost of living 
C)  if they are based on subjective performance appraisals 
D)  if they are tied to the length of service of the employee

A straight salary plan is the most frequently used type of sales incentive plan.

Many potential errors, as well as discrimination, can occur in the performance appraisal process. Which of the following can such errors lead to?

A key advantage of incentive plans is that they represent variable costs that are linked to the realization of goals as opposed to a fixed cost such as salary that may be largely unrelated to true performance (i.e., output)..

Because of failing popularity and media scandals, the number of Canadian companies granting stock options to nonexecutive personnel has been decreasing in recent years.

Peter Drucker, the management expert, has argued that CEO pay should not be more than 20 times that of the rank-and-file employee. What did his concern focus on?

Merit pay plans have been criticized because the merit increase may not be sufficient to raise the employee's base pay.

Which of the following is NOT a problem with merit raises?

Enterprise incentive plans allow all organizational members to participate in the plan's payout.

Navin works as a sales representative for Rogers Pet Foods. He is on a commission plan. His individual performance has been steady over the past few months but he has noticed a decline in his pay. Which of the following is NOT a likely cause for Naveen's pay decline?

Lump-sum merit pay does not contribute to escalating base salary levels.

It was revealed in the press that the former CEO of a Fortune 100 firm enjoyed special use of the company plane and a country club membership as a part of his reward package. Which of the following best describes these benefits?

Why are some compensation plans referred to as variable pay?

Which of the following is a major problem of ESOPs?

Amelia received a stellar performance appraisal in 2012, which translated to a 10 percent pay raise for the next year. Her 2010 base pay was $50,000. Which of the following applies to 2013?

What is the philosophy behind the Scanlon Plan?

Approximately 50 percent of Canadian companies offer some form of variable pay.

The level of incentives given to executives may depend on their level in the firm.

Because profit-sharing plans often fail to pay off for several years in a row, they can have limited motivational value.

One clear trend in strategic compensation management is the growth of incentive programs for employees throughout the organization.

Which of the following would NOT be a problem with merit raises?

The World of Human Resources Management

Strategy and Human Resources Planning

Equity and Diversity in Human Resources Management

Job Analysis and Work Design

Branding the Talent Pool: Recruitment and Careers

Employee Selection

Training and Development

Performance Management and the Employee Appraisal Process

Managing Compensation

Employee Benefits

Promoting Safety and Health

Employee Rights and Discipline

The Dynamics of Labour Relations

International Human Resources Management

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Exam 10: Pay for Performance: Incentive Rewards

A straight salary plan is the most frequently used type of sales incentive plan.

Many potential errors, as well as discrimination, can occur in the performance appraisal process. Which of the following can such errors lead to?

A key advantage of incentive plans is that they represent variable costs that are linked to the realization of goals as opposed to a fixed cost such as salary that may be largely unrelated to true performance (i.e., output)..

Because of failing popularity and media scandals, the number of Canadian companies granting stock options to nonexecutive personnel has been decreasing in recent years.

Peter Drucker, the management expert, has argued that CEO pay should not be more than 20 times that of the rank-and-file employee. What did his concern focus on?

Merit pay plans have been criticized because the merit increase may not be sufficient to raise the employee's base pay.

Which of the following is NOT a problem with merit raises?

Enterprise incentive plans allow all organizational members to participate in the plan's payout.

Navin works as a sales representative for Rogers Pet Foods. He is on a commission plan. His individual performance has been steady over the past few months but he has noticed a decline in his pay. Which of the following is NOT a likely cause for Naveen's pay decline?

Lump-sum merit pay does not contribute to escalating base salary levels.

It was revealed in the press that the former CEO of a Fortune 100 firm enjoyed special use of the company plane and a country club membership as a part of his reward package. Which of the following best describes these benefits?

Why are some compensation plans referred to as variable pay?

Which of the following is a major problem of ESOPs?

Amelia received a stellar performance appraisal in 2012, which translated to a 10 percent pay raise for the next year. Her 2010 base pay was $50,000. Which of the following applies to 2013?

What is the philosophy behind the Scanlon Plan?

Approximately 50 percent of Canadian companies offer some form of variable pay.

The level of incentives given to executives may depend on their level in the firm.

Because profit-sharing plans often fail to pay off for several years in a row, they can have limited motivational value.

One clear trend in strategic compensation management is the growth of incentive programs for employees throughout the organization.

Which of the following would NOT be a problem with merit raises?

The World of Human Resources Management

Strategy and Human Resources Planning

Equity and Diversity in Human Resources Management

Job Analysis and Work Design

Branding the Talent Pool: Recruitment and Careers

Employee Selection

Training and Development

Performance Management and the Employee Appraisal Process

Managing Compensation

Employee Benefits

Promoting Safety and Health

Employee Rights and Discipline

The Dynamics of Labour Relations

International Human Resources Management

Filters