Question 1

Balanced scorecards refer to the use of operational yardsticks as well as traditional financial measures as a basis for computing executive pay.

Accepted Answer

A) True 
 B)False  True

Question 2

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

Accepted Answer

A) True 
 B)False  True

Question 3

A merit raise is a form of bonus that is given to an employee beyond their base wage.

Accepted Answer

A) True 
 B)False  False

Question 4

Why are performance measures vital in incentive plans?

Accepted Answer

A)  because they communicate the importance of the organizational goals 
B)  because they ensure fair pay for women 
C)  because they drive profitability 
D)  because they are fair and equitable 
A)  because they communicate the importance of the organizational goals 
B)  because they ensure fair pay for women 
C)  because they drive profitability 
D)  because they are fair and equitable

Question 5

Straight commission plans may induce salespeople to grant price concessions.

Accepted Answer

A) True 
 B)False

Question 6

Briefly discuss three individual incentive plans. (Students should discuss three of the four following plans.)

Accepted Answer

Piecework is one of the oldest incentive

Question 7

ESOPs have been criticized because of potential inabilities to pay back the stock of employees when they retire.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is NOT a reason given by organizations for implementing incentive plans?

Accepted Answer

A)  to improve or maintain high levels of productivity 
B)  to focus employee efforts on specific performance targets 
C)  to link compensation rewards to the achievement of results 
D)  to increase employee benefits 
A)  to improve or maintain high levels of productivity 
B)  to focus employee efforts on specific performance targets 
C)  to link compensation rewards to the achievement of results 
D)  to increase employee benefits

Question 9

Under a straight piecework plan, five minutes is the standard time to produce one unit. The employee's hourly rate is $7.50. The piece rate is $1.50 per unit.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is NOT likely to help an incentive plan succeed in an organization?

Accepted Answer

A)  identifying important organizational metrics that encourage employee behaviour 
B)  involve employees-incentive programs should seem fair to employees 
C)  finding the right incentive payout 
D)  ensuring that employees believe that performance standards are unachievable 
A)  identifying important organizational metrics that encourage employee behaviour 
B)  involve employees-incentive programs should seem fair to employees 
C)  finding the right incentive payout 
D)  ensuring that employees believe that performance standards are unachievable

Question 11

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 12

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 13

Which of the following is an advantages of piece rate pay systems?

Accepted Answer

A)  They allow for teamwork. 
B)  They have a direct link to performance. 
C)  They help to groom better managers. 
D)  They allow employees to break down their work piece by piece. 
A)  They allow for teamwork. 
B)  They have a direct link to performance. 
C)  They help to groom better managers. 
D)  They allow employees to break down their work piece by piece.

Question 14

Saturn, the auto firm, has a sales incentive plan that permits salespeople to be paid for performing various duties not reflected immediately in their sales volume. What is this type of pay plan?

Accepted Answer

A)  a merit plan 
B)  a straight salary plan 
C)  lump-sum merit pay 
D)  a standard hour plan 
A)  a merit plan 
B)  a straight salary plan 
C)  lump-sum merit pay 
D)  a standard hour plan

Question 15

In most profit-sharing plans, about 20 to 25 percent of net profits are shared with employees.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is NOT a weakness of profit-sharing plans?

Accepted Answer

A)  They cause intense competition at the individual employee level. 
B)  Profits shared may be affected by external economic factors. 
C)  The line of sight between reward and individual performance is weak. 
D)  The performance of other firms on the stock market may affect profits. 
A)  They cause intense competition at the individual employee level. 
B)  Profits shared may be affected by external economic factors. 
C)  The line of sight between reward and individual performance is weak. 
D)  The performance of other firms on the stock market may affect profits.

Question 17

Incentive plans are not effective in service and government organizations because of the difficulty in measuring productivity.

Accepted Answer

A) True 
 B)False

Question 18

A weakness of profit-sharing plans is that employees do not have total control over the profitability of the organization.

Accepted Answer

A) True 
 B)False

Question 19

The most important lesson learned from Scanlon and Improshare plans is that if management wants to gain the cooperation of its employees in improving efficiency, they must permit the employees to become involved psychologically as well as financially in the organization.

Accepted Answer

A) True 
 B)False

Question 20

Given that the CEO is the chief executive and decides on most, if not all, major decisions of the firm, who usually sets his or her pay?

Accepted Answer

A)  the vice-presidents or the second level of executives under the CEOs 
B)  the shareholders of the firm 
C)  the unions through collective bargaining 
D)  a compensation committee 
A)  the vice-presidents or the second level of executives under the CEOs 
B)  the shareholders of the firm 
C)  the unions through collective bargaining 
D)  a compensation committee

Balanced scorecards refer to the use of operational yardsticks as well as traditional financial measures as a basis for computing executive pay.

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

A merit raise is a form of bonus that is given to an employee beyond their base wage.

Why are performance measures vital in incentive plans?

Straight commission plans may induce salespeople to grant price concessions.

Briefly discuss three individual incentive plans. (Students should discuss three of the four following plans.)

ESOPs have been criticized because of potential inabilities to pay back the stock of employees when they retire.

Which of the following is NOT a reason given by organizations for implementing incentive plans?

Under a straight piecework plan, five minutes is the standard time to produce one unit. The employee's hourly rate is $7.50. The piece rate is $1.50 per unit.

Which of the following is NOT likely to help an incentive plan succeed in an organization?

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).

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

Which of the following is an advantages of piece rate pay systems?

Saturn, the auto firm, has a sales incentive plan that permits salespeople to be paid for performing various duties not reflected immediately in their sales volume. What is this type of pay plan?

In most profit-sharing plans, about 20 to 25 percent of net profits are shared with employees.

Which of the following is NOT a weakness of profit-sharing plans?

Incentive plans are not effective in service and government organizations because of the difficulty in measuring productivity.

A weakness of profit-sharing plans is that employees do not have total control over the profitability of the organization.

The most important lesson learned from Scanlon and Improshare plans is that if management wants to gain the cooperation of its employees in improving efficiency, they must permit the employees to become involved psychologically as well as financially in the organization.

Given that the CEO is the chief executive and decides on most, if not all, major decisions of the firm, who usually sets his or her pay?

The World of Human Resources Management

Strategy and Human Resources Planning

Equity and Diversity in Human Resources Management

Job Analysis, Employee Involvement, and Flexible Work Schedules

Expanding the Talent Pool: Recruitment and Careers

Employee Selection

Training and Development

Appraising and Improving Performance

Managing Compensation

Employee Benefits

Safety and Health

Employee Rights and Discipline

The Dynamics of Labour Relations

International Human Resources Management

Creating High Performance Work Systems

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Exam 10: Pay For Performance: Incentive Rewards

Balanced scorecards refer to the use of operational yardsticks as well as traditional financial measures as a basis for computing executive pay.

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

A merit raise is a form of bonus that is given to an employee beyond their base wage.

Why are performance measures vital in incentive plans?

Straight commission plans may induce salespeople to grant price concessions.

Briefly discuss three individual incentive plans. (Students should discuss three of the four following plans.)

ESOPs have been criticized because of potential inabilities to pay back the stock of employees when they retire.

Which of the following is NOT a reason given by organizations for implementing incentive plans?

Under a straight piecework plan, five minutes is the standard time to produce one unit. The employee's hourly rate is $7.50. The piece rate is $1.50 per unit.

Which of the following is NOT likely to help an incentive plan succeed in an organization?

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).

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

Which of the following is an advantages of piece rate pay systems?

Saturn, the auto firm, has a sales incentive plan that permits salespeople to be paid for performing various duties not reflected immediately in their sales volume. What is this type of pay plan?

In most profit-sharing plans, about 20 to 25 percent of net profits are shared with employees.

Which of the following is NOT a weakness of profit-sharing plans?

Incentive plans are not effective in service and government organizations because of the difficulty in measuring productivity.

A weakness of profit-sharing plans is that employees do not have total control over the profitability of the organization.

The most important lesson learned from Scanlon and Improshare plans is that if management wants to gain the cooperation of its employees in improving efficiency, they must permit the employees to become involved psychologically as well as financially in the organization.

Given that the CEO is the chief executive and decides on most, if not all, major decisions of the firm, who usually sets his or her pay?

The World of Human Resources Management

Strategy and Human Resources Planning

Equity and Diversity in Human Resources Management

Job Analysis, Employee Involvement, and Flexible Work Schedules

Expanding the Talent Pool: Recruitment and Careers

Employee Selection

Training and Development

Appraising and Improving Performance

Managing Compensation

Employee Benefits

Safety and Health

Employee Rights and Discipline

The Dynamics of Labour Relations

International Human Resources Management

Creating High Performance Work Systems

Filters