Question 1

A manager might decide to move from measuring performance on an individual basis to a team basis if:

Accepted Answer

A)  individual performance can only be evaluated by subjective supervisory ratings 
B)  the tie of pay to individual performance is not critical 
C)  in order to be productive, employees cooperate 
D)  competition among employees is dysfunctional 
E)  any or all of the above conditions exist 
A)  individual performance can only be evaluated by subjective supervisory ratings 
B)  the tie of pay to individual performance is not critical 
C)  in order to be productive, employees cooperate 
D)  competition among employees is dysfunctional 
E)  any or all of the above conditions exist

Question 2

Employee stock ownership plans (ESOPs):

Accepted Answer

A)  are types of broad-based stock ownership plans 
B)  grant shares of stock to employees as a means of long-term savings and retirement 
C)  usually do not link stocks that can be purchased to individual or group performance indicators 
D)  vary in when payments are made 
E)  are accurately described by all of the above 
A)  are types of broad-based stock ownership plans 
B)  grant shares of stock to employees as a means of long-term savings and retirement 
C)  usually do not link stocks that can be purchased to individual or group performance indicators 
D)  vary in when payments are made 
E)  are accurately described by all of the above

Question 3

The design choices for a performance management system include:

Accepted Answer

A)  types of performance pay 
B)  rewards 
C)  performance measures 
D)  linking performance to rewards 
E)  all of the above 
A)  types of performance pay 
B)  rewards 
C)  performance measures 
D)  linking performance to rewards 
E)  all of the above

Question 4

In order for performance-based pay to be used effectively in an organization, it is necessary to:.

Accepted Answer

A)  link performance to outcomes important to management but not necessarily the employee 
B)  develop valid performance measures 
C)  promote a secret pay policy so everyone will work to their maximum 
D)  do away with merit based pay increases 
E)  reduce the cost of benefits so performance based pay can be afforded 
A)  link performance to outcomes important to management but not necessarily the employee 
B)  develop valid performance measures 
C)  promote a secret pay policy so everyone will work to their maximum 
D)  do away with merit based pay increases 
E)  reduce the cost of benefits so performance based pay can be afforded

Question 5

Combined distribution plans:

Accepted Answer

A)  are types of gain-sharing plans 
B)  are devised to relate long-term profitability to top management performance 
C)  distribute a portion of profits immediately to employees, setting the remaining amount aside in a designated account. 
D)  are not as popular as current distribution plans because they lack immediacy 
E)  are accurately described by all of the above 
A)  are types of gain-sharing plans 
B)  are devised to relate long-term profitability to top management performance 
C)  distribute a portion of profits immediately to employees, setting the remaining amount aside in a designated account. 
D)  are not as popular as current distribution plans because they lack immediacy 
E)  are accurately described by all of the above

Question 6

______________ is the form of pay that managers view as the most effective for improving performance.

Accepted Answer

A)  Long-term incentives 
B)  Lump-sum bonuses 
C)  Profit sharing 
D)  Gainsharing 
E)  Team pay 
A)  Long-term incentives 
B)  Lump-sum bonuses 
C)  Profit sharing 
D)  Gainsharing 
E)  Team pay

Question 7

Current distribution plans:

Accepted Answer

A)  place earnings in an escrow account for distribution upon termination, disability, or death 
B)  create retirement funds 
C)  are the fastest growing type of profit sharing plan 
D)  provide a percentage of profits to be distributed quarterly or annually to employees 
E)  are devised to relate short-term profitability to top management performance 
A)  place earnings in an escrow account for distribution upon termination, disability, or death 
B)  create retirement funds 
C)  are the fastest growing type of profit sharing plan 
D)  provide a percentage of profits to be distributed quarterly or annually to employees 
E)  are devised to relate short-term profitability to top management performance

Question 8

Dixie Manufacturing uses a strict merit pay system. Angel is one of 12 assembly line workers in your department, and she has been a good performer for the last nine years. But this year, her performance has been significantly below average. Angel has not mentioned problems at home, but you noticed in the crime section of the local paper that her teenage son was convicted for driving under the influence at New Year's, and in the legal postings you learned she divorced her husband for desertion at Easter. The local paper also carried a story about children with learning disabilities, and you noticed that Angel's youngest daughter was featured. What should Angel's merit raise be this year? Angel's raise should be

Accepted Answer

A)  an average of what she earned in previous years. She is obviously a good employee who is going through a hard time. 
B)  the average raise that everyone else in the department is getting. Otherwise, Angel will get discouraged, and you may lose a good employee. 
C)  a high raise. Angel has higher need for income since her husband deserted her and her family. 
D)  zero. Poor performance cannot justify a raise. 
E)  Under a strict merit raise system, none of the above is a correct response. 
A)  an average of what she earned in previous years. She is obviously a good employee who is going through a hard time. 
B)  the average raise that everyone else in the department is getting. Otherwise, Angel will get discouraged, and you may lose a good employee. 
C)  a high raise. Angel has higher need for income since her husband deserted her and her family. 
D)  zero. Poor performance cannot justify a raise. 
E)  Under a strict merit raise system, none of the above is a correct response.

Question 9

With incentive pay, there is substantial downside risk for employees and there is less upside potential.

Accepted Answer

A) True 
 B)False

Question 10

When tax rates for long-term capital gains are _____ relative to tax rates for ordinary income, stock options become _____ popular.

Accepted Answer

A)  high, more 
B)  low, more 
C)  high, less 
D)  low, less 
E)  none of the above 
A)  high, more 
B)  low, more 
C)  high, less 
D)  low, less 
E)  none of the above

Question 11

Which of the following types of businesses would have the highest labor costs in proportion to other costs?

Accepted Answer

A)  auto parts manufacturer 
B)  Mississippi River barge transport company 
C)  nursing home 
D)  chicken-processing plant 
E)  nuclear energy plant 
A)  auto parts manufacturer 
B)  Mississippi River barge transport company 
C)  nursing home 
D)  chicken-processing plant 
E)  nuclear energy plant

Question 12

With _____, high performers earn more but no permanent adjustment is made to an employee's base pay.

Accepted Answer

A)  incentive pay 
B)  equity pay 
C)  fixed earnings 
D)  retained earnings 
E)  merit pay 
A)  incentive pay 
B)  equity pay 
C)  fixed earnings 
D)  retained earnings 
E)  merit pay

Question 13

The Scanlon Plan

Accepted Answer

A)  is appropriate for use only in startup firms 
B)  focuses only on labor cost savings 
C)  uses complex measures of performance 
D)  was developed during the Industrial Revolution 
E)  All of the above 
A)  is appropriate for use only in startup firms 
B)  focuses only on labor cost savings 
C)  uses complex measures of performance 
D)  was developed during the Industrial Revolution 
E)  All of the above

Question 14

As ranked by the highest percentage of employers, which strategic objective(s) was (were) achieved by short-term bonuses?

Accepted Answer

A)  attracting and retaining top performers 
B)  achieving strategic goals 
C)  aligning participant behavior to business goals 
D)  all of the above 
E)  a and b only 
A)  attracting and retaining top performers 
B)  achieving strategic goals 
C)  aligning participant behavior to business goals 
D)  all of the above 
E)  a and b only

Question 15

Comment on the following statement: The expected outcome of a properly administered performance-based pay system is that it will help the organization achieve its strategic objectives by attracting, retaining, motivating and rewarding employees.

Accepted Answer

Performance-based pay recognizes that pe

Question 16

Which of the following questions need to be answered when an organization is establishing a commission pay program?

Accepted Answer

A)  Can the company afford to do this? 
B)  How do we guarantee everyone receives the same commission payout? 
C)  Are the methods to be used to measure performance flexible enough to allow for any possible sales event? 
D)  To what measures should commissions be tied to curb salespersons' behaviors that could negatively affect the organization? 
E)  Does each salesperson have the same number of accounts? 
A)  Can the company afford to do this? 
B)  How do we guarantee everyone receives the same commission payout? 
C)  Are the methods to be used to measure performance flexible enough to allow for any possible sales event? 
D)  To what measures should commissions be tied to curb salespersons' behaviors that could negatively affect the organization? 
E)  Does each salesperson have the same number of accounts?

Question 17

When a reward is paid in a lump sum, it seems to have more impact than when it is paid out as small additions to employees' weekly or monthly paychecks.

Accepted Answer

A) True 
 B)False

Question 18

Tying performance-based pay to achieving _____ usually improves performance in that area.

Accepted Answer

A)  growth 
B)  profitability 
C)  labor cost savings 
D)  customer service excellence 
E)  all of the above 
A)  growth 
B)  profitability 
C)  labor cost savings 
D)  customer service excellence 
E)  all of the above

Question 19

Deferred distribution plans:

Accepted Answer

A)  are types of gain-sharing plans 
B)  are devised to relate long-term profitability to top management performance 
C)  place earnings in an escrow account for distribution upon retirement, termination, disability, or death 
D)  are not as popular as current distribution plans because they lack immediacy 
E)  are accurately described by all of the above 
A)  are types of gain-sharing plans 
B)  are devised to relate long-term profitability to top management performance 
C)  place earnings in an escrow account for distribution upon retirement, termination, disability, or death 
D)  are not as popular as current distribution plans because they lack immediacy 
E)  are accurately described by all of the above

Question 20

To be effective, performance-based systems must do all of the following except:

Accepted Answer

A)  specify and measure performance 
B)  specify method for linking pay to performance 
C)  specify level of aggregation for reward distribution 
D)  gain employee acceptance 
E)  all of the above are necessary 
A)  specify and measure performance 
B)  specify method for linking pay to performance 
C)  specify level of aggregation for reward distribution 
D)  gain employee acceptance 
E)  all of the above are necessary

A manager might decide to move from measuring performance on an individual basis to a team basis if:

Employee stock ownership plans (ESOPs):

The design choices for a performance management system include:

In order for performance-based pay to be used effectively in an organization, it is necessary to:.

Combined distribution plans:

______________ is the form of pay that managers view as the most effective for improving performance.

Current distribution plans:

With incentive pay, there is substantial downside risk for employees and there is less upside potential.

When tax rates for long-term capital gains are _ relative to tax rates for ordinary income, stock options become _ popular.

Which of the following types of businesses would have the highest labor costs in proportion to other costs?

With _____, high performers earn more but no permanent adjustment is made to an employee's base pay.

The Scanlon Plan

As ranked by the highest percentage of employers, which strategic objective(s) was (were) achieved by short-term bonuses?

Comment on the following statement: The expected outcome of a properly administered performance-based pay system is that it will help the organization achieve its strategic objectives by attracting, retaining, motivating and rewarding employees.

Which of the following questions need to be answered when an organization is establishing a commission pay program?

When a reward is paid in a lump sum, it seems to have more impact than when it is paid out as small additions to employees' weekly or monthly paychecks.

Tying performance-based pay to achieving _____ usually improves performance in that area.

Deferred distribution plans:

To be effective, performance-based systems must do all of the following except:

Managing Human Resources

Understanding the External and Organizational Environments

Ensuring Fair Treatment and Legal Compliance

HR Planning for Alignment and Change

Using Job Analysis and Competency Modeling

Recruiting and Retaining Qualified Employees

Selecting Employees to Fit the Job and the Organization

Training and Developing a Competitive Workforce

Conducting Performance Management

Developing an Approach to Total Compensation

Providing Benefits and Services

Promoting Safety, Health, and Well-Being in the Workplace

Understanding Unionization and Collective Bargaining

Filters

Exam 11: Using Performance-Based Pay to Achieve Strategic Objectives

A manager might decide to move from measuring performance on an individual basis to a team basis if:

Employee stock ownership plans (ESOPs):

The design choices for a performance management system include:

In order for performance-based pay to be used effectively in an organization, it is necessary to:.

Combined distribution plans:

______________ is the form of pay that managers view as the most effective for improving performance.

Current distribution plans:

With incentive pay, there is substantial downside risk for employees and there is less upside potential.

When tax rates for long-term capital gains are _____ relative to tax rates for ordinary income, stock options become _____ popular.

Which of the following types of businesses would have the highest labor costs in proportion to other costs?

With _____, high performers earn more but no permanent adjustment is made to an employee's base pay.

The Scanlon Plan

As ranked by the highest percentage of employers, which strategic objective(s) was (were) achieved by short-term bonuses?

Comment on the following statement: The expected outcome of a properly administered performance-based pay system is that it will help the organization achieve its strategic objectives by attracting, retaining, motivating and rewarding employees.

Which of the following questions need to be answered when an organization is establishing a commission pay program?

When a reward is paid in a lump sum, it seems to have more impact than when it is paid out as small additions to employees' weekly or monthly paychecks.

Tying performance-based pay to achieving _____ usually improves performance in that area.

Deferred distribution plans:

To be effective, performance-based systems must do all of the following except:

Managing Human Resources

Understanding the External and Organizational Environments

Ensuring Fair Treatment and Legal Compliance

HR Planning for Alignment and Change

Using Job Analysis and Competency Modeling

Recruiting and Retaining Qualified Employees

Selecting Employees to Fit the Job and the Organization

Training and Developing a Competitive Workforce

Conducting Performance Management

Developing an Approach to Total Compensation

Providing Benefits and Services

Promoting Safety, Health, and Well-Being in the Workplace

Understanding Unionization and Collective Bargaining

Filters

When tax rates for long-term capital gains are _ relative to tax rates for ordinary income, stock options become _ popular.