Question 1

Organizational incentive systems have several objectives. Which option does NOT represent a primary objective?

Accepted Answer

A) increasing productivity 
B) enhancing employee morale 
C) attracting and retaining employees 
D) promoting employee innovation 
A) increasing productivity 
B) enhancing employee morale 
C) attracting and retaining employees 
D) promoting employee innovation D

Question 2

For profit sharing to work, management must be willing to disclose financial and profit information to the employees.

Accepted Answer

A) True 
 B)False  True

Question 3

Many companies have introduced team-based incentives, finding that teams are eager to handle pay decisions for co-workers.

Accepted Answer

A) True 
 B)False  False

Question 4

Which kind of effort are gainsharing plans designed to elicit from employees?

Accepted Answer

A) maximum possible 
B) satisfactory 
C) minimum acceptable 
D) sustainable 
A) maximum possible 
B) satisfactory 
C) minimum acceptable 
D) sustainable

Question 5

Which of these characteristics would work against developing effective individual incentive plans?

Accepted Answer

A) The organization puts an emphasis on teamwork. 
B) Individual employee performances can be identified. 
C) Employee growth and achievement are emphasized in the organizational culture. 
D) Independent work is performed by employees. 
A) The organization puts an emphasis on teamwork. 
B) Individual employee performances can be identified. 
C) Employee growth and achievement are emphasized in the organizational culture. 
D) Independent work is performed by employees.

Question 6

When Claudette found a flaw in a major outgoing order and corrected it before it was shipped, her boss gave her two vouchers to the best steak house in town. What is this type of incentive called?

Accepted Answer

A) a spot bonus 
B) a surprise award 
C) immediate payout 
D) a spontaneous reward 
A) a spot bonus 
B) a surprise award 
C) immediate payout 
D) a spontaneous reward

Question 7

Regarding benefits, which of the following statements describes the pattern that applies most to executives?

Accepted Answer

A) They often have health plans with no co-payments and no limitations on deductibles. 
B) They typically have the same health benefits plans that other employees have. 
C) They typically pay higher deductibles on their health-care plans than do other employees. 
D) They usually "self-insure" for their health care. 
A) They often have health plans with no co-payments and no limitations on deductibles. 
B) They typically have the same health benefits plans that other employees have. 
C) They typically pay higher deductibles on their health-care plans than do other employees. 
D) They usually "self-insure" for their health care.

Question 8

Which of the following statements best explains why bonuses are less costly to the organization than general wage increases?

Accepted Answer

A) Bonuses receive preferential tax treatment. 
B) The annual amount given as a bonus tends to be smaller than the annual amount given as a raise. 
C) Bonuses are frequently given in the form of non-cash items. 
D) Bonuses do not become part of employees' base wages. 
A) Bonuses receive preferential tax treatment. 
B) The annual amount given as a bonus tends to be smaller than the annual amount given as a raise. 
C) Bonuses are frequently given in the form of non-cash items. 
D) Bonuses do not become part of employees' base wages.

Question 9

The CEO of a major corporation is being interviewed by a reporter from a TV news show. The CEO makes over $50 million a year. The TV reporter asks, "Are you really worth $50 million a year to your company?" All but one of the following are plausible responses to the reporter's question. Which response is the CEO unlikely to make?

Accepted Answer

A) "I don't make as much as Julia Roberts does." 
B) "Just like professional athletes, corporate executives have limited top earning years." 
C) "I am in charge of the company, and I am responsible for the results." 
D) "I have to make major decisions, and I work endless hours under great pressure." 
A) "I don't make as much as Julia Roberts does." 
B) "Just like professional athletes, corporate executives have limited top earning years." 
C) "I am in charge of the company, and I am responsible for the results." 
D) "I have to make major decisions, and I work endless hours under great pressure."

Question 10

What conditions are necessary for group or team incentives to be successful?

Accepted Answer

Group or team incentives must meet the f

Question 11

A straight-commission approach is best when an organization emphasizes servicing and retaining existing accounts over generating new sales and accounts.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following outlines the usual composition of the compensation committee?

Accepted Answer

A) a subgroup of the board of directors, including officers of the firm 
B) a subgroup of the board of directors who are not officers of the firm 
C) compensation consultants without executive management involvement 
D) executives from other companies who serve on a committee that is separate from the board of directors, but which reports to it 
A) a subgroup of the board of directors, including officers of the firm 
B) a subgroup of the board of directors who are not officers of the firm 
C) compensation consultants without executive management involvement 
D) executives from other companies who serve on a committee that is separate from the board of directors, but which reports to it

Question 13

Which of the following is an assumption of variable pay systems?

Accepted Answer

A) Time spent each day is the primary measure of short-term contributions. 
B) Some jobs contribute more to organizational success than others do. 
C) Equality and equity in pay are both strong motivators of employee performance. 
D) Length of time with the organization is the primary differentiating factor in employee performance levels. 
A) Time spent each day is the primary measure of short-term contributions. 
B) Some jobs contribute more to organizational success than others do. 
C) Equality and equity in pay are both strong motivators of employee performance. 
D) Length of time with the organization is the primary differentiating factor in employee performance levels.

Question 14

Andrew is excited about the new program at work. He will be allowed to purchase 20 shares of stock at $45 per share for a limited period. Andrew has chosen to take advantage of this plan because he expects that the market price of the stock will exceed $45. Which kind of plan is it?

Accepted Answer

A) stock option 
B) gainsharing 
C) employee stock ownership (ESOP) 
D) windfall incentive 
A) stock option 
B) gainsharing 
C) employee stock ownership (ESOP) 
D) windfall incentive

Question 15

Enron, WorldCom, Tyco, and other companies underwent executive compensation scandals. Which of the following were mainly subject to abuse?

Accepted Answer

A) stock options 
B) executive perks 
C) deferred compensation 
D) ESOPs 
A) stock options 
B) executive perks 
C) deferred compensation 
D) ESOPs

Question 16

Which of the following types of pay-for-performance systems is most likely to induce employees to behave unethically?

Accepted Answer

A) gainsharing 
B) ESOP 
C) performance awards 
D) commission 
A) gainsharing 
B) ESOP 
C) performance awards 
D) commission

Question 17

Why do organizations offer deferred compensation to executives?

Accepted Answer

A) to emphasize long-term performance of the organization 
B) to hide excessive one-time bonuses earned by executives. 
C) to help executives with tax liabilities caused by incentive plans 
D) to place "golden handcuffs" on key executives so they won't leave prematurely 
A) to emphasize long-term performance of the organization 
B) to hide excessive one-time bonuses earned by executives. 
C) to help executives with tax liabilities caused by incentive plans 
D) to place "golden handcuffs" on key executives so they won't leave prematurely

Question 18

The advantage of Improshare, as a gainsharing program, is that it takes into account multiple factors such as prices, client satisfaction, and revenue volume.

Accepted Answer

A) True 
 B)False

Question 19

What is the role of a compensation committee of the board of directors?

Accepted Answer

A) to make recommendations to the board of directors on overall pay policies, salaries for top officers, stock options, and additional perks for executives 
B) to develop a compensation package that ties the organization's overall compensation system to the organization's goals and objectives 
C) to assist the HR unit in developing overall pay and benefit programs for the organization 
D) to make recommendations to the shareholders on the compensation formula for members of the board of directors 
A) to make recommendations to the board of directors on overall pay policies, salaries for top officers, stock options, and additional perks for executives 
B) to develop a compensation package that ties the organization's overall compensation system to the organization's goals and objectives 
C) to assist the HR unit in developing overall pay and benefit programs for the organization 
D) to make recommendations to the shareholders on the compensation formula for members of the board of directors

Question 20

Which of the following is a recognized downside of bonuses?

Accepted Answer

A) Employees who are passed over may become jealous of bonus recipients. 
B) Bonuses are too trivial in amount to motivate exceptional behaviour. 
C) A well-implemented bonus system may cost the firm more than base pay raises for improved performance. 
D) They may cause low-performing employees to quit. 
A) Employees who are passed over may become jealous of bonus recipients. 
B) Bonuses are too trivial in amount to motivate exceptional behaviour. 
C) A well-implemented bonus system may cost the firm more than base pay raises for improved performance. 
D) They may cause low-performing employees to quit.

Organizational incentive systems have several objectives. Which option does NOT represent a primary objective?

For profit sharing to work, management must be willing to disclose financial and profit information to the employees.

Many companies have introduced team-based incentives, finding that teams are eager to handle pay decisions for co-workers.

Which kind of effort are gainsharing plans designed to elicit from employees?

Which of these characteristics would work against developing effective individual incentive plans?

When Claudette found a flaw in a major outgoing order and corrected it before it was shipped, her boss gave her two vouchers to the best steak house in town. What is this type of incentive called?

Regarding benefits, which of the following statements describes the pattern that applies most to executives?

Which of the following statements best explains why bonuses are less costly to the organization than general wage increases?

What conditions are necessary for group or team incentives to be successful?

A straight-commission approach is best when an organization emphasizes servicing and retaining existing accounts over generating new sales and accounts.

Which of the following outlines the usual composition of the compensation committee?

Which of the following is an assumption of variable pay systems?

Andrew is excited about the new program at work. He will be allowed to purchase 20 shares of stock at $45 per share for a limited period. Andrew has chosen to take advantage of this plan because he expects that the market price of the stock will exceed $45. Which kind of plan is it?

Enron, WorldCom, Tyco, and other companies underwent executive compensation scandals. Which of the following were mainly subject to abuse?

Which of the following types of pay-for-performance systems is most likely to induce employees to behave unethically?

Why do organizations offer deferred compensation to executives?

The advantage of Improshare, as a gainsharing program, is that it takes into account multiple factors such as prices, client satisfaction, and revenue volume.

What is the role of a compensation committee of the board of directors?

Which of the following is a recognized downside of bonuses?

Changing Nature of Human Resources Management

Strategic HR Management and Planning

Legal Environment of Equal Employment and Diversity

Redefining Jobs and Job Analysis

Recruiting in Labour Markets

Selection of Human Resources

Training Human Resources

Talent Management and Development

Performance Management and Appraisal

Compensation Strategies and Practices

Managing Employee Benefits

Health, Safety, and Security and Risk Management

Employee Rights and Discipline

Unionmanagement Relations

Filters

Exam 11: Variable Pay and Executive Compensation

Organizational incentive systems have several objectives. Which option does NOT represent a primary objective?

For profit sharing to work, management must be willing to disclose financial and profit information to the employees.

Many companies have introduced team-based incentives, finding that teams are eager to handle pay decisions for co-workers.

Which kind of effort are gainsharing plans designed to elicit from employees?

Which of these characteristics would work against developing effective individual incentive plans?

When Claudette found a flaw in a major outgoing order and corrected it before it was shipped, her boss gave her two vouchers to the best steak house in town. What is this type of incentive called?

Regarding benefits, which of the following statements describes the pattern that applies most to executives?

Which of the following statements best explains why bonuses are less costly to the organization than general wage increases?

What conditions are necessary for group or team incentives to be successful?

A straight-commission approach is best when an organization emphasizes servicing and retaining existing accounts over generating new sales and accounts.

Which of the following outlines the usual composition of the compensation committee?

Which of the following is an assumption of variable pay systems?

Andrew is excited about the new program at work. He will be allowed to purchase 20 shares of stock at $45 per share for a limited period. Andrew has chosen to take advantage of this plan because he expects that the market price of the stock will exceed $45. Which kind of plan is it?

Enron, WorldCom, Tyco, and other companies underwent executive compensation scandals. Which of the following were mainly subject to abuse?

Which of the following types of pay-for-performance systems is most likely to induce employees to behave unethically?

Why do organizations offer deferred compensation to executives?

The advantage of Improshare, as a gainsharing program, is that it takes into account multiple factors such as prices, client satisfaction, and revenue volume.

What is the role of a compensation committee of the board of directors?

Which of the following is a recognized downside of bonuses?

Changing Nature of Human Resources Management

Strategic HR Management and Planning

Legal Environment of Equal Employment and Diversity

Redefining Jobs and Job Analysis

Recruiting in Labour Markets

Selection of Human Resources

Training Human Resources

Talent Management and Development

Performance Management and Appraisal

Compensation Strategies and Practices

Managing Employee Benefits

Health, Safety, and Security and Risk Management

Employee Rights and Discipline

Unionmanagement Relations

Filters