Question 1

Which of the following is NOT a financial measure that can be used to judge executive performance?

Accepted Answer

A) return on equity 
B) earnings per share 
C) net income before taxes 
D) market share 
A) return on equity 
B) earnings per share 
C) net income before taxes 
D) market share

Question 2

Rachel, the CEO of a large marketing firm, has been asked to serve on the compensation committee of another large marketing firm. If Rachel agrees to serve, she can accept payment of a large fee.

Accepted Answer

A) True 
 B)False

Question 3

In order to send a clear motivational message, an organization must choose either an individual or an organization-wide pay-for-performance plan, rather than using both simultaneously.

Accepted Answer

A) True 
 B)False

Question 4

Robert is paid by the number of bicycle tires he attaches to wheel rims. If he attaches more than his daily quota of tires, he receives 25 cents extra per extra tire. Under which of the following systems is Robert paid?

Accepted Answer

A) straight piece-rate 
B) Scanlon 
C) production commission 
D) differential piece-rate 
A) straight piece-rate 
B) Scanlon 
C) production commission 
D) differential piece-rate

Question 5

Which of the following is a strategic and financial metric for variable pay plans?

Accepted Answer

A) turnover cost reduction 
B) increase in customer satisfaction levels 
C) increase in market share 
D) return on investment 
A) turnover cost reduction 
B) increase in customer satisfaction levels 
C) increase in market share 
D) return on investment

Question 6

For a profit-sharing plan to be effective, which of the following possible actions must management be willing to take?

Accepted Answer

A) to stabilize profits so that the annual payoff is consistent 
B) to increase innovative solutions to technical problems 
C) to lower expectations of performance impact in the program's first year 
D) to disclose financial and profit information to employees 
A) to stabilize profits so that the annual payoff is consistent 
B) to increase innovative solutions to technical problems 
C) to lower expectations of performance impact in the program's first year 
D) to disclose financial and profit information to employees

Question 7

Which of the following statements best puts into perspective the base salary of the CEO of a large for-profit organization?

Accepted Answer

A) It is typically20 times larger than the salary of the average worker in the organization. 
B) It is typically the largest part of the CEO's total compensation. 
C) It is likely less than half of the CEO's total compensation. 
D) It is often deferred until after the CEO retires. 
A) It is typically20 times larger than the salary of the average worker in the organization. 
B) It is typically the largest part of the CEO's total compensation. 
C) It is likely less than half of the CEO's total compensation. 
D) It is often deferred until after the CEO retires.

Question 8

Perquisites may offer substantial tax savings for executives because some perks are not taxed as income.

Accepted Answer

A) True 
 B)False

Question 9

Unions sometimes oppose profit-sharing plans because such things as accounting decisions made by management can influence the level of profits more than employees' efforts.

Accepted Answer

A) True 
 B)False

Question 10

In the United States, the Sarbanes-Oxley Act of 2002 was triggered, in part, by the corporate scandals at Enron, Tyco, and WorldCom among other firms. The act requires that compensation committees be composed entirely of outsiders to avoid the insider corruption seen in these scandals.

Accepted Answer

A) True 
 B)False

Question 11

The traditional measure of sales performance is individual sales revenue against established quotas.

Accepted Answer

A) True 
 B)False

Question 12

What must an organizational incentive program do in order to be effective?

Accepted Answer

A) include everyone from non-exempt employees to managers and executives 
B) reward the shareholders for investing in the business 
C) pay out every year regardless of whether the organization is profitable 
D) give higher rewards to employees whose individual efforts are outstanding 
A) include everyone from non-exempt employees to managers and executives 
B) reward the shareholders for investing in the business 
C) pay out every year regardless of whether the organization is profitable 
D) give higher rewards to employees whose individual efforts are outstanding

Question 13

Bernard is upset when he learns that the company is changing to a pay-for-performance system where lump-sum bonuses instead of raises will be used. The system will record the performance of each work team and reward everyone on the team equally. Which of the following is a reason for Bernard changing his mind about the system?

Accepted Answer

A) Bernard's base pay will be essentially frozen. 
B) The pay-for-performance plan is phrased in vague, technical terms. 
C) Bernard is the highest individual performer on his team. 
D) Bernard is a low to average performer on his work team. 
A) Bernard's base pay will be essentially frozen. 
B) The pay-for-performance plan is phrased in vague, technical terms. 
C) Bernard is the highest individual performer on his team. 
D) Bernard is a low to average performer on his work team.

Question 14

ESOPs are popular among employees because they reliably provide increased financial security in retirement.

Accepted Answer

A) True 
 B)False

Question 15

Caroline works on a design team that develops costumes for historically based and fantasy-based movies. The team's designs are executed by professional seamstresses and tailors. In terms of measuring performance, which statement provides the best assessment of Caroline's job?

Accepted Answer

A) Her job would be suited for individual pay for performance because one can objectively judge the artistic merits of the costumes. 
B) Her job is ill suited for pay for performance because the work product of the team is mostly based on subjective judgment. 
C) Individual performance can be isolated and measured separately from her team members' contributions. 
D) Individual performance can be measured by the number of design drawings she produces, and her pay could effectively be tied to this number. 
A) Her job would be suited for individual pay for performance because one can objectively judge the artistic merits of the costumes. 
B) Her job is ill suited for pay for performance because the work product of the team is mostly based on subjective judgment. 
C) Individual performance can be isolated and measured separately from her team members' contributions. 
D) Individual performance can be measured by the number of design drawings she produces, and her pay could effectively be tied to this number.

Question 16

Poseidon Marine Supply has introduced a new sales compensation system that rewards sales staff based on a combination of individual goals and group sales goals. In implementing this program, what does the management of Poseidon probably hope to do?

Accepted Answer

A) encourage teamwork among the sales staff 
B) increase the amount of service to existing Poseidon customers 
C) eliminate opportunities for unethical behaviour by sales staff 
D) motivate sales staff based on individual entrepreneurialism 
A) encourage teamwork among the sales staff 
B) increase the amount of service to existing Poseidon customers 
C) eliminate opportunities for unethical behaviour by sales staff 
D) motivate sales staff based on individual entrepreneurialism

Question 17

Each Scanlon plan is unique to the organization and is created by a team of managers.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following ideas is at the heart of most executive compensation plans?

Accepted Answer

A) Executives are more focused on their base compensation than they are on the variable pay. 
B) Executive compensation should be focused on the organization's current performance in the stock market. 
C) Executives should be rewarded if the organization grows in profitability and value over a period of years. 
D) Executives view status and image as important as compensation. 
A) Executives are more focused on their base compensation than they are on the variable pay. 
B) Executive compensation should be focused on the organization's current performance in the stock market. 
C) Executives should be rewarded if the organization grows in profitability and value over a period of years. 
D) Executives view status and image as important as compensation.

Question 19

Which of the following does NOT represent a common measure of sales effectiveness?

Accepted Answer

A) new product sales 
B) sales relative to quota 
C) sales staff satisfaction 
D) account retention 
A) new product sales 
B) sales relative to quota 
C) sales staff satisfaction 
D) account retention

Question 20

Consider why it is important for the employer to ensure that what it rewards is tied to organizational objectives. Which of the following indicates what employees tend to do?

Accepted Answer

A) avoid doing unpleasant tasks 
B) produce what is convenient 
C) produce what is measured and rewarded 
D) guess what they think management wants done 
A) avoid doing unpleasant tasks 
B) produce what is convenient 
C) produce what is measured and rewarded 
D) guess what they think management wants done

Which of the following is NOT a financial measure that can be used to judge executive performance?

Rachel, the CEO of a large marketing firm, has been asked to serve on the compensation committee of another large marketing firm. If Rachel agrees to serve, she can accept payment of a large fee.

In order to send a clear motivational message, an organization must choose either an individual or an organization-wide pay-for-performance plan, rather than using both simultaneously.

Robert is paid by the number of bicycle tires he attaches to wheel rims. If he attaches more than his daily quota of tires, he receives 25 cents extra per extra tire. Under which of the following systems is Robert paid?

Which of the following is a strategic and financial metric for variable pay plans?

For a profit-sharing plan to be effective, which of the following possible actions must management be willing to take?

Which of the following statements best puts into perspective the base salary of the CEO of a large for-profit organization?

Perquisites may offer substantial tax savings for executives because some perks are not taxed as income.

Unions sometimes oppose profit-sharing plans because such things as accounting decisions made by management can influence the level of profits more than employees' efforts.

In the United States, the Sarbanes-Oxley Act of 2002 was triggered, in part, by the corporate scandals at Enron, Tyco, and WorldCom among other firms. The act requires that compensation committees be composed entirely of outsiders to avoid the insider corruption seen in these scandals.

The traditional measure of sales performance is individual sales revenue against established quotas.

What must an organizational incentive program do in order to be effective?

ESOPs are popular among employees because they reliably provide increased financial security in retirement.

Caroline works on a design team that develops costumes for historically based and fantasy-based movies. The team's designs are executed by professional seamstresses and tailors. In terms of measuring performance, which statement provides the best assessment of Caroline's job?

Poseidon Marine Supply has introduced a new sales compensation system that rewards sales staff based on a combination of individual goals and group sales goals. In implementing this program, what does the management of Poseidon probably hope to do?

Each Scanlon plan is unique to the organization and is created by a team of managers.

Which of the following ideas is at the heart of most executive compensation plans?

Which of the following does NOT represent a common measure of sales effectiveness?

Consider why it is important for the employer to ensure that what it rewards is tied to organizational objectives. Which of the following indicates what employees tend to do?

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

Which of the following is NOT a financial measure that can be used to judge executive performance?

Rachel, the CEO of a large marketing firm, has been asked to serve on the compensation committee of another large marketing firm. If Rachel agrees to serve, she can accept payment of a large fee.

In order to send a clear motivational message, an organization must choose either an individual or an organization-wide pay-for-performance plan, rather than using both simultaneously.

Robert is paid by the number of bicycle tires he attaches to wheel rims. If he attaches more than his daily quota of tires, he receives 25 cents extra per extra tire. Under which of the following systems is Robert paid?

Which of the following is a strategic and financial metric for variable pay plans?

For a profit-sharing plan to be effective, which of the following possible actions must management be willing to take?

Which of the following statements best puts into perspective the base salary of the CEO of a large for-profit organization?

Perquisites may offer substantial tax savings for executives because some perks are not taxed as income.

Unions sometimes oppose profit-sharing plans because such things as accounting decisions made by management can influence the level of profits more than employees' efforts.

In the United States, the Sarbanes-Oxley Act of 2002 was triggered, in part, by the corporate scandals at Enron, Tyco, and WorldCom among other firms. The act requires that compensation committees be composed entirely of outsiders to avoid the insider corruption seen in these scandals.

The traditional measure of sales performance is individual sales revenue against established quotas.

What must an organizational incentive program do in order to be effective?

ESOPs are popular among employees because they reliably provide increased financial security in retirement.

Caroline works on a design team that develops costumes for historically based and fantasy-based movies. The team's designs are executed by professional seamstresses and tailors. In terms of measuring performance, which statement provides the best assessment of Caroline's job?

Poseidon Marine Supply has introduced a new sales compensation system that rewards sales staff based on a combination of individual goals and group sales goals. In implementing this program, what does the management of Poseidon probably hope to do?

Each Scanlon plan is unique to the organization and is created by a team of managers.

Which of the following ideas is at the heart of most executive compensation plans?

Which of the following does NOT represent a common measure of sales effectiveness?

Consider why it is important for the employer to ensure that what it rewards is tied to organizational objectives. Which of the following indicates what employees tend to do?

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