Question 1

Which of the following is true of how agents may differ from principals?

Accepted Answer

A) Agents can diversify the risks more easily. 
B) Agents are more likely to pursue projects with high potential payoffs. 
C) Agents can diversify investments better. 
D) Agents are more averse to risk. 
E) Agents are likely to prefer more emphasis on uncertain incentives than base pay. 
A) Agents can diversify the risks more easily. 
B) Agents are more likely to pursue projects with high potential payoffs. 
C) Agents can diversify investments better. 
D) Agents are more averse to risk. 
E) Agents are likely to prefer more emphasis on uncertain incentives than base pay.

Question 2

Overtime pays better performers more in _____ programs.

Accepted Answer

A) merit pay 
B) profit sharing 
C) gainsharing 
D) skill-based 
E) ownership 
A) merit pay 
B) profit sharing 
C) gainsharing 
D) skill-based 
E) ownership

Question 3

Which of the following is an example of a behavior-oriented contract?

Accepted Answer

A) Stock option 
B) Profit sharing 
C) Commission 
D) Merit pay 
E) Revenue sharing 
A) Stock option 
B) Profit sharing 
C) Commission 
D) Merit pay 
E) Revenue sharing

Question 4

Which of the following makes outcome-oriented contracts less likely to occur?

Accepted Answer

A) Risk aversion among agents 
B) High outcome uncertainty 
C) More programmable jobs 
D) Less measurability of outcomes 
E) Low risk premium in compensations 
A) Risk aversion among agents 
B) High outcome uncertainty 
C) More programmable jobs 
D) Less measurability of outcomes 
E) Low risk premium in compensations

Question 5

Gainsharing can motivate employees as much as individual plans do because:

Accepted Answer

A) it allows more control over the performance measure and the frequency of payouts. 
B) it uses organization-level performance measures. 
C) it involves payouts that are deferred. 
D) it encourages individual-oriented plans than broader goals. 
E) it focuses more on the monetary component than on employee skills. 
A) it allows more control over the performance measure and the frequency of payouts. 
B) it uses organization-level performance measures. 
C) it involves payouts that are deferred. 
D) it encourages individual-oriented plans than broader goals. 
E) it focuses more on the monetary component than on employee skills.

Question 6

Which of the following must a principal do to reduce agency costs?

Accepted Answer

A) Encourage the agent to maximize his/her benefits. 
B) Provide complete autonomy to the agent. 
C) Discourage the agent from pursuing projects with high potential payoffs. 
D) Increase information asymmetry and goal congruence. 
E) Align the agent's interests with the principal's interests. 
A) Encourage the agent to maximize his/her benefits. 
B) Provide complete autonomy to the agent. 
C) Discourage the agent from pursuing projects with high potential payoffs. 
D) Increase information asymmetry and goal congruence. 
E) Align the agent's interests with the principal's interests.

Question 7

Individual incentives are rolled into base pay of employees.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is true of individual incentives?

Accepted Answer

A) They contribute to a more disintegrated workforce. 
B) They are helpful in the pursuit of total quality management objectives. 
C) They encourage employees to go beyond the call of duty. 
D) They reduce the motivation of acquiring multiple skills and proactive problem solving. 
E) They must be continuously earned and re-earned. 
A) They contribute to a more disintegrated workforce. 
B) They are helpful in the pursuit of total quality management objectives. 
C) They encourage employees to go beyond the call of duty. 
D) They reduce the motivation of acquiring multiple skills and proactive problem solving. 
E) They must be continuously earned and re-earned.

Question 9

Employee stock ownership plans (ESOPs)carry significant investment risks for employees.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is a design feature according to which employee contribution programs differ?

Accepted Answer

A) Employees' skills 
B) Type of work 
C) Frequency of payout 
D) Number of employee groups 
E) Company's annual output 
A) Employees' skills 
B) Type of work 
C) Frequency of payout 
D) Number of employee groups 
E) Company's annual output

Question 11

Agency theory is of particular value in compensation management because of its emphasis on the _____ trade-off.

Accepted Answer

A) performance-reward 
B) risk-reward 
C) motivation-reward 
D) ability-reward 
E) behavior-reward 
A) performance-reward 
B) risk-reward 
C) motivation-reward 
D) ability-reward 
E) behavior-reward

Question 12

Gainsharing plans encompass more than just a monetary component.

Accepted Answer

A) True 
 B)False

Question 13

Employee stock ownership plans (ESOPs)give employees the right to vote their securities if registered on a national exchange.

Accepted Answer

A) True 
 B)False

Question 14

By law, what percent of assets must an employee stock ownership plan (ESOP)invest in its company's stock?

Accepted Answer

A) 26 percent 
B) 51 percent 
C) 80 percent 
D) 75 percent 
E) 76 percent 
A) 26 percent 
B) 51 percent 
C) 80 percent 
D) 75 percent 
E) 76 percent

Question 15

A(n)_____ program is based on group or plant performance that does not become part of the employee's base salary.

Accepted Answer

A) merit pay 
B) profit-sharing 
C) stock option 
D) gainsharing 
E) individual incentive 
A) merit pay 
B) profit-sharing 
C) stock option 
D) gainsharing 
E) individual incentive

Question 16

Which of the following is a compensation program that relates costs to the ability to pay?

Accepted Answer

A) Skill-based program 
B) Incentive pay 
C) Fixed pay 
D) Merit pay 
E) Profit sharing 
A) Skill-based program 
B) Incentive pay 
C) Fixed pay 
D) Merit pay 
E) Profit sharing

Question 17

Allan works as a typesetter in a publishing company. If the organization uses merit pay programs, Allan's salary would be based primarily on information collected from _____.

Accepted Answer

A) his colleagues 
B) the human resource manager 
C) his immediate supervisor 
D) Allan himself 
E) performance indicators 
A) his colleagues 
B) the human resource manager 
C) his immediate supervisor 
D) Allan himself 
E) performance indicators

Question 18

Which type of compensation program is most likely to attract learning-oriented employees?

Accepted Answer

A) Skill-based pay 
B) Merit pay 
C) Incentive pay 
D) Gainsharing 
E) Profit sharing 
A) Skill-based pay 
B) Merit pay 
C) Incentive pay 
D) Gainsharing 
E) Profit sharing

Question 19

Deferred profit-sharing plans increase employee motivation.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following makes employee stock ownership plans (ESOPs)less attractive?

Accepted Answer

A) Less diversification of investment risk 
B) Lack of tax and financial advantages 
C) High levels of liquidity 
D) Inability to serve as a takeover defense 
E) Giving employees the right to vote their securities 
A) Less diversification of investment risk 
B) Lack of tax and financial advantages 
C) High levels of liquidity 
D) Inability to serve as a takeover defense 
E) Giving employees the right to vote their securities

Which of the following is true of how agents may differ from principals?

Overtime pays better performers more in _____ programs.

Which of the following is an example of a behavior-oriented contract?

Which of the following makes outcome-oriented contracts less likely to occur?

Gainsharing can motivate employees as much as individual plans do because:

Which of the following must a principal do to reduce agency costs?

Individual incentives are rolled into base pay of employees.

Which of the following is true of individual incentives?

Employee stock ownership plans (ESOPs)carry significant investment risks for employees.

Which of the following is a design feature according to which employee contribution programs differ?

Agency theory is of particular value in compensation management because of its emphasis on the _____ trade-off.

Gainsharing plans encompass more than just a monetary component.

Employee stock ownership plans (ESOPs)give employees the right to vote their securities if registered on a national exchange.

By law, what percent of assets must an employee stock ownership plan (ESOP)invest in its company's stock?

A(n)_____ program is based on group or plant performance that does not become part of the employee's base salary.

Which of the following is a compensation program that relates costs to the ability to pay?

Allan works as a typesetter in a publishing company. If the organization uses merit pay programs, Allan's salary would be based primarily on information collected from _____.

Which type of compensation program is most likely to attract learning-oriented employees?

Deferred profit-sharing plans increase employee motivation.

Which of the following makes employee stock ownership plans (ESOPs)less attractive?

Human Resource Management: Gaining a Competitive Advantage

Strategic Human Resource Management

The Legal Environment: Equal Employment Opportunity and Safety

The Analysis and Design of Work

Human Resource Planning and Recruitment

Selection and Placement

Training

Performance Management

Employee Development

Employee Separation and Retention

Pay Structure Decisions

Employee Benefits

Collective Bargaining and Labor Relations

Managing Human Resources Globally

Strategically Managing the HRM Function

Filters

Exam 12: Recognizing Employee Contributions With Pay

Which of the following is true of how agents may differ from principals?

Overtime pays better performers more in _____ programs.

Which of the following is an example of a behavior-oriented contract?

Which of the following makes outcome-oriented contracts less likely to occur?

Gainsharing can motivate employees as much as individual plans do because:

Which of the following must a principal do to reduce agency costs?

Individual incentives are rolled into base pay of employees.

Which of the following is true of individual incentives?

Employee stock ownership plans (ESOPs)carry significant investment risks for employees.

Which of the following is a design feature according to which employee contribution programs differ?

Agency theory is of particular value in compensation management because of its emphasis on the _____ trade-off.

Gainsharing plans encompass more than just a monetary component.

Employee stock ownership plans (ESOPs)give employees the right to vote their securities if registered on a national exchange.

By law, what percent of assets must an employee stock ownership plan (ESOP)invest in its company's stock?

A(n)_____ program is based on group or plant performance that does not become part of the employee's base salary.

Which of the following is a compensation program that relates costs to the ability to pay?

Allan works as a typesetter in a publishing company. If the organization uses merit pay programs, Allan's salary would be based primarily on information collected from _____.

Which type of compensation program is most likely to attract learning-oriented employees?

Deferred profit-sharing plans increase employee motivation.

Which of the following makes employee stock ownership plans (ESOPs)less attractive?

Human Resource Management: Gaining a Competitive Advantage

Strategic Human Resource Management

The Legal Environment: Equal Employment Opportunity and Safety

The Analysis and Design of Work

Human Resource Planning and Recruitment

Selection and Placement

Training

Performance Management

Employee Development

Employee Separation and Retention

Pay Structure Decisions

Employee Benefits

Collective Bargaining and Labor Relations

Managing Human Resources Globally

Strategically Managing the HRM Function

Filters