Question 1

Differentiate between outcome-oriented contracts and behavior-based contracts.

Accepted Answer

To reduce agency costs, the agency theor

Question 2

As jobs become less programmable:

Accepted Answer

A) outcome-oriented contracts become less likely. 
B) monitoring becomes less difficult. 
C) behavior-oriented contracts become less likely. 
D) the agent's risk decreases. 
E) the requirement for compensating wage deferential increases. 
A) outcome-oriented contracts become less likely. 
B) monitoring becomes less difficult. 
C) behavior-oriented contracts become less likely. 
D) the agent's risk decreases. 
E) the requirement for compensating wage deferential increases.

Question 3

The performance motivation of stock option plans is particularly high from a reinforcement theory standpoint.

Accepted Answer

A) True 
 B)False

Question 4

Explain why it is crucial to communicate the reasons for any changes in a compensation system to employees. Describe various ways an organization can communicate these changes.

Accepted Answer

A change in any part of the compensation

Question 5

According to a merit increase grid, one of the factors that determines the size and frequency of pay increases is the _____.

Accepted Answer

A) company's annual output 
B) attrition rate in the company 
C) company's stock price 
D) recruitment ratio 
E) individual's performance rating 
A) company's annual output 
B) attrition rate in the company 
C) company's stock price 
D) recruitment ratio 
E) individual's performance rating

Question 6

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 7

In incentive pay, performance measures are primarily based on _____.

Accepted Answer

A) supervisor's appraisal 
B) individual productivity 
C) company profits 
D) company stock returns 
E) production costs 
A) supervisor's appraisal 
B) individual productivity 
C) company profits 
D) company stock returns 
E) production costs

Question 8

A(n)_____ plan gives employees the opportunity to buy the company's shares at a previously fixed price.

Accepted Answer

A) mutual fund 
B) gainsharing 
C) group incentive 
D) profit sharing 
E) stock option 
A) mutual fund 
B) gainsharing 
C) group incentive 
D) profit sharing 
E) stock option

Question 9

Which of the following is an example of an ownership plan used in compensation systems?

Accepted Answer

A) Gainsharing plans 
B) Profit sharing programs 
C) Group incentives 
D) Stock options 
E) Individual incentive plans 
A) Gainsharing plans 
B) Profit sharing programs 
C) Group incentives 
D) Stock options 
E) Individual incentive plans

Question 10

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 11

An employee's assessment of the fairness of his or her compensation based on how much pay they receive is referred to as procedural fairness.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is most likely to provide intrinsic motivation?

Accepted Answer

A) A sponsored vacation to Europe 
B) A monthly salary of $10,000 
C) Medical insurance 
D) Paid leave for three months 
E) An interesting work assignment 
A) A sponsored vacation to Europe 
B) A monthly salary of $10,000 
C) Medical insurance 
D) Paid leave for three months 
E) An interesting work assignment

Question 13

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 14

A(n)_____ is suitable for an organization with a culture that promotes individual competition.

Accepted Answer

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

Question 15

In skill-based pay systems, performance measures are primarily based on _____.

Accepted Answer

A) supervisor's appraisal 
B) individual productivity 
C) company profits 
D) company stock returns 
E) employees' competency acquisition 
A) supervisor's appraisal 
B) individual productivity 
C) company profits 
D) company stock returns 
E) employees' competency acquisition

Question 16

According to expectancy theory, motivation is hypothesized to be a function of _____.

Accepted Answer

A) cognitive capacity 
B) social structure 
C) genes 
D) instrumentality 
E) self-esteem 
A) cognitive capacity 
B) social structure 
C) genes 
D) instrumentality 
E) self-esteem

Question 17

Which of the following is likely to occur when pay for performance with stronger incentive intensity is replaced with one having a weaker incentive pay?

Accepted Answer

A) Greater motivation for employees in sales, executives, and stock brokers 
B) Motivation for high performers to stay with the organization and improve their efficiency 
C) Greater chance for unintended, undesirable behavior driven by pay-linked incentives 
D) Excessive risk-taking for greater premium and compensation 
E) Competitors possibly winning over high performers with stronger incentive intensity 
A) Greater motivation for employees in sales, executives, and stock brokers 
B) Motivation for high performers to stay with the organization and improve their efficiency 
C) Greater chance for unintended, undesirable behavior driven by pay-linked incentives 
D) Excessive risk-taking for greater premium and compensation 
E) Competitors possibly winning over high performers with stronger incentive intensity

Question 18

One solution to profit-sharing during a downturn is to design plans that have upside but not downside risk.

Accepted Answer

A) True 
 B)False

Question 19

How can executive pay be linked to organization performance?

Accepted Answer

From an agency theory perspective, the g

Question 20

When an organization is using growth strategy, it will _____.

Accepted Answer

A) have pay levels that are below market levels in the short run 
B) have a time orientation that is short term 
C) make centralized pay decisions 
D) not share risks with employees 
E) have benefit levels that are above market levels 
A) have pay levels that are below market levels in the short run 
B) have a time orientation that is short term 
C) make centralized pay decisions 
D) not share risks with employees 
E) have benefit levels that are above market levels

Differentiate between outcome-oriented contracts and behavior-based contracts.

As jobs become less programmable:

The performance motivation of stock option plans is particularly high from a reinforcement theory standpoint.

Explain why it is crucial to communicate the reasons for any changes in a compensation system to employees. Describe various ways an organization can communicate these changes.

According to a merit increase grid, one of the factors that determines the size and frequency of pay increases is the _____.

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

In incentive pay, performance measures are primarily based on _____.

A(n)_____ plan gives employees the opportunity to buy the company's shares at a previously fixed price.

Which of the following is an example of an ownership plan used in compensation systems?

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

An employee's assessment of the fairness of his or her compensation based on how much pay they receive is referred to as procedural fairness.

Which of the following is most likely to provide intrinsic motivation?

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 _____.

A(n)_____ is suitable for an organization with a culture that promotes individual competition.

In skill-based pay systems, performance measures are primarily based on _____.

According to expectancy theory, motivation is hypothesized to be a function of _____.

Which of the following is likely to occur when pay for performance with stronger incentive intensity is replaced with one having a weaker incentive pay?

One solution to profit-sharing during a downturn is to design plans that have upside but not downside risk.

How can executive pay be linked to organization performance?

When an organization is using growth strategy, it will _____.

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

Differentiate between outcome-oriented contracts and behavior-based contracts.

As jobs become less programmable:

The performance motivation of stock option plans is particularly high from a reinforcement theory standpoint.

Explain why it is crucial to communicate the reasons for any changes in a compensation system to employees. Describe various ways an organization can communicate these changes.

According to a merit increase grid, one of the factors that determines the size and frequency of pay increases is the _____.

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

In incentive pay, performance measures are primarily based on _____.

A(n)_____ plan gives employees the opportunity to buy the company's shares at a previously fixed price.

Which of the following is an example of an ownership plan used in compensation systems?

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

An employee's assessment of the fairness of his or her compensation based on how much pay they receive is referred to as procedural fairness.

Which of the following is most likely to provide intrinsic motivation?

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 _____.

A(n)_____ is suitable for an organization with a culture that promotes individual competition.

In skill-based pay systems, performance measures are primarily based on _____.

According to expectancy theory, motivation is hypothesized to be a function of _____.

Which of the following is likely to occur when pay for performance with stronger incentive intensity is replaced with one having a weaker incentive pay?

One solution to profit-sharing during a downturn is to design plans that have upside but not downside risk.

How can executive pay be linked to organization performance?

When an organization is using growth strategy, it will _____.

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