Question 1

Merit pay systems rely on 360-degree performance feedback.

Accepted Answer

A) True 
 B)False

Question 2

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 3

Perceptions of inequity may cause employees to take actions that may not help the organization.

Accepted Answer

A) True 
 B)False

Question 4

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 5

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 6

Which of the following is a criticism of traditional merit pay programs?

Accepted Answer

A) Peer and subordinate ratings are frequent and they tend to receive more weight than supervisory ratings. 
B) The feedback under this system tends to occur too frequently, which may cause average employees to feel more discouraged than appreciated. 
C) The program lacks emphasis on individual performance and focuses too much on teamwork. 
D) The program often involves gathering inappropriate feedback from external sources. 
E) Employees are encouraged to focus on personal gains than what is good for the organization. 
A) Peer and subordinate ratings are frequent and they tend to receive more weight than supervisory ratings. 
B) The feedback under this system tends to occur too frequently, which may cause average employees to feel more discouraged than appreciated. 
C) The program lacks emphasis on individual performance and focuses too much on teamwork. 
D) The program often involves gathering inappropriate feedback from external sources. 
E) Employees are encouraged to focus on personal gains than what is good for the organization.

Question 7

Discuss the organization strategies of concentration and growth and how they influence pay dimensions.

Accepted Answer

Growth strategies emphasize innovation,

Question 8

The flow of feedback tends to be multi-directional in merit pay programs.

Accepted Answer

A) True 
 B)False

Question 9

Why is it useful for organizations to think in terms of designing a mix of programs rather than choosing one overall compensation program? Give examples.

Accepted Answer

Every pay program has its advantages and

Question 10

Which of the following is true about outcome-oriented contracts?

Accepted Answer

A) They require more supervision than behavior-oriented contracts. 
B) When profits drop, agent's compensation goes up in outcome-oriented contracts. 
C) Agents do not demand compensating wage differentials in such contracts. 
D) Agents face minimal risks in such contracts. 
E) They are typically a major component of executive compensation. 
A) They require more supervision than behavior-oriented contracts. 
B) When profits drop, agent's compensation goes up in outcome-oriented contracts. 
C) Agents do not demand compensating wage differentials in such contracts. 
D) Agents face minimal risks in such contracts. 
E) They are typically a major component of executive compensation.

Question 11

According to the agency theory, the principals are the _____.

Accepted Answer

A) managers 
B) customers 
C) owners 
D) vendors 
E) employees 
A) managers 
B) customers 
C) owners 
D) vendors 
E) employees

Question 12

E. L. Thorndike's Law of Effect states that _____.

Accepted Answer

A)  a response followed by a reward is more likely to recur in the future 
B)  behavior is a function of ability and knowledge 
C)  valence of pay outcomes should vary under different pay systems 
D)  monetary incentives increase intrinsic motivation 
E)  principals have perfect information on the degree to which an agent is pursuing goals 
A)  a response followed by a reward is more likely to recur in the future 
B)  behavior is a function of ability and knowledge 
C)  valence of pay outcomes should vary under different pay systems 
D)  monetary incentives increase intrinsic motivation 
E)  principals have perfect information on the degree to which an agent is pursuing goals

Question 13

Discuss the expectancy theory.

Accepted Answer

Although expectancy theory focuses on th

Question 14

Which of the following is a compensation program that would best support an organizational culture of cooperation and problem solving?

Accepted Answer

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

Question 15

One way of achieving employee ownership is through stock options, which give employees the opportunity to buy stock at a fixed price.

Accepted Answer

A) True 
 B)False

Question 16

Performing interesting work is an example of an extrinsic reward.

Accepted Answer

A) True 
 B)False

Question 17

Relying exclusively on merit pay or individual incentives may result in high levels of work motivation but unacceptable levels of individualistic and competitive behavior.

Accepted Answer

A) True 
 B)False

Question 18

Separating the functions of principals and agents is likely to result in:

Accepted Answer

A) immobility of financial capital. 
B) diversification of investment risk. 
C) reduction in agency costs. 
D) better goal congruence. 
E) information symmetry. 
A) immobility of financial capital. 
B) diversification of investment risk. 
C) reduction in agency costs. 
D) better goal congruence. 
E) information symmetry.

Question 19

In merit pay systems, performance is measured based on supervisor's rating.

Accepted Answer

A) True 
 B)False

Question 20

Merit pay has the ability to define and reward a broad range of performance dimensions.

Accepted Answer

A) True 
 B)False

Merit pay systems rely on 360-degree performance feedback.

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

Perceptions of inequity may cause employees to take actions that may not help the organization.

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

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

Which of the following is a criticism of traditional merit pay programs?

Discuss the organization strategies of concentration and growth and how they influence pay dimensions.

The flow of feedback tends to be multi-directional in merit pay programs.

Why is it useful for organizations to think in terms of designing a mix of programs rather than choosing one overall compensation program? Give examples.

Which of the following is true about outcome-oriented contracts?

According to the agency theory, the principals are the _____.

E. L. Thorndike's Law of Effect states that _____.

Discuss the expectancy theory.

Which of the following is a compensation program that would best support an organizational culture of cooperation and problem solving?

One way of achieving employee ownership is through stock options, which give employees the opportunity to buy stock at a fixed price.

Performing interesting work is an example of an extrinsic reward.

Relying exclusively on merit pay or individual incentives may result in high levels of work motivation but unacceptable levels of individualistic and competitive behavior.

Separating the functions of principals and agents is likely to result in:

In merit pay systems, performance is measured based on supervisor's rating.

Merit pay has the ability to define and reward a broad range of performance dimensions.

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

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Exam 12: Recognizing Employee Contributions With Pay

Merit pay systems rely on 360-degree performance feedback.

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

Perceptions of inequity may cause employees to take actions that may not help the organization.

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

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

Which of the following is a criticism of traditional merit pay programs?

Discuss the organization strategies of concentration and growth and how they influence pay dimensions.

The flow of feedback tends to be multi-directional in merit pay programs.

Why is it useful for organizations to think in terms of designing a mix of programs rather than choosing one overall compensation program? Give examples.

Which of the following is true about outcome-oriented contracts?

According to the agency theory, the principals are the _____.

E. L. Thorndike's Law of Effect states that _____.

Discuss the expectancy theory.

Which of the following is a compensation program that would best support an organizational culture of cooperation and problem solving?

One way of achieving employee ownership is through stock options, which give employees the opportunity to buy stock at a fixed price.

Performing interesting work is an example of an extrinsic reward.

Relying exclusively on merit pay or individual incentives may result in high levels of work motivation but unacceptable levels of individualistic and competitive behavior.

Separating the functions of principals and agents is likely to result in:

In merit pay systems, performance is measured based on supervisor's rating.

Merit pay has the ability to define and reward a broad range of performance dimensions.

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