Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

In a(n)_____ plan, performance is usually measured as physical output and the payment is not rolled into the base pay.

Accepted Answer

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

Question 3

Compensation systems differ according to their impact on the dimensions of expectancy theory. On which of the following dimensions do they have the greatest impact?

Accepted Answer

A) Expectancy 
B) Instrumentality 
C) Reinforcement 
D) Valence 
E) Equity 
A) Expectancy 
B) Instrumentality 
C) Reinforcement 
D) Valence 
E) Equity

Question 4

Agency theory says that the principal must choose a contracting scheme that _____.

Accepted Answer

A) is not based on compensation systems such as merit pay 
B) helps the agent maximize his/her benefits 
C) provides complete autonomy to the agent 
D) does not offer outcome-oriented compensation to agents 
E) helps align the agent's interests with the principal's interests 
A) is not based on compensation systems such as merit pay 
B) helps the agent maximize his/her benefits 
C) provides complete autonomy to the agent 
D) does not offer outcome-oriented compensation to agents 
E) helps align the agent's interests with the principal's interests

Question 5

Group incentive pay programs _____.

Accepted Answer

A) typically are plant-wide programs 
B) encourage competition between employee groups 
C) measure performance in terms of cost savings 
D) de-emphasize the standard-setting process 
E) promotes individual-orientation 
A) typically are plant-wide programs 
B) encourage competition between employee groups 
C) measure performance in terms of cost savings 
D) de-emphasize the standard-setting process 
E) promotes individual-orientation

Question 6

Which of the following is a tool that allows companies track financial results while simultaneously monitoring progress in building the capabilities and acquiring the intangible assets they would need for future growth?

Accepted Answer

A) HR scorecard 
B) External employee grid 
C) Balanced scorecard 
D) ESOP plan 
E) Merit increase grid 
A) HR scorecard 
B) External employee grid 
C) Balanced scorecard 
D) ESOP plan 
E) Merit increase grid

Question 7

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 8

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

Accepted Answer

A) Peer and subordinate ratings are rare and they tend to receive less weight than supervisory ratings. 
B) The feedback under this system tends to occur frequently, which causes discouragement among employees. 
C) The program lacks emphasis on individual performance and leave the organization with a group of nonachievers. 
D) It often involves gathering inappropriate feedback from external sources. 
E) The program discourages teamwork and organizational performance often declines. 
A) Peer and subordinate ratings are rare and they tend to receive less weight than supervisory ratings. 
B) The feedback under this system tends to occur frequently, which causes discouragement among employees. 
C) The program lacks emphasis on individual performance and leave the organization with a group of nonachievers. 
D) It often involves gathering inappropriate feedback from external sources. 
E) The program discourages teamwork and organizational performance often declines.

Question 9

From an agency theory perspective, the goal of owners is to encourage the agents to act in the best interests of the owners. This means:

Accepted Answer

A) more emphasis on stock performance and less emphasis on outcome-oriented contracts. 
B) less emphasis on noncontingent pay and more emphasis on outcome-oriented contracts. 
C) more emphasis short term compensation and less emphasis on long term compensation. 
D) more emphasis on base pay and less emphasis on stock performance. 
E) less emphasis on short term compensation and more emphasis on base pay. 
A) more emphasis on stock performance and less emphasis on outcome-oriented contracts. 
B) less emphasis on noncontingent pay and more emphasis on outcome-oriented contracts. 
C) more emphasis short term compensation and less emphasis on long term compensation. 
D) more emphasis on base pay and less emphasis on stock performance. 
E) less emphasis on short term compensation and more emphasis on base pay.

Question 10

Which of the following is a factor that determines the size and frequency of pay increases when using a merit increase grid?

Accepted Answer

A) Time spent in the current pay grade 
B) Overall profitability of the company 
C) Employees' seniority 
D) Compa-ratio of employees 
E) The skills developed by the employee 
A) Time spent in the current pay grade 
B) Overall profitability of the company 
C) Employees' seniority 
D) Compa-ratio of employees 
E) The skills developed by the employee

Question 11

Under _____, payments are based on a measure of organization performance, and the payments do not become part of the base salary.

Accepted Answer

A) fixed pay systems 
B) merit pay programs 
C) profit sharing programs 
D) individual incentives 
E) skill-based payments 
A) fixed pay systems 
B) merit pay programs 
C) profit sharing programs 
D) individual incentives 
E) skill-based payments

Question 12

Organizations decentralize pay decisions when using the concentration strategy.

Accepted Answer

A) True 
 B)False

Question 13

Gainsharing plans differ from profit-sharing plans in that they:

Accepted Answer

A) use organization-wide performance parameters. 
B) distribute payouts more frequently. 
C) make lump sum payments. 
D) can be attached to all types of jobs in the organization. 
E) discourage pursuit of broader goals of the group. 
A) use organization-wide performance parameters. 
B) distribute payouts more frequently. 
C) make lump sum payments. 
D) can be attached to all types of jobs in the organization. 
E) discourage pursuit of broader goals of the group.

Question 14

Discuss the organization strategies of concentration and growth and their corresponding differences in pay strategies dimensions.

Accepted Answer

Concentration strategies require a very

Question 15

Describe the reinforcement theory.
E. L. Thorndike's Law of Effect states that a response followed by a reward is more likely to recur in the future. The implication for compensation management is that high employee performance followed by a monetary reward will make future high performance more likely. By the same token, high performance not followed by a reward will make it less likely in the future. The theory emphasizes the importance of a person's actual experience of a reward.

Accepted Answer

E. L. Thorndike's Law of Effect states t

Question 16

Group incentives tend to measure performance in terms of _____.

Accepted Answer

A) employee skills 
B) individual performances 
C) organizational productivity 
D) physical output 
E) organizational profitability 
A) employee skills 
B) individual performances 
C) organizational productivity 
D) physical output 
E) organizational profitability

Question 17

Of the following pay programs, the weakest link between employees' performance and their earnings is found in _____ plans.

Accepted Answer

A) individual incentive 
B) merit pay 
C) profit-sharing 
D) group incentive 
E) skill-based 
A) individual incentive 
B) merit pay 
C) profit-sharing 
D) group incentive 
E) skill-based

Question 18

Overtime is an attraction of the _____ program.

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 19

The _____ requires companies to report compensation levels for the five highest paid executives and the company's performance relative to that of competitors over a five-year period.

Accepted Answer

A) World Trade Organization 
B) International Monetary Fund 
C) Federal Trade Commission 
D) Securities and Exchange Commission 
E) World Bank 
A) World Trade Organization 
B) International Monetary Fund 
C) Federal Trade Commission 
D) Securities and Exchange Commission 
E) World Bank

Question 20

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

Accepted Answer

A) have short-run pay levels below the market 
B) have a long-term orientation 
C) make centralized pay decisions 
D) maintain variable pay levels high 
E) have benefit levels below the market 
A) have short-run pay levels below the market 
B) have a long-term orientation 
C) make centralized pay decisions 
D) maintain variable pay levels high 
E) have benefit levels below the market

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

In a(n)_____ plan, performance is usually measured as physical output and the payment is not rolled into the base pay.

Compensation systems differ according to their impact on the dimensions of expectancy theory. On which of the following dimensions do they have the greatest impact?

Agency theory says that the principal must choose a contracting scheme that _____.

Group incentive pay programs _____.

Which of the following is a tool that allows companies track financial results while simultaneously monitoring progress in building the capabilities and acquiring the intangible assets they would need for future growth?

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

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

From an agency theory perspective, the goal of owners is to encourage the agents to act in the best interests of the owners. This means:

Which of the following is a factor that determines the size and frequency of pay increases when using a merit increase grid?

Under _____, payments are based on a measure of organization performance, and the payments do not become part of the base salary.

Organizations decentralize pay decisions when using the concentration strategy.

Gainsharing plans differ from profit-sharing plans in that they:

Discuss the organization strategies of concentration and growth and their corresponding differences in pay strategies dimensions.

Group incentives tend to measure performance in terms of _____.

Of the following pay programs, the weakest link between employees' performance and their earnings is found in _____ plans.

Overtime is an attraction of the _____ program.

The _____ requires companies to report compensation levels for the five highest paid executives and the company's performance relative to that of competitors over a five-year period.

When an organization is using concentration 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

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

In a(n)_____ plan, performance is usually measured as physical output and the payment is not rolled into the base pay.

Compensation systems differ according to their impact on the dimensions of expectancy theory. On which of the following dimensions do they have the greatest impact?

Agency theory says that the principal must choose a contracting scheme that _____.

Group incentive pay programs _____.

Which of the following is a tool that allows companies track financial results while simultaneously monitoring progress in building the capabilities and acquiring the intangible assets they would need for future growth?

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

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

From an agency theory perspective, the goal of owners is to encourage the agents to act in the best interests of the owners. This means:

Which of the following is a factor that determines the size and frequency of pay increases when using a merit increase grid?

Under _____, payments are based on a measure of organization performance, and the payments do not become part of the base salary.

Organizations decentralize pay decisions when using the concentration strategy.

Gainsharing plans differ from profit-sharing plans in that they:

Discuss the organization strategies of concentration and growth and their corresponding differences in pay strategies dimensions.

Group incentives tend to measure performance in terms of _____.

Of the following pay programs, the weakest link between employees' performance and their earnings is found in _____ plans.

Overtime is an attraction of the _____ program.

The _____ requires companies to report compensation levels for the five highest paid executives and the company's performance relative to that of competitors over a five-year period.

When an organization is using concentration 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