Question 1

An advantage of merit pay is that:

Accepted Answer

A)  it makes the reward more valuable by relating it to economic conditions. 
B)  it promotes group performance instead of promoting individual behavior. 
C)  it provides merit increases to employees only on the basis of performance. 
D)  it would never become costly for the employers. 
E)  it results in a bigger short-term reward for the best performers. 
A)  it makes the reward more valuable by relating it to economic conditions. 
B)  it promotes group performance instead of promoting individual behavior. 
C)  it provides merit increases to employees only on the basis of performance. 
D)  it would never become costly for the employers. 
E)  it results in a bigger short-term reward for the best performers. A

Question 2

Organizations that want employees to focus on efficiency and on group incentives are most likely to implement a _____ program.

Accepted Answer

A)  gainsharing 
B)  standard hour 
C)  bonus 
D)  commission 
E)  piece rate pay 
A)  gainsharing 
B)  standard hour 
C)  bonus 
D)  commission 
E)  piece rate pay A

Question 3

What are the advantages and disadvantages of a merit pay system?

Accepted Answer

Almost all organizations have established some program of merit pay-a system of linking pay increases to ratings on performance appraisals.An advantage of merit pay is that it makes the reward more valuable by relating it to economic conditions.Another advantage is that it provides a method for rewarding performance in all of the dimensions measured in the organization's performance management system.If that system is appropriately designed to measure all the important job behaviors,then the merit pay is linked to the behaviors the organization desires.A drawback of merit pay is that conditions can shrink the available range of increases.It also has a long-term focus.Over an entire career,the bigger increases for top performers can grow into a major change,but viewed on a year-by-year basis,they are not much of an incentive to excel.A drawback of merit pay,from the employer's standpoint,is that it can quickly become expensive.
Explanation: Pay level is the average amount (including wages, salaries, and bonuses) the organization pays for a particular job.

Question 4

Which of the following is a long-term incentive?

Accepted Answer

A)  Commission 
B)  Group bonus 
C)  Merit pay 
D)  Stock option 
E)  Piece rate 
A)  Commission 
B)  Group bonus 
C)  Merit pay 
D)  Stock option 
E)  Piece rate

Question 5

How does allowing employees to participate in pay-related decisions affect the incentive process?

Accepted Answer

Employee participation in pay-related de

Question 6

_____ refers to an incentive pay in which the wage paid is higher when a greater amount is produced.

Accepted Answer

A)  Profit sharing 
B)  Differential piece rate 
C)  Gain sharing 
D)  Scanlon pay 
E)  Merit pay 
A)  Profit sharing 
B)  Differential piece rate 
C)  Gain sharing 
D)  Scanlon pay 
E)  Merit pay

Question 7

What is the function of a merit increase grid?

Accepted Answer

A)  To make the merit increases consistent 
B)  To further increase the pay for those whose pay is relatively higher for their job 
C)  To increase the employees' compa-ratio 
D)  To stabilize economic conditions 
E)  To increase incentives on an year-by-year basis 
A)  To make the merit increases consistent 
B)  To further increase the pay for those whose pay is relatively higher for their job 
C)  To increase the employees' compa-ratio 
D)  To stabilize economic conditions 
E)  To increase incentives on an year-by-year basis

Question 8

Martin owns and manages a small auto-parts shop.He determines the time required to complete each task in his shop.When an employee completes the repair in less time,he/she receives an amount of pay equal to the rate determined by Martin for .Martin is using a:

Accepted Answer

A)  standard hour plan. 
B)  differential piecework plan. 
C)  merit pay plan. 
D)  straight piecework plan. 
E)  Scanlon plan. 
A)  standard hour plan. 
B)  differential piecework plan. 
C)  merit pay plan. 
D)  straight piecework plan. 
E)  Scanlon plan.

Question 9

The Scanlon plan is a variation of:

Accepted Answer

A)  profit sharing plans. 
B)  gainsharing plans. 
C)  merit pay plans. 
D)  individual bonus plans. 
E)  commission plans. 
A)  profit sharing plans. 
B)  gainsharing plans. 
C)  merit pay plans. 
D)  individual bonus plans. 
E)  commission plans.

Question 10

When designing incentives,managers should make sure that:

Accepted Answer

A)  all the employees are paid equal amounts. 
B)  even the lowest performing employees get some rewards. 
C)  employees focus only completing the task quickly. 
D)  employees think that the pay plan is fair. 
E)  they focus on hiring employees for whom earning money is the only reason to do a good job. 
A)  all the employees are paid equal amounts. 
B)  even the lowest performing employees get some rewards. 
C)  employees focus only completing the task quickly. 
D)  employees think that the pay plan is fair. 
E)  they focus on hiring employees for whom earning money is the only reason to do a good job.

Question 11

ESOP does not give employees the right to participate in votes by shareholders even if the stock is registered on a national exchange.

Accepted Answer

A) True 
 B)False

Question 12

Stock options are best suited to motivate day-to-day effort or to attract and retain top individual performers.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is a disadvantage of using group bonuses?

Accepted Answer

A)  Physical outputs are not rewarded. 
B)  It reduces the level of cooperation between the members of the group. 
C)  The performance measures used are narrow. 
D)  It could result in competition among groups. 
E)  It cannot be used to promote specific goals. 
A)  Physical outputs are not rewarded. 
B)  It reduces the level of cooperation between the members of the group. 
C)  The performance measures used are narrow. 
D)  It could result in competition among groups. 
E)  It cannot be used to promote specific goals.

Question 14

In order to control compensation costs,administrators of merit pay programs must closely monitor the compa-ratio and the:

Accepted Answer

A)  number of pay grades in the pay structure. 
B)  an individual's performance ratings. 
C)  number of new hires in the company. 
D)  company's stock price in the financial year. 
E)  average pay of the area where the organization is functioning. 
A)  number of pay grades in the pay structure. 
B)  an individual's performance ratings. 
C)  number of new hires in the company. 
D)  company's stock price in the financial year. 
E)  average pay of the area where the organization is functioning.

Question 15

A piecework rate plan is best suited for:

Accepted Answer

A)  HR professionals. 
B)  executives. 
C)  production workers. 
D)  managers. 
E)  knowledge workers. 
A)  HR professionals. 
B)  executives. 
C)  production workers. 
D)  managers. 
E)  knowledge workers.

Question 16

What is a balanced scorecard?

Accepted Answer

A)  A combination of performance measures directed toward the company's long- and short-term goals and used as the basis for awarding incentive pay 
B)  A performance review process where the organization collects feedback from customers, managers, and subordinates, assigns ratings, and lists them on the company's performance card 
C)  An arrangement in which the organization distributes shares of stock to all its employees by placing the stock into a trust 
D)  An incentive pay in which payments are a percentage of the organization's profits and do not become part of the employees' base salary 
E)  It is a system designed to measure the performance of HR personnel based on the quality of recruitment 
A)  A combination of performance measures directed toward the company's long- and short-term goals and used as the basis for awarding incentive pay 
B)  A performance review process where the organization collects feedback from customers, managers, and subordinates, assigns ratings, and lists them on the company's performance card 
C)  An arrangement in which the organization distributes shares of stock to all its employees by placing the stock into a trust 
D)  An incentive pay in which payments are a percentage of the organization's profits and do not become part of the employees' base salary 
E)  It is a system designed to measure the performance of HR personnel based on the quality of recruitment

Question 17

How does the balanced scorecard help organizations deal with unethical behaviors of executives?

Accepted Answer

A)  It allows companies to deduct executive pay that exceeds $1 million. 
B)  Rewarding the achievement of a variety of goals reduces temptation on the executive's part to gain bonuses by manipulating data. 
C)  It encourages executives to hold on to their stock options when the company is undergoing financial problems. 
D)  It forces executives to focus on company's long-term success because funds in ESOP are guaranteed by the Pension Benefit Guarantee Corporation. 
E)  In a balance scorecard, maximum points are given to ethical behavior. 
A)  It allows companies to deduct executive pay that exceeds $1 million. 
B)  Rewarding the achievement of a variety of goals reduces temptation on the executive's part to gain bonuses by manipulating data. 
C)  It encourages executives to hold on to their stock options when the company is undergoing financial problems. 
D)  It forces executives to focus on company's long-term success because funds in ESOP are guaranteed by the Pension Benefit Guarantee Corporation. 
E)  In a balance scorecard, maximum points are given to ethical behavior.

Question 18

What is the difference between stock options and employee stock ownership plan (ESOP)?

Accepted Answer

A)  Stock options carry significant risk whereas ESOPs are risk-free. 
B)  Stock options are usually used with top management whereas ESOPs are provided to all employees. 
C)  In stock options, stocks are placed into a trust whereas ESOPs give employees the right to buy a certain number of shares of stock. 
D)  Under stock options, employees can sell their stocks whereas ESOPs do not allow employees to sell their stocks. 
E)  Earnings from stock options are exempt from income taxes whereas earnings from ESOPs are taxable. 
A)  Stock options carry significant risk whereas ESOPs are risk-free. 
B)  Stock options are usually used with top management whereas ESOPs are provided to all employees. 
C)  In stock options, stocks are placed into a trust whereas ESOPs give employees the right to buy a certain number of shares of stock. 
D)  Under stock options, employees can sell their stocks whereas ESOPs do not allow employees to sell their stocks. 
E)  Earnings from stock options are exempt from income taxes whereas earnings from ESOPs are taxable.

Question 19

If employee participation in making pay-related decisions is encouraged in an organization,then:

Accepted Answer

A)  administering the plans become simple. 
B)  the organization's interests can be best protected. 
C)  the cost borne by the organization decreases. 
D)  monitoring performance becomes difficult. 
E)  the incentive plan has more chances of being successful. 
A)  administering the plans become simple. 
B)  the organization's interests can be best protected. 
C)  the cost borne by the organization decreases. 
D)  monitoring performance becomes difficult. 
E)  the incentive plan has more chances of being successful.

Question 20

Which of the following incentive programs measures improvements in productivity and effectiveness and distributes a portion of each profit to employees?

Accepted Answer

A)  Merit pay 
B)  Team award 
C)  Commission 
D)  Profit sharing 
E)  Gainsharing 
A)  Merit pay 
B)  Team award 
C)  Commission 
D)  Profit sharing 
E)  Gainsharing

An advantage of merit pay is that:

Organizations that want employees to focus on efficiency and on group incentives are most likely to implement a _____ program.

What are the advantages and disadvantages of a merit pay system?

Which of the following is a long-term incentive?

How does allowing employees to participate in pay-related decisions affect the incentive process?

_____ refers to an incentive pay in which the wage paid is higher when a greater amount is produced.

What is the function of a merit increase grid?

Martin owns and manages a small auto-parts shop.He determines the time required to complete each task in his shop.When an employee completes the repair in less time,he/she receives an amount of pay equal to the rate determined by Martin for .Martin is using a:

The Scanlon plan is a variation of:

When designing incentives,managers should make sure that:

ESOP does not give employees the right to participate in votes by shareholders even if the stock is registered on a national exchange.

Stock options are best suited to motivate day-to-day effort or to attract and retain top individual performers.

Which of the following is a disadvantage of using group bonuses?

In order to control compensation costs,administrators of merit pay programs must closely monitor the compa-ratio and the:

A piecework rate plan is best suited for:

What is a balanced scorecard?

How does the balanced scorecard help organizations deal with unethical behaviors of executives?

What is the difference between stock options and employee stock ownership plan (ESOP)?

If employee participation in making pay-related decisions is encouraged in an organization,then:

Which of the following incentive programs measures improvements in productivity and effectiveness and distributes a portion of each profit to employees?

Managing Human Resources

Trends in Human Resource Management

Providing Equal Employment Opportunity and a Safe Workplace

Analyzing Work and Designing Jobs

Planning for and Recruiting Human Resources

Selecting Employees and Placing Them in Jobs

Training Employees

Managing Employees Performance

Developing Employees for Future Success

Separating and Retaining Employees

Establishing a Pay Structure

Providing Employee Benefits

Collective Bargaining and Labor Relations

Managing Human Resources Globally

Creating and Maintaining High-Performance Organizations

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Exam 12: Recognizing Employee Contributions With Pay

An advantage of merit pay is that:

Organizations that want employees to focus on efficiency and on group incentives are most likely to implement a _____ program.

What are the advantages and disadvantages of a merit pay system?

Which of the following is a long-term incentive?

How does allowing employees to participate in pay-related decisions affect the incentive process?

_____ refers to an incentive pay in which the wage paid is higher when a greater amount is produced.

What is the function of a merit increase grid?

Martin owns and manages a small auto-parts shop.He determines the time required to complete each task in his shop.When an employee completes the repair in less time,he/she receives an amount of pay equal to the rate determined by Martin for .Martin is using a:

The Scanlon plan is a variation of:

When designing incentives,managers should make sure that:

ESOP does not give employees the right to participate in votes by shareholders even if the stock is registered on a national exchange.

Stock options are best suited to motivate day-to-day effort or to attract and retain top individual performers.

Which of the following is a disadvantage of using group bonuses?

In order to control compensation costs,administrators of merit pay programs must closely monitor the compa-ratio and the:

A piecework rate plan is best suited for:

What is a balanced scorecard?

How does the balanced scorecard help organizations deal with unethical behaviors of executives?

What is the difference between stock options and employee stock ownership plan (ESOP)?

If employee participation in making pay-related decisions is encouraged in an organization,then:

Which of the following incentive programs measures improvements in productivity and effectiveness and distributes a portion of each profit to employees?

Managing Human Resources

Trends in Human Resource Management

Providing Equal Employment Opportunity and a Safe Workplace

Analyzing Work and Designing Jobs

Planning for and Recruiting Human Resources

Selecting Employees and Placing Them in Jobs

Training Employees

Managing Employees Performance

Developing Employees for Future Success

Separating and Retaining Employees

Establishing a Pay Structure

Providing Employee Benefits

Collective Bargaining and Labor Relations

Managing Human Resources Globally

Creating and Maintaining High-Performance Organizations

Filters