Question 1

A requirement of implementing a pay for performance system is to eliminate nonmonetary rewards at an organization.

Accepted Answer

A) True 
 B)False  False

Question 2

Dixie Manufacturing uses a strict merit pay system.Angel is one of 12 assembly line workers in your department,and she has been a good performer for the last nine years.But this year,her performance has been significantly below average.Angel has not mentioned problems at home,but you noticed in the crime section of the local paper that her teenage son was convicted for driving under the influence at New Year's,and in the legal postings you learned she divorced her husband for desertion at Easter.The local paper also carried a story about children with learning disabilities,and you noticed that Angel's youngest daughter was featured.What should Angel's merit raise be this year? Angel's raise should be

Accepted Answer

A) an average of what she earned in previous years.She is obviously a good employee who is going through a hard time. 
B) the average raise that everyone else in the department is getting.Otherwise,Angel will get discouraged,and you may lose a good employee. 
C) a high raise.Angel has higher need for income since her husband deserted her and her family. 
D) zero.Poor performance cannot justify a raise. 
E) Under a strict merit raise system,none of the above is a correct responsE. 
A) an average of what she earned in previous years.She is obviously a good employee who is going through a hard time. 
B) the average raise that everyone else in the department is getting.Otherwise,Angel will get discouraged,and you may lose a good employee. 
C) a high raise.Angel has higher need for income since her husband deserted her and her family. 
D) zero.Poor performance cannot justify a raise. 
E) Under a strict merit raise system,none of the above is a correct responsE. D

Question 3

What are the three levels of aggregation for performance-based pay?

Accepted Answer

Individual level,team or group level,and company-level

Question 4

Which of the following statements about specifying and measuring performance is true?

Accepted Answer

A) Many firms rely heavily on financial performance measures 
B) One of the easiest to use measures for employee performance is a qualitative measure such as customer satisfaction. 
C) Organizations should look for ways to measure employee results not employee behavior. 
D) Organizations should take the same approach to measuring performance whether taking a long-term or short-term perspective. 
E) Traditional commissions focus on long-term performancE. 
A) Many firms rely heavily on financial performance measures 
B) One of the easiest to use measures for employee performance is a qualitative measure such as customer satisfaction. 
C) Organizations should look for ways to measure employee results not employee behavior. 
D) Organizations should take the same approach to measuring performance whether taking a long-term or short-term perspective. 
E) Traditional commissions focus on long-term performancE.

Question 5

Broad-based stock option plans

Accepted Answer

A) are easy to develop because performance measures are easy to locate and quantify 
B) seldom include cash payments 
C) always relate incentives to the attainment of corporate or strategic business unit goals 
D) seldom put earnings at risk. 
E) are accurately defined by none of the above 
A) are easy to develop because performance measures are easy to locate and quantify 
B) seldom include cash payments 
C) always relate incentives to the attainment of corporate or strategic business unit goals 
D) seldom put earnings at risk. 
E) are accurately defined by none of the above

Question 6

The Scanlon Plan

Accepted Answer

A) is appropriate to small,mature firms 
B) focuses only on labor cost savings 
C) uses simple measures of performance 
D) was developed during the Depression Era 
E) All of the above 
A) is appropriate to small,mature firms 
B) focuses only on labor cost savings 
C) uses simple measures of performance 
D) was developed during the Depression Era 
E) All of the above

Question 7

Tying performance-based pay to achieving _____ usually improves performance in that area.

Accepted Answer

A) growth 
B) profit 
C) cost savings 
D) project success 
E) all of the above 
A) growth 
B) profit 
C) cost savings 
D) project success 
E) all of the above

Question 8

The general pattern is that proportionately less incentive pay is used for employees higher in the hierarchy.

Accepted Answer

A) True 
 B)False

Question 9

How is the base pay set when merit pay plans are used?

Accepted Answer

Base pay (the pay to be received regardl

Question 10

Since performance can be measured at the individual,work team,department,plant,strategic business unit,or organizational level,how does a company specify the level of aggregation for reward distribution?

Accepted Answer

The choice of what level of aggregation

Question 11

_____ are used to determine which employees are covered by various components of a total pay plan.

Accepted Answer

A) Rules of earnings dispensation 
B) Eligibility rules 
C) Equal Pay Act guidelines 
D) Rules for qualification 
E) The principles of pay equity 
A) Rules of earnings dispensation 
B) Eligibility rules 
C) Equal Pay Act guidelines 
D) Rules for qualification 
E) The principles of pay equity

Question 12

When tax rates for long-term capital gains are _____ relative to tax rates for ordinary income,stock options become _____ popular.

Accepted Answer

A) high,more 
B) low,more 
C) high,less 
D) low,less 
E) none of the above 
A) high,more 
B) low,more 
C) high,less 
D) low,less 
E) none of the above

Question 13

Employee opposition can be a major obstacle to the successful implementation of performance-based pay,especially incentive plans.

Accepted Answer

A) True 
 B)False

Question 14

Gain-sharing plans are premised on the assumption that it is possible to reduce costs by eliminating waste,developing new or better products or services,or working smarter.

Accepted Answer

A) True 
 B)False

Question 15

In terms of labor costs,it is advantageous for the company to keep base pay rates stable,and tie added compensation to performance.

Accepted Answer

A) True 
 B)False

Question 16

To be effective,performance-based systems must do all of the following except:

Accepted Answer

A) specify and measure performance 
B) specify method for linking pay to performance 
C) specify level of aggregation for reward distribution 
D) gain employee acceptance 
E) all of the above are necessary 
A) specify and measure performance 
B) specify method for linking pay to performance 
C) specify level of aggregation for reward distribution 
D) gain employee acceptance 
E) all of the above are necessary

Question 17

What are two disadvantages of merit pay?

Accepted Answer

One major disadvantage of merit pay is t

Question 18

Stock option plans:

Accepted Answer

A) give the employee a chance to buy stock in the company under certain conditions 
B) are being considered too hazardous after the Enron collapse in 2002 
C) are restricted to executives 
D) are always based on individual performance 
E) all of the above are true 
A) give the employee a chance to buy stock in the company under certain conditions 
B) are being considered too hazardous after the Enron collapse in 2002 
C) are restricted to executives 
D) are always based on individual performance 
E) all of the above are true

Question 19

In order for performance-based pay to be used effectively in an organization,it is necessary to:

Accepted Answer

A) link performance to outcomes important to management but not necessarily the employee 
B) develop valid performance measures 
C) promote a secret pay policy so everyone will work to their maximum 
D) do away with merit based pay increases 
E) reduce the cost of benefits so performance based pay can be afforded 
A) link performance to outcomes important to management but not necessarily the employee 
B) develop valid performance measures 
C) promote a secret pay policy so everyone will work to their maximum 
D) do away with merit based pay increases 
E) reduce the cost of benefits so performance based pay can be afforded

Question 20

Performance based pay recognizes that people working in the same job can contribute to the organization at a different level in terms of value and seeks to provide an incentive for maximizing their contribution.

Accepted Answer

A) True 
 B)False

A requirement of implementing a pay for performance system is to eliminate nonmonetary rewards at an organization.

What are the three levels of aggregation for performance-based pay?

Which of the following statements about specifying and measuring performance is true?

Broad-based stock option plans

The Scanlon Plan

Tying performance-based pay to achieving _____ usually improves performance in that area.

The general pattern is that proportionately less incentive pay is used for employees higher in the hierarchy.

How is the base pay set when merit pay plans are used?

Since performance can be measured at the individual,work team,department,plant,strategic business unit,or organizational level,how does a company specify the level of aggregation for reward distribution?

_____ are used to determine which employees are covered by various components of a total pay plan.

When tax rates for long-term capital gains are _ relative to tax rates for ordinary income,stock options become _ popular.

Employee opposition can be a major obstacle to the successful implementation of performance-based pay,especially incentive plans.

Gain-sharing plans are premised on the assumption that it is possible to reduce costs by eliminating waste,developing new or better products or services,or working smarter.

In terms of labor costs,it is advantageous for the company to keep base pay rates stable,and tie added compensation to performance.

To be effective,performance-based systems must do all of the following except:

What are two disadvantages of merit pay?

Stock option plans:

In order for performance-based pay to be used effectively in an organization,it is necessary to:

Performance based pay recognizes that people working in the same job can contribute to the organization at a different level in terms of value and seeks to provide an incentive for maximizing their contribution.

Managing Human Resources

Understanding the External and Organizational Environments

Hr Planning for Alignment and Change

Ensuring Fair Treatment and Legal Compliance

Using Job Analysis and Competency Modeling

Recruiting and Retaining Qualified Employees

Selecting Employees to Fit the Job and the Organization

Training and Developing a Competitive Workforce

Conducting Performance Management

Developing an Approach to Total Compensation

Providing Benefits and Services

Promoting Workplace Safety and Health

Understanding Unionization and Collective Bargaining

Filters

Exam 11: Using Performance-Based Pay to Achieve Strategic Objectives

A requirement of implementing a pay for performance system is to eliminate nonmonetary rewards at an organization.

What are the three levels of aggregation for performance-based pay?

Which of the following statements about specifying and measuring performance is true?

Broad-based stock option plans

The Scanlon Plan

Tying performance-based pay to achieving _____ usually improves performance in that area.

The general pattern is that proportionately less incentive pay is used for employees higher in the hierarchy.

How is the base pay set when merit pay plans are used?

Since performance can be measured at the individual,work team,department,plant,strategic business unit,or organizational level,how does a company specify the level of aggregation for reward distribution?

_____ are used to determine which employees are covered by various components of a total pay plan.

When tax rates for long-term capital gains are _____ relative to tax rates for ordinary income,stock options become _____ popular.

Employee opposition can be a major obstacle to the successful implementation of performance-based pay,especially incentive plans.

Gain-sharing plans are premised on the assumption that it is possible to reduce costs by eliminating waste,developing new or better products or services,or working smarter.

In terms of labor costs,it is advantageous for the company to keep base pay rates stable,and tie added compensation to performance.

To be effective,performance-based systems must do all of the following except:

What are two disadvantages of merit pay?

Stock option plans:

In order for performance-based pay to be used effectively in an organization,it is necessary to:

Performance based pay recognizes that people working in the same job can contribute to the organization at a different level in terms of value and seeks to provide an incentive for maximizing their contribution.

Managing Human Resources

Understanding the External and Organizational Environments

Hr Planning for Alignment and Change

Ensuring Fair Treatment and Legal Compliance

Using Job Analysis and Competency Modeling

Recruiting and Retaining Qualified Employees

Selecting Employees to Fit the Job and the Organization

Training and Developing a Competitive Workforce

Conducting Performance Management

Developing an Approach to Total Compensation

Providing Benefits and Services

Promoting Workplace Safety and Health

Understanding Unionization and Collective Bargaining

Filters

When tax rates for long-term capital gains are _ relative to tax rates for ordinary income,stock options become _ popular.