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

Decisions about how to design pay systems should follow a careful consideration of all of the possible consequences associated with alternative forms of pay.Which of the following is the most important reason for introducing performance-based pay?

Cash rewards that are tied to some aspect of performance and paid in lump sums rather than as raises are known as merit pay.

Henry was able to bring his project to retool the plant to completion 10-days ahead of schedule.For this achievement,Henry received (as promised)a payment of $1,000 per day for each day he saved,plus an all-expense-paid one-week trip to Paris for him and his significant other.Which of the following is true?

Employees oppose the implementation of performance-based pay plans especially if:

When the strategic goal is growth,it's reasonable to reward employees for achieving growth targets.

With which of the employee payment plans could an employee actually earn less than the market rate if the employer considered his or her performance to be unsatisfactory?

Besides merit pay,two other types of performance-based pay are:

What challenges does a multinational company face in using performance-based pay?

When a reward is paid in a lump sum,it seems to have more impact than when it is paid out as small additions to employees' weekly or monthly paychecks.

Team pay may create competition among groups.

Carmen is in the first quartile (bottom)of the pay range and she has displayed superior performance this year.Hugo is in the fourth quartile (top)of the pay range and he has also displayed superior performance this year.In terms of percentage of pay:

Differentiate between merit pay and incentive pay.

A piecework plan sets a standard time for each unit of production and uses this time unit to determine how much employees are paid.

Which of the following statements about merit pay plans is true?

The most popular recognition award that firms use is

An executive's average incentive payout is about _____ percent of base pay compared to the average technical/professional's incentive payout of 8 percent.

When designed appropriately,team-based incentives offer four major advantages when compared with individual incentive systems.Which of the following statements describes one of those advantages?

As a bank teller,Diane realized there was a problem in how customers waited in line.She made a suggestion that reduced the average customer wait by two minutes,causing an increase in customer satisfaction.Diane received a special plaque from the president of the bank and a $200 check.This is an example of a(n):

During a period where individual employee performance was poor,which pay system would give the employer lowest labor costs? Why?

Which of the following types of businesses would have the highest labor costs in proportion to other costs?