Exam 10: Pay for Performance: Incentive Rewards

Employers using a lump-sum merit program will need to periodically increase base salaries in order for employees to keep pace with the cost of living or general market wages.

Which of the following pay plans can be plagued by the "free rider" effect?

Balanced scorecards refer to the use of operational yardsticks as well as traditional financial measures as a basis for computing executive pay.

Peter Drucker,the management expert,has argued that CEO pay should not be more than 20 times that of the rank-and-file employee.What did his concern focus on?

Approximately 50 percent of Canadian companies offer some form of variable pay.

Lump-sum merit pay does not contribute to escalating base salary levels.

Which of the following is an important reason why employers use piece rate systems in their compensation strategy?

Which of the following is an advantage of piece rate pay systems?

Amelia received a stellar performance appraisal in 2014,which translated to a 10 percent pay raise for 2015.Her 2014 base pay was $50 000.Which of the following applies to 2015?

Aren received a $500 pay bonus as a result of his job performance last year; however,this extra money was not added to his base pay.This is an example of which of the following?

Differential piece rate plans guarantee employees at least a base pay.

Navin works as a sales representative for Rogers Pet Foods.He is on a commission plan.His individual performance has been steady over the past few months but he has noticed a decline in his pay.Which of the following is NOT a likely cause for Navin's pay decline?

Profit-sharing plans represent one way that wealth can be redistributed at which of the following levels?

Financial incentives for salespeople are widely used.

Incentive plans can create an organizational environment of "shared commitment," since individuals contribute to organizational success.

Straight commission plans may induce salespeople to grant price concessions.

Because profit-sharing plans often fail to pay off for several years in a row,they can have limited motivational value.

Under the merit pay system,employees who have better political connections within the company may bear a threat to their supervisor and therefore may end up with a larger share of the "merit pie" than their performance would warrant.

ESOPs have been criticized because of potential inabilities to pay back the stock of employees when they retire.

Recently,stock options have been strongly criticized in the press following controversies at several companies.What has this criticism focused on?