Question 1

With respect to employee participation in decision-making,the more agents there are,the lower the monitoring cost.

Accepted Answer

A) True 
 B)False  False

Question 2

The Scanlon plan is an example of a(n)________ plan.

Accepted Answer

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

Question 3

Differentiate between outcome-oriented contracts and behavior-based contracts.

Accepted Answer

To reduce agency costs,the agency theory says that the principal must choose a contracting scheme that helps align the interests of the agents with the principal's own interests.These contracts are classified as either behavior-oriented (such as merit pay)or outcome-oriented (e.g.,stock,options,profit sharing).Outcome-oriented contracts increase the risk borne by the agent.Because agents are averse to risk,they may require higher pay to make up for it.Thus,there is a trade-off between risk and incentives that must be considered.Outcome-oriented contracts,for example,are typical for executives.Behavior-based contracts do not transfer risk to the agent and thus do not require a compensating wage differential.However,the principal must either invest in monitoring information on what the agent has done or structure the contract so that pay is linked at least partly to outcomes.

Question 4

By law,what percentage of assets must an employee stock ownership plan (ESOP)invest in its company's stock?

Accepted Answer

A) 26 percent 
B) 51 percent 
C) 80 percent 
D) 75 percent 
E) 76 percent 
A) 26 percent 
B) 51 percent 
C) 80 percent 
D) 75 percent 
E) 76 percent

Question 5

What is Thorndike's Law of Effect? Explain its significance with reference to reinforcement theory.

Accepted Answer

E.L.Thorndike's Law of Effect states tha

Question 6

Discuss the organization strategies of concentration and growth and how they influence pay dimensions.

Accepted Answer

Growth strategies emphasize innovation,r

Question 7

Which of the following is true of how agents may differ from principals?

Accepted Answer

A) Agents can diversify the risks more easily. 
B) Agents are more likely to pursue projects with high potential payoffs. 
C) Agents can diversify investments better. 
D) Agents are more averse to risk. 
E) Agents are likely to prefer more emphasis on uncertain incentives than base pay. 
A) Agents can diversify the risks more easily. 
B) Agents are more likely to pursue projects with high potential payoffs. 
C) Agents can diversify investments better. 
D) Agents are more averse to risk. 
E) Agents are likely to prefer more emphasis on uncertain incentives than base pay.

Question 8

Which of the following is a compensation program that would best support an organizational culture of cooperation and problem solving?

Accepted Answer

A) Fixed pay 
B) Merit pay 
C) Gainsharing 
D) Incentive pay 
E) Skill-based pay 
A) Fixed pay 
B) Merit pay 
C) Gainsharing 
D) Incentive pay 
E) Skill-based pay

Question 9

In incentive pay,performance measures are primarily based on

Accepted Answer

A) a supervisor's appraisal. 
B) individual productivity. 
C) company profits. 
D) company stock returns. 
E) production costs. 
A) a supervisor's appraisal. 
B) individual productivity. 
C) company profits. 
D) company stock returns. 
E) production costs.

Question 10

Valence of pay outcomes should change according to different pay systems.

Accepted Answer

A) True 
 B)False

Question 11

Group incentives tend to measure performance in terms of

Accepted Answer

A) employee retention. 
B) individual motivation. 
C) organizational environment. 
D) physical output. 
E) organizational profitability. 
A) employee retention. 
B) individual motivation. 
C) organizational environment. 
D) physical output. 
E) organizational profitability.

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

Employee stock ownership plans (ESOPs)give employees the right to vote their securities if registered on a national exchange.

Accepted Answer

A) True 
 B)False

Question 14

Agency costs are likely to arise when

Accepted Answer

A) principals and agents have different goals. 
B) owners and managers are the same. 
C) stockholders are involved in day-to-day operations of the company. 
D) the stockholders are aware of the degree to which the agents are pursuing the principal's goals. 
E) there is information symmetry between the agent and the principal. 
A) principals and agents have different goals. 
B) owners and managers are the same. 
C) stockholders are involved in day-to-day operations of the company. 
D) the stockholders are aware of the degree to which the agents are pursuing the principal's goals. 
E) there is information symmetry between the agent and the principal.

Question 15

According to E.L.Thorndike's Law of Effect,high performance followed by a reward will motivate employees to repeat the performance and make it recur more often in the future.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is true about outcome-oriented contracts?

Accepted Answer

A) They require more supervision than behavior-oriented contracts. 
B) When profits drop,agents' compensation goes up in outcome-oriented contracts. 
C) Agents do not demand compensating wage differentials in such contracts. 
D) Agents face minimal risks in such contracts. 
E) They are typically a major component of executive compensation. 
A) They require more supervision than behavior-oriented contracts. 
B) When profits drop,agents' compensation goes up in outcome-oriented contracts. 
C) Agents do not demand compensating wage differentials in such contracts. 
D) Agents face minimal risks in such contracts. 
E) They are typically a major component of executive compensation.

Question 17

Kendal assesses her pay compared to others doing the same job through procedural fairness.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following is an example of an ownership plan used in compensation systems?

Accepted Answer

A) Gainsharing plan 
B) Profit-sharing program 
C) Group incentive 
D) Stock option 
E) Individual incentive plan 
A) Gainsharing plan 
B) Profit-sharing program 
C) Group incentive 
D) Stock option 
E) Individual incentive plan

Question 19

"Knowledge work" is a component part of which pay system?

Accepted Answer

A) Merit pay 
B) Profit sharing 
C) Skill-based program 
D) Incentive pay 
E) Gainsharing 
A) Merit pay 
B) Profit sharing 
C) Skill-based program 
D) Incentive pay 
E) Gainsharing

Question 20

Relying exclusively on merit pay or individual incentives may result in high levels of work motivation but unacceptable levels of individualistic and competitive behavior.

Accepted Answer

A) True 
 B)False

With respect to employee participation in decision-making,the more agents there are,the lower the monitoring cost.

The Scanlon plan is an example of a(n)________ plan.

Differentiate between outcome-oriented contracts and behavior-based contracts.

By law,what percentage of assets must an employee stock ownership plan (ESOP)invest in its company's stock?

What is Thorndike's Law of Effect? Explain its significance with reference to reinforcement theory.

Discuss the organization strategies of concentration and growth and how they influence pay dimensions.

Which of the following is true of how agents may differ from principals?

Which of the following is a compensation program that would best support an organizational culture of cooperation and problem solving?

In incentive pay,performance measures are primarily based on

Valence of pay outcomes should change according to different pay systems.

Group incentives tend to measure performance in terms of

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

Employee stock ownership plans (ESOPs)give employees the right to vote their securities if registered on a national exchange.

Agency costs are likely to arise when

According to E.L.Thorndike's Law of Effect,high performance followed by a reward will motivate employees to repeat the performance and make it recur more often in the future.

Which of the following is true about outcome-oriented contracts?

Kendal assesses her pay compared to others doing the same job through procedural fairness.

Which of the following is an example of an ownership plan used in compensation systems?

"Knowledge work" is a component part of which pay system?

Relying exclusively on merit pay or individual incentives may result in high levels of work motivation but unacceptable levels of individualistic and competitive behavior.

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

With respect to employee participation in decision-making,the more agents there are,the lower the monitoring cost.

The Scanlon plan is an example of a(n)________ plan.

Differentiate between outcome-oriented contracts and behavior-based contracts.

By law,what percentage of assets must an employee stock ownership plan (ESOP)invest in its company's stock?

What is Thorndike's Law of Effect? Explain its significance with reference to reinforcement theory.

Discuss the organization strategies of concentration and growth and how they influence pay dimensions.

Which of the following is true of how agents may differ from principals?

Which of the following is a compensation program that would best support an organizational culture of cooperation and problem solving?

In incentive pay,performance measures are primarily based on

Valence of pay outcomes should change according to different pay systems.

Group incentives tend to measure performance in terms of

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

Employee stock ownership plans (ESOPs)give employees the right to vote their securities if registered on a national exchange.

Agency costs are likely to arise when

According to E.L.Thorndike's Law of Effect,high performance followed by a reward will motivate employees to repeat the performance and make it recur more often in the future.

Which of the following is true about outcome-oriented contracts?

Kendal assesses her pay compared to others doing the same job through procedural fairness.

Which of the following is an example of an ownership plan used in compensation systems?

"Knowledge work" is a component part of which pay system?

Relying exclusively on merit pay or individual incentives may result in high levels of work motivation but unacceptable levels of individualistic and competitive behavior.

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