Deck 8: Motivation: From Concepts to Applications

Question 1

Managers at Flavors, a restaurant chain, train their employees such that in the absence of employees, someone trained in the same skills can step in and do the job equally well. Thus, many modules in training are extensive as they provide employees with details of the skill sets required for different jobs. In practice, this lengthy training program does help the company as a well-trained and flexible workforce is at their disposal at all times. The managers at Flavors use ________.

A) job rotation
B) job sharing
C) telecommuting
D) vertical enhancement
E) flextime

Answer 1

A

Question 2

________ is an extrinsic means of motivation.

A) Recognition
B) Flexibility
C) Salary
D) Responsibility
E) Autonomy

Answer 2

C

Question 3

With reference to the job characteristics model, which of the following defines task identity?

A) the degree to which a job requires a variety of different activities
B) the degree to which work activities generate direct and clear information about performance
C) the degree to which a job has an impact on the lives or work of other people
D) the degree to which a job provides the worker freedom in scheduling and procedure
E) the degree to which a job requires completion of a whole and identifiable piece of work

Answer 3

E

Question 4

CalTrack Services has been facing employee-related issues like decreased productivity, low morale, and poor organizational commitment in recent times. At a meeting to discuss strategies to address these issues of immediate concern, Joe McEnroe, the production manager, proposed that the roles of employees working on key projects be enhanced to increase autonomy. He felt that this would enhance productivity, motivation, and accountability. Taking a cue from McEnroe, Paul Wilbur suggested job rotation as a solution to the problem they were facing. Paul felt that a change of job roles would make the employees keener to learn and perform. He emphasized that job rotation would help management create a larger skill base to choose from, depending on the needs of specific projects.
Which of the following, if true, would weaken the argument of adopting job rotation?

A) The company has been conducting professional training programs to keep all employees up-to-date with the developments in the field.
B) The company is now entering its busiest business season with multiple project deadlines.
C) The research evidence favoring job rotation has rarely used samples from the service industry.
D) AmWeb, one of the major rival firms, witnessed a substantial rise in profits following its cross-training program for employees.
E) The employees of the company have similar skill sets which are suited to transfer of learning.

Question 5

Which of the following statements is true of the job characteristics model?

A) The operation of the model requires employees to have similar skill sets.
B) The operation of the model fulfils only extrinsic motivational needs.
C) The operation of the model cannot be quantitatively measured.
D) The operation of the model is relatively individualistic in nature.
E) The operation of the model is universal and unaffected by cultural factors.

Question 6

One of the methods of job enrichment is to expand jobs vertically. This method involves modifying the ________ dimension of the job.

A) task significance
B) autonomy
C) skill variety
D) task identity
E) feedback

Question 7

Job enrichment is the process of ________.

A) periodic shifting of an employee from one task to another with similar skill requirements at the same organizational level
B) expansion of jobs by increasing the degree to which the worker controls the planning, execution, and evaluation of the work
C) evaluation of an employee wherein subordinates, peers, and managers provide comprehensive feedback
D) distribution of a significant degree of power between subordinates and supervisors
E) redistribution of power within the organization through work councils and board representations

Question 8

Adam Sears is an assembly line employee with Swenson Motors. Though Adam is popular among his supervisors and colleagues, Adam experiences low morale and lack of motivation. He feels frustrated that his job is restricted to fixing nuts and bolts on the car parts. He fears that he has no chances of advancing in his career as he cannot completely assemble a car. Which of the following is true with regard to Adam?

A) Adam's job has low task identity.
B) Adam's job has high task complexity.
C) Adam's job has low role definition.
D) Adam's job has high task significance.
E) Adam's job has a high span of control.

Question 9

According to the job characteristics model, autonomy is defined as the degree to which ________.

A) a job requires completion of a whole and identifiable piece of work
B) a job provides the worker freedom, independence, and discretion
C) a job has an impact on the lives or work of other people
D) a job generates direct and clear information about performance
E) a job requires a variety of different activities

Question 10

Samantha Barnes is an emergency medical technician. Recently, during an emergency call, she was able to resuscitate a man who had a cardiac arrest. Subsequently, she spent some time calming the 12-year-old daughter of the patient and looked after her till the rest of the patient's family arrived at the hospital. Based on this description, it can be concluded that Samantha's job is high in ________.

A) task significance
B) feedback
C) extrinsic rewards
D) task identity
E) job rotation

Question 11

CalTrack Services has been facing employee-related issues like decreased productivity, low morale, and poor organizational commitment in recent times. At a meeting to discuss strategies to address these issues of immediate concern, Joe McEnroe, the production manager, proposed that the roles of employees working on key projects be enhanced to increase autonomy. He felt that this would enhance productivity, motivation, and accountability. Taking a cue from McEnroe, Paul Wilbur suggested job rotation as a solution to the problem they were facing. Paul felt that a change of job roles would make the employees keener to learn and perform. He emphasized that job rotation would help management create a larger skill base to choose from, depending on the needs of specific projects.
Which of the following, if true, would strengthen the argument in favor of adopting job rotation?

A) The company has launched a new brand which is cannibalizing one of its existing products.
B) Two front-level managers have resigned in the last quarter as they were not promoted.
C) The company is currently facing numerous budget constraints.
D) The company can enhance productivity of existing employees in various areas for different projects.
E) The company has recently given employees new responsibilities by combining their routine tasks into natural work units.

Question 12

Which of the following series of dimensions of the job characteristics model (JCM) combine to create meaningful work?

A) feedback, task identity, and task significance
B) skill variety, task identity, and task significance
C) skill variety, autonomy, and feedback
D) autonomy, task identity, and feedback
E) skill variety, autonomy, and task significance

Question 13

According to the job characteristics model, task significance is the degree to which ________.

A) a job generates direct and clear information about performance
B) a job bears an impact on the lives or work of other people
C) a job requires a variety of different activities
D) a job requires completion of a whole and identifiable piece of work
E) a job provides the worker freedom in scheduling work and determining its procedure

Question 14

Which of the following statements is true regarding job rotation?

A) It decreases employee motivation.
B) It decreases productivity in the short-run.
C) It decreases the flexibility with which an organization can adapt to a change.
D) It decreases the flexibility in scheduling work.
E) It decreases supervisory workload.

Question 15

According to the job characteristics model, ________ indicates the degree to which carrying out work activities generates direct and clear information about your own performance.

A) feedback
B) task identity
C) skill variety
D) autonomy
E) task significance

Question 16

A prerequisite condition for job rotation is the ________.

A) presence of high level of autonomy among workers
B) presence of employee involvement programs
C) presence of alternative work arrangements for employees to avail
D) presence of employees with similar skill sets and requirements
E) presence of high need for affiliation among workers

Question 17

The core dimensions of the job characteristics model can be combined into a single predictive index called ________.

A) job diagnostic score
B) personal outcome score
C) potential development score
D) motivating potential score
E) extrinsic motivation score

Question 18

The periodic shifting of an employee from one task to another with similar skill requirements at the same organizational level is defined as ________.

A) job enrichment
B) job analysis
C) job rotation
D) job sharing
E) job enlargement

Question 19

With reference to the job characteristics model, which of the following defines skill variety?

A) the degree to which a job has an impact on the lives or work of other people
B) the degree to which a job requires completion of a whole and identifiable piece of work
C) the degree to which work activities generate direct and clear information about performance
D) the degree to which a job provides the worker freedom in scheduling and procedure
E) the degree to which a job requires a variety of different activities tapping different abilities

Question 20

Job design is defined as the ________.

A) degree to which the job rewards competence
B) degree of decision-making power with the immediate superiors
C) way the elements in a job are organized
D) degree to which the job contributes to profit margins
E) way the job is evaluated in terms of its relative worth to other jobs

Question 21

To be effective, an employee involvement program must ________.

A) mandatorily establish work councils in the company
B) rightsize the company by eliminating obsolete positions
C) incorporate the unique demands of different cultures
D) eliminate the influence of employees in managerial decision making
E) implement autocratic ways of handling its employees

Question 22

Which of the following alternative work arrangements enables the organization to draw on the talents of more than one individual in a given job?

A) flextime
B) telecommuting
C) profit-sharing
D) gainsharing
E) job sharing

Question 23

________ is a participative process that uses employees' input to increase their commitment to the organization's success.

A) Job enrichment
B) Employee involvement
C) Groupshifting
D) Vertical integration
E) Job sharing

Question 24

Employees who use the flextime option have to ________.

A) work from home only two days a week
B) work from the office during the common core period and put in the extra hours as per their convenience
C) work from the office for three days of the week
D) work from home on a relatively permanent basis
E) work from the office based on a schedule fixed with the compatible partner they function with

Question 25

Which of the following factors represents the influence of social aspects of the work environment on motivation?

A) task identity
B) autonomy
C) skill variety
D) interdependence
E) feedback

Question 26

Participative management is a method of management where ________.

A) low-level workers are responsible for making corporate policy decisions
B) representatives of workers form work councils and these councils must be consulted when management makes decisions about employees
C) few representatives of workers sit on a company's board of directors
D) subordinates share a significant degree of decision-making power with their immediate superiors
E) low-level workers meet occasionally with the CEO to discuss problems within their department

Question 27

For management, the major downside of telecommuting is ________.

A) reduced morale
B) decreased productivity
C) difficulty in scheduling work
D) less direct supervision of employees
E) increased turnover

Question 28

The job characteristics model describes five dimensions of a job. A job can be enriched by modifying one or more of these five dimensions. Which of the following methods of job enrichment involves modifying skill variety and task identity dimensions of a job?

A) combining tasks
B) expanding jobs vertically
C) establishing client relationships
D) forming natural work units
E) opening feedback channels

Question 29

An arrangement that allows two or more individuals to split a traditional 40-hour-a-week job is called ________.

A) telecommuting
B) gainsharing
C) job sharing
D) flextime
E) job rotation

Question 30

Beyond redesigning the nature of the work itself and involving employees in decisions, another approach to making the work environment more motivating is to alter work arrangements to meet employee needs. Which of the following is designed to give an employee greater control of their schedule?

A) gainsharing
B) job enrichment
C) flextime
D) job enlargement
E) job rotation

Question 31

Which of the following is the major drawback of job sharing from management's perspective?

A) increased costs for providing supporting infrastructure (such as desk and computer) to two employees instead of one
B) difficulty in finding compatible partners
C) increase in supervisory workload
D) difficulty in designing the reward structure
E) difficulty in coordinating schedules

Question 32

Telecommuting is an option that suits professionals like ________.

A) sales representatives
B) nurses
C) receptionists
D) analysts
E) trainers

Question 33

After the training and development manager at Add Worth, Nicole Hayes, resigned, the CEO has made it a priority that the position be filled soon by someone of equal expertise and experience as Nicole. To locate the right candidate, Jennifer Ray, the HR manager, has been contacting recruitment firms, checking job sites, and pushing for referrals from the employees. However, she has only found candidates with little or no experience in the field who were willing to work full time for the position. At the next meeting with the CEO, Jennifer proposes an alternative strategy; she suggests hiring two experienced candidates who are open to the idea of handling the training needs on a part-time basis as a team. The CEO listens to her proposal but is not too convinced by it. Which of the following, if true, would strengthen Jennifer's proposal to use work sharing for the vacant position?

A) The employees of the company on the work council have planned to demand the flextime option.
B) A rival firm recently adopted telecommuting to reduce administrative costs cutting into its bottom line.
C) A good proportion of the company's prized workforce comprises employees from the baby boomer generation who are set to retire in the impending future.
D) Trainers are exempted from the requirement of being at the office throughout the common core period of the workday.
E) The headhunting firms that Jennifer contacted are usually helpful in generating a good pool of potential candidates.

Question 34

The job characteristic model fails to consider the role ________ plays in employee motivation.

A) responsibility
B) social support
C) growth need
D) job design
E) meaningfulness

Question 35

Janice and Shane are both senior software analysts. They have worked together on projects for six years and get along very well. Janice is anticipating the arrival of her first child and will not be able to work on a full-time basis in the future. Shane is also contemplating opening his own business as a home media installation consultant and does not want to continue to work full time. They both need some income. Which of the following alternative job structures would be best for Janice and Shane?

A) telecommuting
B) job enlargement
C) job enrichment
D) job rotation
E) job sharing

Question 36

Which of the following is the distinct characteristic of participative management programs?

A) establishment of work councils
B) autocratic decision making
C) performance norms
D) joint decision making
E) representative participation

Question 37

Which of the following statements is true regarding job sharing?

A) It expands jobs by increasing the degree to which the worker controls the planning, execution, and evaluation of the work.
B) Job sharing is a method of job enrichment.
C) It allows two or more individuals to split a traditional 40-hour-a-week job.
D) It is also called cross-training.
E) It involves periodic shifting of an employee from one task to another with similar skill requirements at the same organizational level.

Question 38

Amanda McPherson is a working mother with one child and an ailing parent to look after in addition to her duties as a wife and job responsibilities as a legal consultant. Since Amanda always felt pressed for time, the news that the consultancy she worked for would allow her to work from home two days a week came as a great relief to her. She now feels more motivated to work for the company as the company has taken into account her personal and professional needs. The company has allowed Amanda to use the option of ________.

A) gainsharing
B) offshoring
C) homeshoring
D) work sharing
E) telecommuting

Question 39

An MNC in a developing country is operating amidst severe space constraints, and the infrastructural conditions in the city are bad, causing a lot of lost man-hours. Anticipating rapid growth in the months to come, the company has created a recruitment plan based on its revenue expectations. However, it wants to manage this expansion without undertaking an expensive physical expansion. Which of the following could be a solution for the company?

A) profit-sharing
B) gainsharing
C) codetermining
D) telecommuting
E) groupshifting

Question 40

The option of working at home at least 2 days a week on a computer linked to the employer's office is termed as ________.

A) social loafing
B) homeshoring
C) offshoring
D) telecommuting
E) work sharing

Question 41

Which of the following statements is true regarding gainsharing?

A) Gainsharing does not distribute profits, only gains in profits.
B) Gain sharing encourages social loafing.
C) Employees working under gainsharing plans have a greater feeling of psychological ownership.
D) Gainsharing focuses on productivity gains rather than profits.
E) Gainsharing involves paying employees based on the number of new skills acquired by them in a specific time period.

Question 42

Woodworth & Baines is a retail chain that has taken up numerous measures to improve employee attitude, motivation, and organizational performance. New training programs, employee engagement initiatives, and an employee welfare council were the three main strategies implemented as part of the employee empowerment program. Norman Kilner was one of twenty employees nominated to the employee welfare council where they were required to interact with the management to promote the interests of the employees. Additionally, the job roles of these twenty employees were vertically enhanced to give them more autonomy in the organization. However, six months into the employee empowerment program, a survey by HR revealed no actual change in employee attitudes. Similarly, a survey conducted by the production manager revealed that work productivity had not increased by any substantial measure either. Which of the following, if true, would best explain this outcome?

A) Management retained the degree of control they had in the organizational affairs.
B) Management implemented a 360-degree feedback system for performance appraisals.
C) The company moved from a merit-based to a piece-rate pay system in the last quarters.
D) The employees performed poorly because of the lack of training and development programs.
E) Management strengthened the regulations relating to employee absenteeism in this period.

Question 43

The main drawback of representative participation as an employee involvement measure is that ________.

A) it is consistent with the Theory Y view of motivation
B) it is primarily symbolic in its impact
C) it is a time-consuming process
D) it is able to exert its impact only in the short run
E) it is likely to require a major change in organizational roles

Question 44

Which of the following is Theory X consistent with?

A) the reduced need of supervision and direction from managers
B) the principles of participative management
C) the autocratic style of managing people
D) the use of recognition and achievements to motivate employees
E) the vertical enhancement of jobs to enhance autonomy

Question 45

What is an advantage of bonuses over merit-based pay plan?

A) Bonuses improve flexibility of the workforce.
B) Bonuses are paid based on a formula.
C) Bonuses improve performance of the group as a whole.
D) Employees don't view bonuses as a part of their salary.
E) Employees are rewarded for recent performance.

Question 46

The external competitiveness of an organization's pay relative to elsewhere in the industry is measured by its ________.

A) external liability
B) external costs
C) external equity
D) external benefit
E) external rotation

Question 47

Which of the following statements is true regarding a merit-based pay plan?

A) It distributes compensation based on an established formula designed around a company's profitability.
B) It bases pay levels on how many skills employees have or how many jobs they can do.
C) A typical merit-based pay plan provides no base salary and pays the employee only for what he or she produces.
D) Unions typically resist merit-based pay plan.
E) It is also called competency-based pay plan.

Question 48

Daichi Inc. is a Japanese software development firm known for its high quality products. Recently, the company held its annual conference and awarded all those employees who were in the top five percent with substantial monetary rewards. Their performance was evaluated on the basis of target achievement, client feedback, and quality ratings. Employees whose performance had not changed drastically were given a minor raise and those who faired badly received no incentives. Many employees blamed the company of creating differences among employees because they felt that it would harm the company in the long run, but Daichi Inc. truly believes that to retain and motivate its best performers, a large incentive is a good step. Daichi Inc. is using a(n) ________ here.

A) modular plan
B) employee stock ownership plan
C) flexible benefits plan
D) piece-rate plan
E) merit-based plan

Question 49

The two major forms of employee involvement are participative management and ________.

A) job rotation
B) job sharing
C) representative participation
D) organizational restructuring
E) job enlargement

Question 50

In which of the following variable-pay programs is the pay level based on how many skills employees have or how many jobs they can do?

A) skill-based pay
B) merit-based pay
C) piece-rate pay
D) gainsharing
E) bonuses

Question 51

The ________ pay plan has long been popular as a means of compensating production workers by paying a fixed sum for each unit of production completed.

A) merit-based
B) profit sharing
C) competency-based
D) gainsharing
E) piece-rate

Question 52

Which of the following represents a pay plan that rewards employees for recent performance rather than historical performance?

A) modular plans
B) flexible benefits
C) bonus
D) cafeteria plans
E) base salary

Question 53

________ bases a portion of an employee's pay on some individual and/or organizational measure of performance.

A) Flexible benefits program
B) Modular plans program
C) Guaranteed pay program
D) Variable-pay program
E) Base pay program

Question 54

Internal equity refers to the ________.

A) framework of tasks, duties, and responsibilities that the job involves
B) arrangement of the elements of different jobs in the organization
C) organization's pay relative to pay elsewhere in its industry
D) worth of the job to the organization
E) list of the knowledge, skills, and abilities required in a particular job

Question 55

A ________ plan distributes compensation based on some established formula designed around revenue of the company.

A) skill-based
B) profit-sharing
C) merit-based
D) piece-rate
E) competency-based

Question 56

________ is a formula-based group incentive plan that uses improvements in group productivity from one period to another to determine the total amount of money allocated.

A) Merit-based pay plan
B) Piece-rate pay plan
C) Gainsharing
D) Profit-sharing
E) Employee stock ownership plan

Question 57

Representative participation is characterized by ________.

A) a significant positive impact on employee morale and performance
B) democratic leadership behaviors
C) compliance with the legal need to redistribute power within organizations
D) open and honest two-way communication
E) joint decision making by employees and management

Question 58

A ________ pay plan pays for individual performance based on performance appraisal ratings.

A) employee stock ownership
B) merit-based
C) profit sharing
D) piece-rate
E) gainsharing

Question 59

The two most common forms of representative participation are ________ and board representatives.

A) cross-functional teams
B) task teams
C) work councils
D) employee unions
E) quality circles

Question 60

Which of the following is an example of a piece-rate plan?

A) $20 for each hour of work
B) stock options at cheaper prices
C) $2 for each unit produced
D) straight commission plan
E) spot bonuses

Question 61

Feedback is the degree to which carrying out work activities generates direct and clear information about one's own performance.

Question 62

Sally Peterson, who works as an entry-level editor, wants to go for dental reconstruction surgery and sent a query to her HR department asking for a list of preferred hospitals. The HR looked through her healthcare plan which provided only a minimum coverage for routine drugs and vision care. Consequently, the HR manager has recently informed her that if she wishes to carry on with the dental procedure, she will have to pay for it on her own. Which of the following healthcare plans should she avail to meet her needs?

A) a basic modular plan
B) a 401k plan
C) a standardized benefits package
D) a fringe benefits plan
E) a core-plus plan

Question 63

________ are predesigned packages or modules of benefits, each of which meets the needs of a specific group of employees.

A) Profit sharing plans
B) Flextime plans
C) Employee stock ownership plans
D) Modular plans
E) Merit-based plans

Question 64

Which of the following variable pay programs is free from dependence on company profits?

A) gainsharing
B) employee stock ownership plans
C) profit-sharing
D) bonuses
E) job sharing

Question 65

For employee stock ownership plans to be effective in improving performance, they must ________.

A) be based solely on productivity like gainsharing plans
B) be implemented such that employees psychologically experience ownership
C) be planned such that they are unaffected by company profitability
D) be based on the market compensation philosophy
E) be determined on the basis of performance appraisals and recent performance

Question 66

Which of the following is an example of an intrinsic reward?

A) profit-sharing plan
B) employee stock option
C) gainsharing
D) bonus
E) employee recognition

Question 67

Individualized rewards by allowing each employee to choose the compensation package that best satisfies his or her current needs and situation are called ________.

A) employee involvement programs
B) standardized benefits packages
C) employee recognition programs
D) flexible benefits plans
E) variable pay programs

Question 68

Core-plus plans consist of ________.

A) fractions of a company's profit margins determined on the basis of an established formula
B) monetary benefits which are linked to one's performance appraisals
C) pretax dollars up to the dollar amount offered in the plan that an employee sets apart to pay for particular benefits
D) essential benefits and a menu-like selection of other benefits that an employee can choose from
E) predesigned packages of benefits that an employee must accept as a whole

Question 69

Which of the following statements is true regarding flexible benefits?

A) Gainsharing and profit-sharing plans are two major types of flexible benefits.
B) Flexible benefits are awarded through uniform packages to cover the requirements of a married couple with two children.
C) Flexible benefits can be altered to meet employee needs based on age, marital status, and number and age of dependents.
D) Flexible benefits are given based on an employee's skills, competence, and productivity.
E) Flexible benefits are in accordance with the belief that employees have identical needs that must be rewarded identically.

Question 70

At Esco Retail, all employees are constantly driven to work hard. The company places maximum emphasis on stocking high quality goods and providing high quality service to retain the edge they have in the retail industry. To promote organizational commitment further, employees are incentivized by enabling them to purchase company shares at below-market prices as a part of their benefits. This mode of providing incentives represents the use of ________.

A) core-plus plans
B) flexible benefits plans
C) modular plans
D) employee stock ownership plans
E) merit-based plans

Question 71

Which of the following statements is true regarding employee recognition?

A) Critics argue that employee recognition programs are highly susceptible to political manipulation by management.
B) Centralized programs across multiple offices in different countries can hinder the process of employee recognition programs.
C) Employee recognition is an extrinsic reward.
D) Employee stock option is a more powerful workplace motivator than recognition.
E) Employee recognition programs are expensive.

Question 72

Task identity is defined as the degree to which a job requires a variety of different activities so the worker can use a number of different skills and talent.

Question 73

Jack Holmes is a middle-aged, lower-level employee at an automobile service center. Though he is not paid very well, he loves his job. His supervisor speaks to him with respect and he is the favored candidate for mentoring new employees because on the vast experience he holds in the job. Based on this information, which of the following is most likely to be the reason Jack likes his job?

A) salary
B) recognition
C) prospects of growth
D) flextime
E) job sharing

Question 74

An advantage of the ________ plan is that benefits accrue to groups of workers, high-performing workers pressure weaker performers to work harder, improving performance for the group as a whole.

A) gainsharing
B) skill-based pay
C) flexible benefits
D) profit-sharing
E) modular

Question 75

Which of the following statements is true regarding an employee stock ownership plan (ESOP)?

A) ESOPs are also called competency-based pay plans.
B) ESOPs are effective because, like bonuses, they reward recent performance.
C) There exists a strong correlation between ESOPs and employee performance.
D) The financial stake in the company is adequate to use ESOPs as an effective means to motivate employees.
E) Under this plan, employees acquire company shares often at below-market prices.

Question 76

John Dunker is one of the best firefighters in his squad and he recently received an award for his outstanding performance. From this information, it may be concluded that John's job has low task significance.

Question 77

The job characteristics model describes any job in terms of five core job dimensions and these five dimensions are skill variety, task significance, recognition, reward, and feedback.

Question 78

At Dortix, a manufacturing company, at the end of every quarter, the total production of each department is calculated, compared with the predetermined targets, and the rewards for each set of divisional employees is determined this way. Dortix uses a ________ plan to incentivize its employees.

A) profit-sharing
B) gainsharing
C) modular
D) bonus
E) core-plus

Question 79

Exsell is a popular consumer goods company known for hiring the best resources and using the best technology to produce an extensive range of goods. The manufacturing units consider productivity to be the only criterion; targets are upgraded, supervised, and rewarded amply. The groups with the highest productivity in each manufacturing unit owned by Exsell are incentivized using a substantial monthly monetary reward program. Of late, there have been some rumors about the company not doing very well in the market. Many claims of defective quality, declining market share, and employee unrest have been doing the rounds. However, the CEO of Exsell recently held a conference with the organization and the media to share its expansion plans for the coming year. He ended the conference with a discussion of how the profit margin of the company had grown substantially but many employees were left in doubt. Which of the following, if true, would indicate the need for Exsell to replace gainsharing with profit-sharing as a variable pay program for its employees?

A) The company has opened multiple product categories and is experiencing brand dilution.
B) The economy is showing signs of robust growth after last year's recession and losses.
C) Executives who receive and evaluate client feedback have found a lot of quality concerns with the products dispatched in recent times.
D) The company used a merit-based pay plan for decades to reward the employees who deserved recognition for good performance.
E) The consumer goods industry has traditionally had higher barriers to entry than other industries of similar size and reach.

Question 80

Flexible spending plans consist of ________.

A) no base salary and pays the employee only for what he or she produces on the basis of a fixed sum for each unit of production completed
B) a set of core of essential benefits and a menu-like selection of others from which employees can select
C) pretax dollars up to the dollar amount offered in the plan that an employee sets apart to pay for particular benefits
D) a fraction of a company's profit margins determined on the basis of an established formula
E) modules of benefits, each of which meets the needs of a specific group of employees