Question 1

______ refer to decisions about whether to join or remain with the organization.

Accepted Answer

A) Membership behaviours 
B) Identification behaviours 
C) Organizational gregariousness 
D) Associative habits

Question 2

Which type of compensation program attracts learning-oriented employees?

Accepted Answer

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

Question 3

Individual incentive plans are relatively rare for all but one of the following reasons.Name the exception.

Accepted Answer

A) Because many jobs have no physical output measures. 
B) Because there are many potential administrative problems. 
C) Because such plans are inconsistent with the goals of acquiring multiple skills and proactive problem solving. 
D) Because employees generally do not favour such plans due to their lack of distributive justice.

Question 4

Communication of compensation issues is argued to represent a strategic opportunity for an organization to distinguish itself from its competition.Why is this so?

Accepted Answer

The answer of Communication of compensation issues is argued to...

Question 5

In a(n)_____ plan,payments are based on a measure of organizational performance and do not become part of the employees' base salary.

Accepted Answer

A) ESOP 
B) profit sharing 
C) individual incentive 
D) merit pay

Question 6

Which of the following is not a feature of outcome-oriented principal-agent contracts?

Accepted Answer

A) When profits are high,compensation goes up. 
B) The principal must invest in monitoring information. 
C) Agents require a compensating wage differential. 
D) Risk is increased for the agent.

Question 7

In agency theory,the _____ seeks to direct the behaviour of the _____.

Accepted Answer

A) owner;principal 
B) agent;principal 
C) manager;agent 
D) principal;agent

Question 8

Employee involvement in the design and implementation of pay policies has been linked to higher pay satisfaction and job satisfaction.

Accepted Answer

A) True 
 B)False

Question 9

The reinforcement theory to compensation management suggests that managers pay at-or below-market wages.

Accepted Answer

A) True 
 B)False

Question 10

Share options have their greatest motivational potential during periods of

Accepted Answer

A) high unemployment. 
B) downturns in the economy. 
C) high economic and company growth. 
D) low inflation.

Question 11

A criticism of merit pay programs is that the differential in pay between high performers and mediocre,or even poor performers is not significant enough to influence employee behaviour or attitudes.

Accepted Answer

A) True 
 B)False

Question 12

Of the following pay programs,the weakest link between employees' performance and their earnings is found in

Accepted Answer

A) individual incentive plans. 
B) merit pay plans. 
C) profit-sharing plans. 
D) group incentive plans.

Question 13

Gainsharing plans differ from profit-sharing plans in that they

Accepted Answer

A) distribute payouts more frequently. 
B) encourage employee pursuit of organizational goals. 
C) pay lump sum payments. 
D) can be attached to all types of jobs in the organization.

Question 14

Which one of the following is not a necessary organizational condition for successful gainsharing?

Accepted Answer

A) Management commitment 
B) Mechanistic structure 
C) Employment security 
D) Information sharing on productivity and costs

Question 15

One solution to profit-sharing during a downturn is to design plans that have downside risk but not upside risk.

Accepted Answer

A) True 
 B)False

Question 16

Relying too heavily on profit-sharing and gainsharing plans may

Accepted Answer

A) decrease cooperation and concern for the welfare of the entire plant or organization,but it may increase individual work motivation to acceptable levels. 
B) increase cooperation and concern for the welfare of the entire plant or organization and increase individual work motivation to acceptable levels. 
C) decrease cooperation and concern for the welfare of the entire plant or organization,but it may reduce individual work motivation to unacceptable levels. 
D) increase cooperation and concern for the welfare of the entire plant or organization,but it may reduce individual work motivation to unacceptable levels.

Question 17

The performance motivational effects of either profit sharing or gainsharing are likely to be greater in smaller firms or units than in larger organizations or units.

Accepted Answer

A) True 
 B)False

Question 18

Incentive pay refers to linking annual pay increases to performance appraisal ratings.

Accepted Answer

A) True 
 B)False

Question 19

Why is it useful for organizations to think in terms of designing a mix of programs rather than choosing one overall compensation program? Give examples.

Accepted Answer

The answer of Why is it useful for organizations to...

Question 20

Relying exclusively on merit pay or individual incentives may result in

Accepted Answer

A) high levels of work motivation but unacceptable levels of individualistic and competitive behaviour and too little concern for broader plant or organization goals. 
B) low levels of work motivation but acceptable levels of individualistic and competitive behaviour and no regard for broader plant or organization goals. 
C) a perfect balance of work motivation and acceptable levels of individualistic and competitive behaviour. 
D) high levels of work motivation,acceptable levels of individualistic and competitive behaviour and high levels of concern for broader plant or organization goals.

Exam 9: Recognizing Employee Contributions With Pay

______ refer to decisions about whether to join or remain with the organization.

Which type of compensation program attracts learning-oriented employees?

Individual incentive plans are relatively rare for all but one of the following reasons.Name the exception.

Communication of compensation issues is argued to represent a strategic opportunity for an organization to distinguish itself from its competition.Why is this so?

In a(n) _____ plan,payments are based on a measure of organizational performance and do not become part of the employees' base salary.

Which of the following is not a feature of outcome-oriented principal-agent contracts?

In agency theory,the _ seeks to direct the behaviour of the _.

Employee involvement in the design and implementation of pay policies has been linked to higher pay satisfaction and job satisfaction.

The reinforcement theory to compensation management suggests that managers pay at-or below-market wages.

Share options have their greatest motivational potential during periods of

A criticism of merit pay programs is that the differential in pay between high performers and mediocre,or even poor performers is not significant enough to influence employee behaviour or attitudes.

Of the following pay programs,the weakest link between employees' performance and their earnings is found in

Gainsharing plans differ from profit-sharing plans in that they

Which one of the following is not a necessary organizational condition for successful gainsharing?

One solution to profit-sharing during a downturn is to design plans that have downside risk but not upside risk.

Relying too heavily on profit-sharing and gainsharing plans may

The performance motivational effects of either profit sharing or gainsharing are likely to be greater in smaller firms or units than in larger organizations or units.

Incentive pay refers to linking annual pay increases to performance appraisal ratings.

Why is it useful for organizations to think in terms of designing a mix of programs rather than choosing one overall compensation program? Give examples.

Relying exclusively on merit pay or individual incentives may result in