Question 1

Today, any plan that ties pay to productivity or profitability is called

Accepted Answer

A) competency-based pay. 
B) profit-sharing. 
C) variable pay. 
D) pay-for-performance. 
E) job-based pay.

Question 2

Popularized by Frederick Taylor, financial rewards paid to workers whose production exceeds some predetermined standard came into use in the late 1800s.These financial rewards are commonly referred to as

Accepted Answer

A) financial incentives. 
B) perquisites. 
C) piecework plans. 
D) group incentive plans. 
E) Taylor bonuses.

Question 3

Accurate performance appraisal is a precondition for effective variable pay plans.

Accepted Answer

A) True 
 B)False

Question 4

To determine eligibility in a short-term incentive program, a job-by-job review is conducted to identify the key jobs (typically only line jobs)that have measurable impact on profitability.This is called the criterion of

Accepted Answer

A) salary grade. 
B) position level. 
C) key position. 
D) salary level. 
E) industry requirements for piece rate production.

Question 5

Reasons why incentive plans do not work include all of the following except

Accepted Answer

A) firms do not get what they pay for. 
B) pay is not a motivator. 
C) performance pay cannot replace good management. 
D) rewards may undermine responsiveness. 
E) rewards rupture relationships.

Question 6

Professional employees almost always reach their positions through prolonged periods of

Accepted Answer

A) formal study. 
B) work experience. 
C) reference groups. 
D) political influence. 
E) informal networking.

Question 7

A type of incentive plan that is an organization-wide pay plan designed to reward employees for improvements in organizational productivity is

Accepted Answer

A) a group incentive program. 
B) variable pay. 
C) a profit-sharing plan. 
D) a spot bonus. 
E) a gainsharing program.

Question 8

The piecework plan is expressed in monetary terms, whereas the standard hour plan is expressed in

Accepted Answer

A) dollars per standard. 
B) profits. 
C) cents per unit of output. 
D) a premium that equals the percent by which his or her performance exceeds a standard. 
E) cents per hour.

Question 9

Because of the role managers play in determining divisional and corporate profitability, most employers pay their managers and executives some type of

Accepted Answer

A) hourly wage. 
B) gainsharing. 
C) salary. 
D) bonus or incentive. 
E) commission.

Question 10

Research suggests that employee stock ownership plans encourage employees to develop

Accepted Answer

A) concern about their retirement plan. 
B) an interest in gainsharing. 
C) a lack of interest in their job. 
D) a sense of ownership in and commitment to the firm. 
E) little interest in unions.

Question 11

A type of incentive plan that gives income over and above base salary to individual employees who meet a specific individual performance standard is a(n)

Accepted Answer

A) straight commission. 
B) individual incentive program. 
C) spot bonuses. 
D) profit-sharing plan. 
E) cash bonus system.

Question 12

When a target bonus is set for each eligible position and adjustments are then made for greater- or less-than-targeted performance, this is called

Accepted Answer

A) a lump-sum bonus. 
B) retirement income. 
C) an annual bonus. 
D) an individual award. 
E) gainsharing.

Question 13

Amish is the human resources professional at a software development company that has experienced high employee turnover over the past year.The CEO has asked him to explain the most likely primary cause of the turnover.Amish reports that recent research indicates that the number-one reason that employees leave an organization is

Accepted Answer

A) conflict with supervisor. 
B) low pay. 
C) lack of recognition and praise. 
D) poor leadership. 
E) unattractive benefits.

Question 14

All of the following are ways that employers use team or group incentive plans except

Accepted Answer

A) setting work standards for each member of the group and maintaining a count of the output of each member. 
B) setting a standard that all members receive payment equal to the 75th percentile of the group as a whole. 
C) broad criteria such as total labour-hours per final product. 
D) setting a production standard based on the final output of the group as a whole. 
E) choosing a measurable definition of group performance or productivity that the group can control.

Question 15

A type of incentive plan that generally is organization-wide and that provides employees with a share of the organization's profits in a specified period is a(n)

Accepted Answer

A) group incentive plan. 
B) semi-variable incentive plan. 
C) individual incentive plan. 
D) profit-sharing plan. 
E) gainsharing plan.

Question 16

Employers have put increasing emphasis on variable pay plans in order to maximize their return on human capital.

Accepted Answer

A) True 
 B)False

Question 17

A type of organization-wide incentive plan that engages many or all employees in a common effort to achieve a company's productivity objectives by sharing the resulting cost savings among employees and the company is referred to as a

Accepted Answer

A) gainsharing plan. 
B) common incentive plan. 
C) productivity plan. 
D) profit-sharing plan. 
E) cost savings plan.

Question 18

One adaptation of merit pay plans is merit raises that are

Accepted Answer

A) linked to group performance. 
B) paid in quarterly installments. 
C) linked to annual performance appraisals. 
D) paid in one lump sum once a year. 
E) linked to profit sharing.

Question 19

Aziz is the human resources professional at a consulting engineering company.He has been asked by the executive team to suggest incentives that would most likely motivate the junior engineers who have recently graduated from university and are generally in their mid to late 20's.Which of the following should Aziz suggest?

Accepted Answer

A) high-end fitness equipment 
B) on-site day care 
C) on-site elder care 
D) luxury cruises 
E) paid time off to volunteer for charitable organizations

Question 20

A plan in which a production standard is set for a specific work group and its members are paid incentives if the group exceeds the production standard, is known as a(n)

Accepted Answer

A) team or group incentive plan. 
B) standard hour plan. 
C) gainsharing. 
D) work group plan. 
E) excess production plan.

Exam 12: Pay-for-Performance and Financial Incentives