Question 1

Noncash incentive awards are most effective as motivators when the award is tied to performance and supports the firm's goals

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is NOT an advantage of an incentive pay program?

Accepted Answer

A) Incentives focus employee efforts on specific performance targets. 
B) Incentives are a way to increase equity and justice in an organization. 
C) Incentives are a way to distribute success among those not responsible for producing that success. 
D) Incentives are a means to reward or attract top performers when salary budgets are low. 
A) Incentives focus employee efforts on specific performance targets. 
B) Incentives are a way to increase equity and justice in an organization. 
C) Incentives are a way to distribute success among those not responsible for producing that success. 
D) Incentives are a means to reward or attract top performers when salary budgets are low.

Question 3

The purpose of a profit-sharing plan is to

Accepted Answer

A) allow workers to contribute specific knowledge to improving the organization. 
B) give employees the opportunity to increase their earnings. 
C) enable workers to share in labor cost savings. 
D) instill commitment to the employee's immediate work group. 
A) allow workers to contribute specific knowledge to improving the organization. 
B) give employees the opportunity to increase their earnings. 
C) enable workers to share in labor cost savings. 
D) instill commitment to the employee's immediate work group.

Question 4

Contemporary reasons given by organizations for implementing incentive plans are

Accepted Answer

A) improving or maintaining high levels of productivity. 
B) focusing employee efforts on specific performance targets. 
C) linking compensation rewards to the achievement of results. 
D) all of the above. 
A) improving or maintaining high levels of productivity. 
B) focusing employee efforts on specific performance targets. 
C) linking compensation rewards to the achievement of results. 
D) all of the above.

Question 5

A reward given to a consumer service representative who put in extra effort to fill a new customer's large order, even though this was not specifically tied to the employee's performance standards, is a

Accepted Answer

A) piece rate. 
B) differential piece rate. 
C) merit pay. 
D) spot bonus. 
A) piece rate. 
B) differential piece rate. 
C) merit pay. 
D) spot bonus.

Question 6

An analysis of executive salaries shows that the largest portion of executive pay is received in long-term incentive rewards and bonuses.

Accepted Answer

A) True 
 B)False

Question 7

The standard hour plan provides bonus payment for completing work in less than the specified time.

Accepted Answer

A) True 
 B)False

Question 8

One drawback to straight commission plans is that they may induce salespeople to grant price concessions.

Accepted Answer

A) True 
 B)False

Question 9

A major problem of employee stock ownership plans is that

Accepted Answer

A) motivation of employees is rarely achieved. 
B) employees view it as a form of management control. 
C) it places employees' pensions at risk. 
D) it can be damaging to the financial well-being of an organization. 
A) motivation of employees is rarely achieved. 
B) employees view it as a form of management control. 
C) it places employees' pensions at risk. 
D) it can be damaging to the financial well-being of an organization.

Question 10

The performance threshold in incentive pay programs is

Accepted Answer

A) the minimum level an employee must reach in order to qualify for fixed pay. 
B) the minimum level an employee must reach in order to qualify for variable pay. 
C) an organizational objective that signifies profitability. 
D) a customized incentive plan which measures employee output and rewards exceptional employee performance. 
A) the minimum level an employee must reach in order to qualify for fixed pay. 
B) the minimum level an employee must reach in order to qualify for variable pay. 
C) an organizational objective that signifies profitability. 
D) a customized incentive plan which measures employee output and rewards exceptional employee performance.

Question 11

Stock options are rights attached to the achievement of specific organizational objectives.

Accepted Answer

A) True 
 B)False

Question 12

The greatest influence on executive base salary is most likely

Accepted Answer

A) the amount of short-term incentives received. 
B) the amount of long-term incentives received. 
C) the levels of competitive salaries in the job market. 
D) the time spent in the occupation. 
A) the amount of short-term incentives received. 
B) the amount of long-term incentives received. 
C) the levels of competitive salaries in the job market. 
D) the time spent in the occupation.

Question 13

Which of the following is NOT one of the reasons why variable pay plans may not achieve their proposed objectives or lead to organizational improvements?

Accepted Answer

A) Failure of incentive plans to satisfy employee expectations for pay gains 
B) Employment of employee and management committees to gain cost-reduction improvements 
C) Failure of management in giving adequate attention to the design and implementation of a plan 
D) Limited ability of employees to affect performance standards 
A) Failure of incentive plans to satisfy employee expectations for pay gains 
B) Employment of employee and management committees to gain cost-reduction improvements 
C) Failure of management in giving adequate attention to the design and implementation of a plan 
D) Limited ability of employees to affect performance standards

Question 14

A problem often encountered with merit raises is that employees may not believe that their compensation is tied to effort and performance, and they may not be able to differentiate between merit pay and other types of pay increases.

Accepted Answer

A) True 
 B)False

Question 15

For incentive plans to work effectively, employees must see a clear connection between the incentive payments they receive and their performance.

Accepted Answer

A) True 
 B)False

Question 16

Robix notified all employees that for the next 60 days, employees can purchase up to 200 shares of stock in the company at the price at which it closed at the end of yesterday's trading day, which was $38, regardless of any price fluctuations in the market. Robix is using __________ to incentivize its employees.

Accepted Answer

A) bonuses 
B) stock options 
C) benefits 
D) perquisites 
A) bonuses 
B) stock options 
C) benefits 
D) perquisites

Question 17

Rate busting refers to

Accepted Answer

A) an increase in productivity due to external competition. 
B) an increase in output that results in the disapproval of fellow employees. 
C) setting incentive performance standards for employees. 
D) a decrease in productivity due to lack of motivation. 
A) an increase in productivity due to external competition. 
B) an increase in output that results in the disapproval of fellow employees. 
C) setting incentive performance standards for employees. 
D) a decrease in productivity due to lack of motivation.

Question 18

The compensation committee at Robix needs to justify its large executive compensation packages. They might use all of the following arguments EXCEPT

Accepted Answer

A) effective executives create shareholder value. 
B) good executive talent is in great demand. 
C) the pay gap between the CEO and employees builds credibility. 
D) large incentives reward superior performance. 
A) effective executives create shareholder value. 
B) good executive talent is in great demand. 
C) the pay gap between the CEO and employees builds credibility. 
D) large incentives reward superior performance.

Question 19

A grant of units equal in value to fair market value or book value of a share of stock is known as

Accepted Answer

A) stock appreciation rights. 
B) a stock purchase. 
C) restricted stock. 
D) phantom stock. 
A) stock appreciation rights. 
B) a stock purchase. 
C) restricted stock. 
D) phantom stock.

Question 20

ESOPs have been criticized because a pensioner can become dependent on the stock price.

Accepted Answer

A) True 
 B)False

Noncash incentive awards are most effective as motivators when the award is tied to performance and supports the firm's goals

Which of the following is NOT an advantage of an incentive pay program?

The purpose of a profit-sharing plan is to

Contemporary reasons given by organizations for implementing incentive plans are

A reward given to a consumer service representative who put in extra effort to fill a new customer's large order, even though this was not specifically tied to the employee's performance standards, is a

An analysis of executive salaries shows that the largest portion of executive pay is received in long-term incentive rewards and bonuses.

The standard hour plan provides bonus payment for completing work in less than the specified time.

One drawback to straight commission plans is that they may induce salespeople to grant price concessions.

A major problem of employee stock ownership plans is that

The performance threshold in incentive pay programs is

Stock options are rights attached to the achievement of specific organizational objectives.

The greatest influence on executive base salary is most likely

Which of the following is NOT one of the reasons why variable pay plans may not achieve their proposed objectives or lead to organizational improvements?

A problem often encountered with merit raises is that employees may not believe that their compensation is tied to effort and performance, and they may not be able to differentiate between merit pay and other types of pay increases.

For incentive plans to work effectively, employees must see a clear connection between the incentive payments they receive and their performance.

Rate busting refers to

The compensation committee at Robix needs to justify its large executive compensation packages. They might use all of the following arguments EXCEPT

A grant of units equal in value to fair market value or book value of a share of stock is known as

ESOPs have been criticized because a pensioner can become dependent on the stock price.

The Rewards and Challenges of Human Resources Management

Strategy and Human Resources Planning

Equal Employment Opportunity and Human Resources Management

Job Analysis and Job Design

Expanding the Talent Pool: Recruitment and Careers

Employee Selection

Training and Development

Performance Management

Managing Compensation

Employee Benefits

Promoting Safety and Health

Employees Rights and Discipline

The Dynamics of Labor Relations

International Human Resources Management

Implementing HR Strategy: High-Performance Work Systems

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Exam 10: Pay-For-Performance: Incentive Rewards

Noncash incentive awards are most effective as motivators when the award is tied to performance and supports the firm's goals

Which of the following is NOT an advantage of an incentive pay program?

The purpose of a profit-sharing plan is to

Contemporary reasons given by organizations for implementing incentive plans are

A reward given to a consumer service representative who put in extra effort to fill a new customer's large order, even though this was not specifically tied to the employee's performance standards, is a

An analysis of executive salaries shows that the largest portion of executive pay is received in long-term incentive rewards and bonuses.

The standard hour plan provides bonus payment for completing work in less than the specified time.

One drawback to straight commission plans is that they may induce salespeople to grant price concessions.

A major problem of employee stock ownership plans is that

The performance threshold in incentive pay programs is

Stock options are rights attached to the achievement of specific organizational objectives.

The greatest influence on executive base salary is most likely

Which of the following is NOT one of the reasons why variable pay plans may not achieve their proposed objectives or lead to organizational improvements?

A problem often encountered with merit raises is that employees may not believe that their compensation is tied to effort and performance, and they may not be able to differentiate between merit pay and other types of pay increases.

For incentive plans to work effectively, employees must see a clear connection between the incentive payments they receive and their performance.

Rate busting refers to

The compensation committee at Robix needs to justify its large executive compensation packages. They might use all of the following arguments EXCEPT

A grant of units equal in value to fair market value or book value of a share of stock is known as

ESOPs have been criticized because a pensioner can become dependent on the stock price.

The Rewards and Challenges of Human Resources Management

Strategy and Human Resources Planning

Equal Employment Opportunity and Human Resources Management

Job Analysis and Job Design

Expanding the Talent Pool: Recruitment and Careers

Employee Selection

Training and Development

Performance Management

Managing Compensation

Employee Benefits

Promoting Safety and Health

Employees Rights and Discipline

The Dynamics of Labor Relations

International Human Resources Management

Implementing HR Strategy: High-Performance Work Systems

Filters