Question 1

Over the long run for employers, merit pay is an inexpensive and efficient method of compensation.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is a key element in designing a gain-sharing plan?

Accepted Answer

A) using a historical standard to calculate whether employees will receive an incentive payout 
B) ensuring that administration involves complex calculations which tend to be more accurate 
C) ensuring that all profits or savings generated are paid only to the management 
D) factoring in environmental influences on performance which are not controllable by plan participants 
E) limiting employee involvement in the implementation of the plan in order to avoid complications 
A) using a historical standard to calculate whether employees will receive an incentive payout 
B) ensuring that administration involves complex calculations which tend to be more accurate 
C) ensuring that all profits or savings generated are paid only to the management 
D) factoring in environmental influences on performance which are not controllable by plan participants 
E) limiting employee involvement in the implementation of the plan in order to avoid complications

Question 3

A provides two different ways of progressing in an organization, each reflecting different types of contributions to an organization's mission.

Accepted Answer

A) maturity curve 
B) learning curve 
C) balanced scorecard 
D) broad-based option plan 
E) dual career track 
A) maturity curve 
B) learning curve 
C) balanced scorecard 
D) broad-based option plan 
E) dual career track

Question 4

A(n)is an incentive plan that includes reductions in base pay in unsuccessful years.

Accepted Answer

A) profit-sharing plan 
B) gain-sharing plan 
C) broad-based option plan 
D) Scanlon plan 
E) earnings-at-risk plan 
A) profit-sharing plan 
B) gain-sharing plan 
C) broad-based option plan 
D) Scanlon plan 
E) earnings-at-risk plan

Question 5

An individual incentive payment plan can be described as:

Accepted Answer

A) a pay for some objective, pre-established level of performance 
B) an increase in base pay based on an employee's seniority 
C) a pay increase given to employees for unexpected exceptional performance on a special project 
D) a lump sum payment to an employee based on organizational performance 
E) a form of pay determined by group level performance 
A) a pay for some objective, pre-established level of performance 
B) an increase in base pay based on an employee's seniority 
C) a pay increase given to employees for unexpected exceptional performance on a special project 
D) a lump sum payment to an employee based on organizational performance 
E) a form of pay determined by group level performance

Question 6

Maturity curves reflect the relationship between scientist/engineer compensation and years of experience in the labour market.

Accepted Answer

A) True 
 B)False

Question 7

Stock options are valuable when they have exercise prices higher than the current market value.

Accepted Answer

A) True 
 B)False

Question 8

Historically, _ have been the most widely used performance indicator for group incentive plans.

Accepted Answer

A) capability-focused measures 
B) financial measures 
C) customer-focused measures 
D) internal process-focused measures 
E) resource utilization measures 
A) capability-focused measures 
B) financial measures 
C) customer-focused measures 
D) internal process-focused measures 
E) resource utilization measures

Question 9

Explain the "free-rider" problem associated with group compensation systems.

Accepted Answer

Group compensation systems suffer from w

Question 10

Companies are now placing more and more emphasis on incentives at the expense of base salary.

Accepted Answer

A) True 
 B)False

Question 11

The most frequently implemented individual incentive system is a standard hour plan.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is a problem with group compensation systems?

Accepted Answer

A) There is very little room for variation in designing group incentive plans. 
B) At least one person in the group does not carry his or her share of the load. 
C) Team membership constantly changes as teams are eager to share their star performers and take on new employees. 
D) If teams are defined at a very narrow level, much of the motivational impact of incentives is lost. 
E) Group incentive plans are often too simplistic and do not accurately reflect the efforts of the group. 
A) There is very little room for variation in designing group incentive plans. 
B) At least one person in the group does not carry his or her share of the load. 
C) Team membership constantly changes as teams are eager to share their star performers and take on new employees. 
D) If teams are defined at a very narrow level, much of the motivational impact of incentives is lost. 
E) Group incentive plans are often too simplistic and do not accurately reflect the efforts of the group.

Question 13

With lump-sum bonuses, employees receive an end-of year bonus that builds into base pay.

Accepted Answer

A) True 
 B)False

Question 14

What are lump-sum bonuses? What advantages do they have when compared to merit pay?

Accepted Answer

In the case of lump-sum bonuses, based o

Question 15

Lump-sum bonuses are:

Accepted Answer

A) viewed more as an entitlement than merit pay 
B) more expensive than merit pay over the long run 
C) awarded for exceptional performance on special projects 
D) focused on providing consistent increments in base pay through the year 
E) end-of-year bonuses that do not build into base pay 
A) viewed more as an entitlement than merit pay 
B) more expensive than merit pay over the long run 
C) awarded for exceptional performance on special projects 
D) focused on providing consistent increments in base pay through the year 
E) end-of-year bonuses that do not build into base pay

Question 16

Which of the following is NOT a factor that influences the design of sales compensation packages?

Accepted Answer

A) size of the sales force 
B) competitor practices 
C) organizational strategy 
D) the nature of people who enter the sales profession 
E) the product to be sold 
A) size of the sales force 
B) competitor practices 
C) organizational strategy 
D) the nature of people who enter the sales profession 
E) the product to be sold

Question 17

What are executive perquisites?

Accepted Answer

Perquisites, or "perks," are designed to

Question 18

Which of the following is a disadvantage of individualized incentive plans?

Accepted Answer

A) more direct supervision is required to maintain reasonable levels of output 
B) earnings of workers are reduced 
C) costing and budgetary control are impeded 
D) levels of mistrust between managers and workers are elevated 
E) production costs are raised 
A) more direct supervision is required to maintain reasonable levels of output 
B) earnings of workers are reduced 
C) costing and budgetary control are impeded 
D) levels of mistrust between managers and workers are elevated 
E) production costs are raised

Question 19

What is the main difference between a Scanlon plan and a Rucker plan?

Accepted Answer

A) A Scanlon plan involves a less complex formula than a Rucker plan for determining worker incentive bonuses. 
B) A Scanlon plan requires worker committees while a Rucker plan does not. 
C) A Scanlon plan is a gain-sharing plan while a Rucker plan is an individualized incentive plan. 
D) A Scanlon plan is dependent on productivity norms while a Rucker plan works better without them. 
E) A Scanlon plan focuses on reducing labour costs, while a Rucker plan focuses on increasing labour costs. 
A) A Scanlon plan involves a less complex formula than a Rucker plan for determining worker incentive bonuses. 
B) A Scanlon plan requires worker committees while a Rucker plan does not. 
C) A Scanlon plan is a gain-sharing plan while a Rucker plan is an individualized incentive plan. 
D) A Scanlon plan is dependent on productivity norms while a Rucker plan works better without them. 
E) A Scanlon plan focuses on reducing labour costs, while a Rucker plan focuses on increasing labour costs.

Question 20

Which of the following is an example of a long-term incentive in an executive compensation package?

Accepted Answer

A) low-cost loans 
B) bonuses 
C) pension plans 
D) base pay 
E) stock options 
A) low-cost loans 
B) bonuses 
C) pension plans 
D) base pay 
E) stock options

Over the long run for employers, merit pay is an inexpensive and efficient method of compensation.

Which of the following is a key element in designing a gain-sharing plan?

A provides two different ways of progressing in an organization, each reflecting different types of contributions to an organization's mission.

A(n)is an incentive plan that includes reductions in base pay in unsuccessful years.

An individual incentive payment plan can be described as:

Maturity curves reflect the relationship between scientist/engineer compensation and years of experience in the labour market.

Stock options are valuable when they have exercise prices higher than the current market value.

Historically, _ have been the most widely used performance indicator for group incentive plans.

Explain the "free-rider" problem associated with group compensation systems.

Companies are now placing more and more emphasis on incentives at the expense of base salary.

The most frequently implemented individual incentive system is a standard hour plan.

Which of the following is a problem with group compensation systems?

With lump-sum bonuses, employees receive an end-of year bonus that builds into base pay.

What are lump-sum bonuses? What advantages do they have when compared to merit pay?

Lump-sum bonuses are:

Which of the following is NOT a factor that influences the design of sales compensation packages?

What are executive perquisites?

Which of the following is a disadvantage of individualized incentive plans?

What is the main difference between a Scanlon plan and a Rucker plan?

Which of the following is an example of a long-term incentive in an executive compensation package?

The Pay Model

Strategy: the Totality of Decisions

Defining Internal Alignment

Job Analysis

Job-Based Structures and Job Evaluation

Person-Based Pay Structures

Defining Competitiveness

Designing Pay Levels, Pay Mix, and Pay Structures

Employee Benefits

Pay for Performance: Performance Appraisal and Plan Design

The Role of Governments and Unions in Compensation

Compensation Budgets and Administration

Filters

Exam 11: Pay-For-Performance Plans

Over the long run for employers, merit pay is an inexpensive and efficient method of compensation.

Which of the following is a key element in designing a gain-sharing plan?

A provides two different ways of progressing in an organization, each reflecting different types of contributions to an organization's mission.

A(n)is an incentive plan that includes reductions in base pay in unsuccessful years.

An individual incentive payment plan can be described as:

Maturity curves reflect the relationship between scientist/engineer compensation and years of experience in the labour market.

Stock options are valuable when they have exercise prices higher than the current market value.

Historically, _ have been the most widely used performance indicator for group incentive plans.

Explain the "free-rider" problem associated with group compensation systems.

Companies are now placing more and more emphasis on incentives at the expense of base salary.

The most frequently implemented individual incentive system is a standard hour plan.

Which of the following is a problem with group compensation systems?

With lump-sum bonuses, employees receive an end-of year bonus that builds into base pay.

What are lump-sum bonuses? What advantages do they have when compared to merit pay?

Lump-sum bonuses are:

Which of the following is NOT a factor that influences the design of sales compensation packages?

What are executive perquisites?

Which of the following is a disadvantage of individualized incentive plans?

What is the main difference between a Scanlon plan and a Rucker plan?

Which of the following is an example of a long-term incentive in an executive compensation package?

The Pay Model

Strategy: the Totality of Decisions

Defining Internal Alignment

Job Analysis

Job-Based Structures and Job Evaluation

Person-Based Pay Structures

Defining Competitiveness

Designing Pay Levels, Pay Mix, and Pay Structures

Employee Benefits

Pay for Performance: Performance Appraisal and Plan Design

The Role of Governments and Unions in Compensation

Compensation Budgets and Administration

Filters