Question 1

Spot bonuses are usually provided for some employee effort that is not directly tied to an established performance standard.

Accepted Answer

A) True 
 B)False

Question 2

For incentive plans to be successful, one of the most critical requirements is that managers be willing to grant incentives based on differences in individuals, teams, or organizational criteria.

Accepted Answer

A) True 
 B)False

Question 3

According to research, which of the following best describes incentive plans?

Accepted Answer

A)  They can contribute to organizational performance if certain conditions are met. 
B)  They usually improve organizational performance by at least 10 percent 
C)  They usually lead to negative outcomes such as confusion and competition. 
D)  They tend to drive up organizational costs and decrease profits because more pay has to be given to employees. 
A)  They can contribute to organizational performance if certain conditions are met. 
B)  They usually improve organizational performance by at least 10 percent 
C)  They usually lead to negative outcomes such as confusion and competition. 
D)  They tend to drive up organizational costs and decrease profits because more pay has to be given to employees.

Question 4

Which of the following is an advantage of merit increases on a lump-sum basis?

Accepted Answer

A)  They do not contribute to escalating base salary levels. 
B)  They add a permanent sum to the base salary. 
C)  They are done in conjunction with promotions. 
D)  They reflect annual adjustments in base salary. 
A)  They do not contribute to escalating base salary levels. 
B)  They add a permanent sum to the base salary. 
C)  They are done in conjunction with promotions. 
D)  They reflect annual adjustments in base salary.

Question 5

Peter Drucker, the management expert, has argued that CEO pay should not be more than 20 times that of the rank-and-file employee. What did his concern focus on?

Accepted Answer

A)  the pay gap between CEOs and employees 
B)  the perks that CEOs enjoy 
C)  the need to raise the minimum wage for workers 
D)  the relative basic education of executives versus the increasing sophistication of employees' knowledge 
A)  the pay gap between CEOs and employees 
B)  the perks that CEOs enjoy 
C)  the need to raise the minimum wage for workers 
D)  the relative basic education of executives versus the increasing sophistication of employees' knowledge

Question 6

Which of the following is NOT an important component of a meaningful gainsharing plan?

Accepted Answer

A)  establishing fair and precise measurement standards 
B)  ensuring that bonus payout formulas are easy to calculate 
C)  ensuring that bonus payouts are large enough to encourage future employee effort 
D)  registering the plan with appropriate federal authorities 
A)  establishing fair and precise measurement standards 
B)  ensuring that bonus payout formulas are easy to calculate 
C)  ensuring that bonus payouts are large enough to encourage future employee effort 
D)  registering the plan with appropriate federal authorities

Question 7

In stock option plans, what does the difference in the grant price and the exercised price represent?

Accepted Answer

A)  profits to the firm 
B)  the gains by the stock option 
C)  a loss to the firm 
D)  the earnings through profit sharing 
A)  profits to the firm 
B)  the gains by the stock option 
C)  a loss to the firm 
D)  the earnings through profit sharing

Question 8

Professional employees are difficult to develop incentive plans for only because their outputs are difficult to measure.

Accepted Answer

A) True 
 B)False

Question 9

Naveen works as a sales representative for Rogers Pet Foods. He is on a commission plan. His individual performance has been steady over the past few months but he has noticed a decline in his pay. Which of the following is NOT a likely cause for Naveen's pay decline?

Accepted Answer

A)  Changes in the economy. 
B)  Increased competition from rival pet food suppliers. 
C)  His intrinsic motivation. 
D)  Seasonal fluctuations in the demand for pet food. 
A)  Changes in the economy. 
B)  Increased competition from rival pet food suppliers. 
C)  His intrinsic motivation. 
D)  Seasonal fluctuations in the demand for pet food.

Question 10

Which of the following would NOT be a problem with merit raises?

Accepted Answer

A)  if they are based upon objective, measurable criteria 
B)  if they are based upon the rise in the cost of living 
C)  if they are based on subjective performance appraisals 
D)  if they are tied to the length of service of the employee 
A)  if they are based upon objective, measurable criteria 
B)  if they are based upon the rise in the cost of living 
C)  if they are based on subjective performance appraisals 
D)  if they are tied to the length of service of the employee

Question 11

Which of the following pay plans can be plagued by the "free-rider" effect?

Accepted Answer

A)  piece rates 
B)  team incentives 
C)  base pay 
D)  retirement plans 
A)  piece rates 
B)  team incentives 
C)  base pay 
D)  retirement plans

Question 12

If the standard time for producing one unit of work in a job paying $5.00 per hour were set at 6 minutes, what would the piece rate be?

Accepted Answer

A)  $1.00 per unit 
B)  $1.50 per unit 
C)  $0.50 per unit 
D)  $0.75 per unit 
A)  $1.00 per unit 
B)  $1.50 per unit 
C)  $0.50 per unit 
D)  $0.75 per unit

Question 13

Employers use stock ownership incentive plans to increase employee "ownership" in the company.

Accepted Answer

A) True 
 B)False

Question 14

Approximately 50 percent of Canadian companies offer some form of variable pay.

Accepted Answer

A) True 
 B)False

Question 15

What is the purpose of a profit-sharing plan?

Accepted Answer

A)  to allow workers to contribute ideas and suggestions 
B)  to motivate a total commitment to the organization as a whole 
C)  to enable workers to share in labour cost savings 
D)  to instill commitment to the employee's immediate work group 
A)  to allow workers to contribute ideas and suggestions 
B)  to motivate a total commitment to the organization as a whole 
C)  to enable workers to share in labour cost savings 
D)  to instill commitment to the employee's immediate work group

Question 16

When employees receive a higher rate of pay for all of their work if production exceeds a standard level of output, which incentive plan are they are working?

Accepted Answer

A)  differential piece rate 
B)  standard piece rate 
C)  exception bonus rate 
D)  individual rate pay 
A)  differential piece rate 
B)  standard piece rate 
C)  exception bonus rate 
D)  individual rate pay

Question 17

Lump-sum merit pay does not contribute to escalating base salary levels.

Accepted Answer

A) True 
 B)False

Question 18

Meshing compensation and organizational objectives helps employees assume ownership of their jobs, improve effort, and improve performance.

Accepted Answer

A) True 
 B)False

Question 19

Sales incentives can be affected by external factors beyond the salesperson's control.

Accepted Answer

A) True 
 B)False

Question 20

Elizabeth received a stellar performance appraisal in 2008, which translated to a 10 percent pay raise for the next year. Her 2008 base pay was $50,000. Which of the following applies to 2009?

Accepted Answer

A)  Her employer would give her a bonus of $5,000. 
B)  Her pay would remain $50,000 but she would most likely get a promotion. 
C)  Her employer would add 10 percent to all her 2008 compensation components-base pay, incentives, benefits, and perks. 
D)  $5,000 would be added to her 2008 base pay. 
A)  Her employer would give her a bonus of $5,000. 
B)  Her pay would remain $50,000 but she would most likely get a promotion. 
C)  Her employer would add 10 percent to all her 2008 compensation components-base pay, incentives, benefits, and perks. 
D)  $5,000 would be added to her 2008 base pay.

Spot bonuses are usually provided for some employee effort that is not directly tied to an established performance standard.

For incentive plans to be successful, one of the most critical requirements is that managers be willing to grant incentives based on differences in individuals, teams, or organizational criteria.

According to research, which of the following best describes incentive plans?

Which of the following is an advantage of merit increases on a lump-sum basis?

Peter Drucker, the management expert, has argued that CEO pay should not be more than 20 times that of the rank-and-file employee. What did his concern focus on?

Which of the following is NOT an important component of a meaningful gainsharing plan?

In stock option plans, what does the difference in the grant price and the exercised price represent?

Professional employees are difficult to develop incentive plans for only because their outputs are difficult to measure.

Naveen works as a sales representative for Rogers Pet Foods. He is on a commission plan. His individual performance has been steady over the past few months but he has noticed a decline in his pay. Which of the following is NOT a likely cause for Naveen's pay decline?

Which of the following would NOT be a problem with merit raises?

Which of the following pay plans can be plagued by the "free-rider" effect?

If the standard time for producing one unit of work in a job paying $5.00 per hour were set at 6 minutes, what would the piece rate be?

Employers use stock ownership incentive plans to increase employee "ownership" in the company.

Approximately 50 percent of Canadian companies offer some form of variable pay.

What is the purpose of a profit-sharing plan?

When employees receive a higher rate of pay for all of their work if production exceeds a standard level of output, which incentive plan are they are working?

Lump-sum merit pay does not contribute to escalating base salary levels.

Meshing compensation and organizational objectives helps employees assume ownership of their jobs, improve effort, and improve performance.

Sales incentives can be affected by external factors beyond the salesperson's control.

Elizabeth received a stellar performance appraisal in 2008, which translated to a 10 percent pay raise for the next year. Her 2008 base pay was $50,000. Which of the following applies to 2009?

The World of Human Resources Management

Strategy and Human Resources Planning

Equity and Diversity in Human Resources Management

Job Analysis, Employee Involvement, and Flexible Work Schedules

Expanding the Talent Pool: Recruitment and Careers

Employee Selection

Training and Development

Appraising and Improving Performance

Managing Compensation

Employee Benefits

Safety and Health

Employee Rights and Discipline

The Dynamics of Labour Relations

International Human Resources Management

Creating High Performance Work Systems

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Exam 10: Pay For Performance: Incentive Rewards

Spot bonuses are usually provided for some employee effort that is not directly tied to an established performance standard.

For incentive plans to be successful, one of the most critical requirements is that managers be willing to grant incentives based on differences in individuals, teams, or organizational criteria.

According to research, which of the following best describes incentive plans?

Which of the following is an advantage of merit increases on a lump-sum basis?

Peter Drucker, the management expert, has argued that CEO pay should not be more than 20 times that of the rank-and-file employee. What did his concern focus on?

Which of the following is NOT an important component of a meaningful gainsharing plan?

In stock option plans, what does the difference in the grant price and the exercised price represent?

Professional employees are difficult to develop incentive plans for only because their outputs are difficult to measure.

Naveen works as a sales representative for Rogers Pet Foods. He is on a commission plan. His individual performance has been steady over the past few months but he has noticed a decline in his pay. Which of the following is NOT a likely cause for Naveen's pay decline?

Which of the following would NOT be a problem with merit raises?

Which of the following pay plans can be plagued by the "free-rider" effect?

If the standard time for producing one unit of work in a job paying $5.00 per hour were set at 6 minutes, what would the piece rate be?

Employers use stock ownership incentive plans to increase employee "ownership" in the company.

Approximately 50 percent of Canadian companies offer some form of variable pay.

What is the purpose of a profit-sharing plan?

When employees receive a higher rate of pay for all of their work if production exceeds a standard level of output, which incentive plan are they are working?

Lump-sum merit pay does not contribute to escalating base salary levels.

Meshing compensation and organizational objectives helps employees assume ownership of their jobs, improve effort, and improve performance.

Sales incentives can be affected by external factors beyond the salesperson's control.

Elizabeth received a stellar performance appraisal in 2008, which translated to a 10 percent pay raise for the next year. Her 2008 base pay was $50,000. Which of the following applies to 2009?

The World of Human Resources Management

Strategy and Human Resources Planning

Equity and Diversity in Human Resources Management

Job Analysis, Employee Involvement, and Flexible Work Schedules

Expanding the Talent Pool: Recruitment and Careers

Employee Selection

Training and Development

Appraising and Improving Performance

Managing Compensation

Employee Benefits

Safety and Health

Employee Rights and Discipline

The Dynamics of Labour Relations

International Human Resources Management

Creating High Performance Work Systems

Filters