Question 1

Vroom's expectancy theory observes that people will not pursue rewards that they find unattractive or where their chances of success are very low.

Accepted Answer

A) True 
 B)False  True

Question 2

McDonald Manufacturing contributes cash to a trust established to purchase shares of McDonald stock for employees. Which of the following is most likely offered by McDonald Manufacturing?

Accepted Answer

A) cash plans 
B) Lincoln incentive systems 
C) deferred profit-sharing plans 
D) employee stock ownership plans 
A) cash plans 
B) Lincoln incentive systems 
C) deferred profit-sharing plans 
D) employee stock ownership plans D

Question 3

The most common eligibility determinant for bonuses is:

Accepted Answer

A) salary grade 
B) job title 
C) officer status 
D) base salary 
A) salary grade 
B) job title 
C) officer status 
D) base salary A

Question 4

With a ________, an executive receives units instead of shares of company stock. In the future, the executive receives cash equal to the appreciation of the units owned.

Accepted Answer

A) nonqualified stock option 
B) premium priced option 
C) phantom stock plan 
D) restricted stock plan 
A) nonqualified stock option 
B) premium priced option 
C) phantom stock plan 
D) restricted stock plan

Question 5

In Vroom's theory of motivation, which of the following terms refers to the perceived value a person attaches to a reward?

Accepted Answer

A) valence 
B) instrumentality 
C) expectancy 
D) variable pay 
A) valence 
B) instrumentality 
C) expectancy 
D) variable pay

Question 6

All of the following are advantages of team incentive plans EXCEPT that ________.

Accepted Answer

A) jealousy is reduced 
B) wage equity is guaranteed 
C) team planning is reinforced 
D) problem solving is encouraged 
A) jealousy is reduced 
B) wage equity is guaranteed 
C) team planning is reinforced 
D) problem solving is encouraged

Question 7

Which incentive plan is based on a philosophy that managers and employees must cooperate together?

Accepted Answer

A) cash plan 
B) Scanlon plan 
C) deferred profit-sharing plan 
D) employee stock ownership plan 
A) cash plan 
B) Scanlon plan 
C) deferred profit-sharing plan 
D) employee stock ownership plan

Question 8

With which of the following can an executive NOT profit until the stock makes significant gains?

Accepted Answer

A) indexed options 
B) phantom stock 
C) restricted stock 
D) premium priced options 
A) indexed options 
B) phantom stock 
C) restricted stock 
D) premium priced options

Question 9

In Vroom's theory of motivation, motivation is equal to E * I * V, where I represents ________.

Accepted Answer

A) intrinsic needs 
B) internalization 
C) instrumentality 
D) incentives 
A) intrinsic needs 
B) internalization 
C) instrumentality 
D) incentives

Question 10

Edward is the new sales manager at Wilson Auto Mart. The previous sales manager set commission rates informally without considering how much each sale covered expenses. As a result, Wilson Auto Mart barely breaks even on each car sale once commissions are paid. Edward wants to motivate his sales force but avoid having excessive commissions. All of the following questions are relevant to developing an effective sales compensation plan EXCEPT:

Accepted Answer

A) How much time does each Wilson salesperson spend with qualified prospects? 
B) What are the motivation and skill levels of Wilson sales team members? 
C) What is the average annual bonus received by Wilson's CEO? 
D) What is Wilson's desired profit for each car sale? 
A) How much time does each Wilson salesperson spend with qualified prospects? 
B) What are the motivation and skill levels of Wilson sales team members? 
C) What is the average annual bonus received by Wilson's CEO? 
D) What is Wilson's desired profit for each car sale?

Question 11

Studies indicate that in order for merit pay to be most effective, it should be linked to ________.

Accepted Answer

A) company profits 
B) annual base salary 
C) employee overtime 
D) employee performance 
A) company profits 
B) annual base salary 
C) employee overtime 
D) employee performance

Question 12

What is the Sarbanes-Oxley Act? How does it affect incentive plans? Do you support the legislation? Why or why not?

Accepted Answer

The Sarbanes-Oxley Act of 2002 affects h

Question 13

The Lincoln incentive system is an incentive plan that ________.

Accepted Answer

A) uses a trust to hold stock in individual employee accounts and distributes it to employees upon retirement 
B) engages many or all employees in a common effort to achieve a company's productivity objectives with any resulting cost-savings gains shared among employees and the company 
C) contributes company shares of its own stock or cash to be used to purchase company stock to a trust established to purchase shares of the firm's stock for employees 
D) involves the firm distributing total annual profits each year among employees based on their merit rating 
A) uses a trust to hold stock in individual employee accounts and distributes it to employees upon retirement 
B) engages many or all employees in a common effort to achieve a company's productivity objectives with any resulting cost-savings gains shared among employees and the company 
C) contributes company shares of its own stock or cash to be used to purchase company stock to a trust established to purchase shares of the firm's stock for employees 
D) involves the firm distributing total annual profits each year among employees based on their merit rating

Question 14

The employees at DataMax participate in a profit-sharing plan. DataMax distributes 15% of its profits as profit shares to employees at regular intervals. Which of the following is most likely used at DataMax?

Accepted Answer

A) current profit-sharing 
B) Lincoln incentive system 
C) deferred profit-sharing plan 
D) employee stock ownership plan 
A) current profit-sharing 
B) Lincoln incentive system 
C) deferred profit-sharing plan 
D) employee stock ownership plan

Question 15

All of the following are disadvantages of straight commission plans EXCEPT ________.

Accepted Answer

A) salespeople avoid pushing hard-to-sell items 
B) salespeople fail to service small accounts 
C) payments are complicated to calculate 
D) significant variations in pay exist 
A) salespeople avoid pushing hard-to-sell items 
B) salespeople fail to service small accounts 
C) payments are complicated to calculate 
D) significant variations in pay exist

Question 16

In Vroom's theory of motivation, motivation is equal to E * I * V, where E represents ________.

Accepted Answer

A) existence 
B) expectancy 
C) esteem 
D) energy 
A) existence 
B) expectancy 
C) esteem 
D) energy

Question 17

How does merit pay differ from a bonus?

Accepted Answer

A) Merit pay becomes part of an employee's base pay, but a bonus does not. 
B) A bonus becomes part of an employee's base pay, but merit pay does not. 
C) Merit pay is linked to individual performance, while a bonus is linked to profits. 
D) A bonus is linked to individual performance, while merit pay is linked to profits. 
A) Merit pay becomes part of an employee's base pay, but a bonus does not. 
B) A bonus becomes part of an employee's base pay, but merit pay does not. 
C) Merit pay is linked to individual performance, while a bonus is linked to profits. 
D) A bonus is linked to individual performance, while merit pay is linked to profits.

Question 18

Ryobi is a large, international power tool manufacturer that develops affordable, high-quality products, such as drills, circular saws, and routers, for both homeowners and craftspeople. As the company continues to grow, its top executives want to ensure that employees are appropriately paid for their performance and that financial incentives are both fair and effective. Currently, the firm provides merit raises based on performance appraisals; however, executives are considering changing the current incentive plan. Which of the following, if true, undermines the argument that Ryobi should discontinue all merit raises?

Accepted Answer

A) Ryobi employees have expressed that they would prefer stock options to merit raises. 
B) Ryobi managers have not received significant training about conducting performance appraisals. 
C) Ryobi managers have noticed significant productivity improvements among employees who receive merit raises. 
D) Ryobi's top executives receive a combination of base salary and stock options to encourage them to focus on the firm's strategic goals. 
A) Ryobi employees have expressed that they would prefer stock options to merit raises. 
B) Ryobi managers have not received significant training about conducting performance appraisals. 
C) Ryobi managers have noticed significant productivity improvements among employees who receive merit raises. 
D) Ryobi's top executives receive a combination of base salary and stock options to encourage them to focus on the firm's strategic goals.

Question 19

Explain the advantages of employee stock ownership plans.

Accepted Answer

The company that offers the ESOP receive

Question 20

If an employee earns an incentive in the form of a prize or cash award, the value of the award is not included when calculating the employee's overtime pay.

Accepted Answer

A) True 
 B)False

Vroom's expectancy theory observes that people will not pursue rewards that they find unattractive or where their chances of success are very low.

McDonald Manufacturing contributes cash to a trust established to purchase shares of McDonald stock for employees. Which of the following is most likely offered by McDonald Manufacturing?

The most common eligibility determinant for bonuses is:

With a ________, an executive receives units instead of shares of company stock. In the future, the executive receives cash equal to the appreciation of the units owned.

In Vroom's theory of motivation, which of the following terms refers to the perceived value a person attaches to a reward?

All of the following are advantages of team incentive plans EXCEPT that ________.

Which incentive plan is based on a philosophy that managers and employees must cooperate together?

With which of the following can an executive NOT profit until the stock makes significant gains?

In Vroom's theory of motivation, motivation is equal to E * I * V, where I represents ________.

Studies indicate that in order for merit pay to be most effective, it should be linked to ________.

What is the Sarbanes-Oxley Act? How does it affect incentive plans? Do you support the legislation? Why or why not?

The Lincoln incentive system is an incentive plan that ________.

The employees at DataMax participate in a profit-sharing plan. DataMax distributes 15% of its profits as profit shares to employees at regular intervals. Which of the following is most likely used at DataMax?

All of the following are disadvantages of straight commission plans EXCEPT ________.

In Vroom's theory of motivation, motivation is equal to E * I * V, where E represents ________.

How does merit pay differ from a bonus?

Explain the advantages of employee stock ownership plans.

If an employee earns an incentive in the form of a prize or cash award, the value of the award is not included when calculating the employee's overtime pay.

Introduction to Human Resource Management

Equal Opportunity and the Law

Human Resource Management Strategy and Analysis

Job Analysis and the Talent Management Process

Personnel Planning and Recruiting

Employee Testing and Selection

Interviewing Candidates

Training and Developing Employees

Performance Management and Appraisal

Employee Retention, Engagement, and Careers

Establishing Strategic Pay Plans

Benefits and Services

Building Positive Employee Relations

Labor Relations and Collective Bargaining

Safety, Health, and Risk Management

Managing Global Human Resources

Managing Human Resources in Small and Entrepreneurial Firms

Filters

Exam 12: Pay for Performance and Financial Incentives

Vroom's expectancy theory observes that people will not pursue rewards that they find unattractive or where their chances of success are very low.

McDonald Manufacturing contributes cash to a trust established to purchase shares of McDonald stock for employees. Which of the following is most likely offered by McDonald Manufacturing?

The most common eligibility determinant for bonuses is:

With a ________, an executive receives units instead of shares of company stock. In the future, the executive receives cash equal to the appreciation of the units owned.

In Vroom's theory of motivation, which of the following terms refers to the perceived value a person attaches to a reward?

All of the following are advantages of team incentive plans EXCEPT that ________.

Which incentive plan is based on a philosophy that managers and employees must cooperate together?

With which of the following can an executive NOT profit until the stock makes significant gains?

In Vroom's theory of motivation, motivation is equal to E * I * V, where I represents ________.

Studies indicate that in order for merit pay to be most effective, it should be linked to ________.

What is the Sarbanes-Oxley Act? How does it affect incentive plans? Do you support the legislation? Why or why not?

The Lincoln incentive system is an incentive plan that ________.

The employees at DataMax participate in a profit-sharing plan. DataMax distributes 15% of its profits as profit shares to employees at regular intervals. Which of the following is most likely used at DataMax?

All of the following are disadvantages of straight commission plans EXCEPT ________.

In Vroom's theory of motivation, motivation is equal to E * I * V, where E represents ________.

How does merit pay differ from a bonus?

Explain the advantages of employee stock ownership plans.

If an employee earns an incentive in the form of a prize or cash award, the value of the award is not included when calculating the employee's overtime pay.

Introduction to Human Resource Management

Equal Opportunity and the Law

Human Resource Management Strategy and Analysis

Job Analysis and the Talent Management Process

Personnel Planning and Recruiting

Employee Testing and Selection

Interviewing Candidates

Training and Developing Employees

Performance Management and Appraisal

Employee Retention, Engagement, and Careers

Establishing Strategic Pay Plans

Benefits and Services

Building Positive Employee Relations

Labor Relations and Collective Bargaining

Safety, Health, and Risk Management

Managing Global Human Resources

Managing Human Resources in Small and Entrepreneurial Firms

Filters