Exam 12: Incentive Plans and Executive Compensation

Imogene's Delectables has announced a competition to reward the store manager with the highest dollar sales in each state with a paid vacation to a luxury resort.Imogene's Delectables' pay-for-performance plan will probably

Gainsharing plans are designed to elicit ____ effort from employees.

The Board of Directors of Clementine Minerals and Mining has been challenged by shareholders about the total compensation of the CEO.In order to examine whether the CEO's pay is reasonable,the Board of Directors should be able to defend all of the following questions EXCEPT

In large organizations,the top HR executive sets executive pay with input by the Board of Directors.

Arnold sells oil field equipment.He is paid 2 percent of the dollar amount of the sales he has completed each quarter.This is Arnold's only compensation,but he sells several million dollars' worth of equipment each year.He is on the ____ system.

At the annual awards banquet,all employees who have been with the company 30 years or more received their choice of a cruise or a week at a resort.This type of special incentive program rewards

Bernard is very upset when he learns that the company is changing to a pay-for-performance system where lump-sum bonuses instead of raises will be used.The system will record the performance of each work team and reward everyone on the team equally.All of the following are likely reasons for Bernard to be upset EXCEPT

The main advantage for an employer in setting up an employee stock ownership plan is

You are a member of the compensation committee of the Board of Directors for a national,for-profit organization.When reviewing the compensation package for the current CEO,Jack Sprat,you must consider all the following questions EXCEPT

All of the following are potential outcomes of a successful pay-for-performance plan EXCEPT

It is important to make sure that what is being rewarded by the compensation system is strongly tied to organizational objectives,because people tend to

In order to measure the effectiveness of a new organization-wide incentive plan,a reasonable metric would be average employee productivity change.

To be effective in motivating plant-wide cooperation among employees,an organizational incentive program should

Profit-sharing and ESOPs are ____ -level incentives

Perquisites may offer substantial tax savings for executives because some perks are not taxed as income.

At Megatherium Holdings,the employees on work teams receive bonuses based on the extent to which the team reaches the team's goals.Each team member receives the same percentage of their base pay as their bonus.Base pay is a function of seniority with the organization.Which of the following statements is TRUE?

Unions typically encourage profit-sharing plans as long as the plans are based on "bottom-line numbers" because this allows employees' total take-home pay to be larger in profitable years.

In many large firms,executive pay is influenced by compensation consultants who are paid large fees by the firm.

All of the following are drawbacks of profit-sharing plans EXCEPT

Describe the various methods of compensating sales employees.