Exam 12: Incentive Plans and Executive Compensation

Robert is paid by the number of bicycle tires he attaches to wheel rims.If he attaches more than his daily quota of tires,he receives 75 cents extra per tire over the quota.Robert is paid under a ____ system.

An effect of variable pay plans is that ____ incentives increase the competition among individual employees.

Max is studying the new pay-for-performance incentive plan.Max realizes that under the new standards if he continues his normal rate of production,which takes a steady effort over the work day with few "slack" times where he can rest,he can continue to earn what he earns now.But if he puts forward maximum effort all day long,which will leave him physically and mentally exhausted by the end of the day,he can earn an extra $10 a day before taxes.Max's current pay is about $30 an hour.Max is making enough money that he is saving for a home down payment..Which of the statements is most likely to be TRUE?

Caroline works on a design team that develops costumes for historically-based and fantasy movies.The team's designs are executed by professional seamstresses and tailors.Caroline's

Gainsharing plans are considered successful if they "self-liquidate,' meaning that all the gains from increased employee productivity are distributed to the employees.

In a true pay-for-performance system,which of the following employees would qualify for incentive reward?

What is the usual composition of the compensation committee?

James is a sales representative for a large international import/export firm.For the past three years James has received an annual bonus,the maximum possible,between $75,000 and $90,000 because he met his sales targets.This year,James is planning on using his bonus to buy a new sports car,so he and his wife have been test driving cars.Which of the following statements is most likely to be TRUE?

One of the major differences between individual incentives and group incentives is that

What factors will contribute to a successful variable pay plan?

You have been hired as the new director of compensation for a large organization.The existing pay-for-performance system consists of annual bonuses for managerial and professional employees.The system has not been reviewed for over five years.In your review,all of the following would be high-priority focuses of your review EXCEPT

How does executive compensation differ from the compensation packages provided for other employees in the organization? Describe some of the incentives available for executives.

Which of the following statements is FALSE?

CEO performance is meaningfully measured only if financial objectives such as return on investment are considered.Non-financial measures are too easily manipulated to accurately reflect CEO performance.

Some form of individual performance incentive is appropriate for every organization.

After working five years as a service coordinator at BlueBottle Enterprises,Mandy has developed some timesaving shortcuts that allow her to process a higher volume of work than the other service coordinators.If Mandy would train her co-workers in her techniques,the entire department could be more efficient.The performance incentive system that would be LEAST likely to encourage Mandy to share her expertise with her co-workers would be a/an

All of the following are common measures of sales effectiveness EXCEPT

Technically,ESOPs are considered employee incentive systems even though the funds are not received by the employee until years or decades after the individual's efforts.

Which of the following statements is FALSE?

A medium-sized law firm every year distributes a bonus to its employees,from clerks to partners,based on the fees it has earned on the cases it has won.Even though every employee has not worked on every case,the senior partners of the law firm feel that such a bonus motivates employees to cooperate with one another and assist each other in times of high work loads.This is a type of ____ incentive.