Exam 5: Performance Pay Choices

An automotive shop wants to reward employees for demonstrating creative customer service that leads to repeat business.A particular employee received a 10 percent bonus for suggesting that the company contact customers 24 hours after repairs to ensure customers are satisfied.What type of incentive would be the most appropriate in this scenario?

A publicly traded Canadian corporation provides employees with one year of continuous service and the opportunity to place 6% of their pre-tax income in a plan that may be invested in the company's stock.Furthermore,the company matches the shares by 50% up to a limit of 4% of the employees' pre-tax income.From the perspective of the employee,what are the potential drawbacks of participating in this program?

John works for an aerospace company selling satellites to communication companies.He receives a set percentage of the overall sale price of the satellite in the form of compensation.He does not receive a fixed salary or benefits.Which term best describes John's compensation plan?

You work for a company that assembles plastic toys.Generally speaking,employees working at similar assembly plants receive $15.00 per hour.Internal corporate data indicate that the average worker should be able to assemble 20 toys per hour.Your organization has made a strategic decision to pay assembly line workers on the basis of their output.What is the piece rate you are contemplating paying your assembly line workers?

As the owner of a real estate firm with multi-office operations,you provide a bonus to all sales personnel in the highest-producing office each month.What type of performance pay plan are you using?

The current distribution profit-sharing plan is sometimes called a "cash plan."