Exam 12: Pay for Performance and Financial Incentives

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 questions is most relevant to the decision by Ryobi executives to discontinue all merit raises?

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

Which of the following terms refers to any salary increase the firm awards to an individual employee based on his or her individual performance?

The standard hour plan is like the piece rate plan except instead of getting a rate per piece,the employee gets a premium equal to the percent by which his or her performance exceeds the standard.

Which of the following terms refers to an incentive plan in which a person is paid a sum for each item he or she makes or sells,with a strict proportionality between results and rewards?

You are the manager of large used car retailer,and sales are sluggish.What incentive plan would be best for motivating your sales team? What steps should you take to ensure that your incentive plan is effective?

The Scanlon plan includes all of the following features EXCEPT ________.

Cash,stock,stock options,stock appreciation rights,and phantom stock are known as "golden handcuffs" because they are long-term incentives for executives.

In which of the following do workers receive a basic hourly rate plus a premium equal to the percent by which their performance exceeds the standard?

According to the FLSA,merit pay can only be given to exempt,nonmanagement employees at a company.

The complicated nature of piecework makes it an unpopular individual incentive plan among employers.

According to Vroom's theory,when managers design incentive plans they should do all of the following EXCEPT ________.

Which of the following is the primary advantage of piecework plans?

The first step in implementing a gainsharing plan is to ________.

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. -Which of the following,if true,supports the argument that Edward should pay his sales team a combination of salary plus commission?

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

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

What type of profit-sharing plan involves the firm distributing total annual profits each year among employees based on their merit rating?

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.

Straight commission plans are attractive to high-performing salespeople.