Exam 11: Rewarding Performance

When gainsharing is first implemented:

Additional Case 11.1 The HR department at Sussex Enterprises has been asked to evaluate the effectiveness of the firm's team-based incentive plan. Managers at the firm report a decline in worker performance, an increase in interpersonal conflicts, and an increase in complaints about free riding team members. In addition, the manufacturing group has been accused of producing more units than the marketing group can sell. HR at Sussex needs to determine if the current incentive plan is appropriate or should be replaced. -Refer to Additional Case 11.1.Which of the following would most likely improve the effectiveness of the current pay-for-performance plan at Sussex?

What is the most popular incentive given by employers?

A(n)________ is a financial incentive that is given on a one-time basis and does not raise the employee's base pay permanently.

________ is a plantwide pay-for-performance plan in which a portion of the company's cost savings is returned to workers,usually in the form of a lump-sum bonus.

How does plantwide pay-for-performance work?

Which of the following best explains the findings of the Kaiser Permanente Northern California study?

Gainsharing works best when:

In order for a firm to benefit the most from plantwide pay-for-performance plans,managers should:

A firm is offering a one-time tangible prize to the employee who receives the highest customer service evaluation in a particular month.This company is using a(n)________ incentive.

What are the most common challenges of implementing a successful pay-for-performance system? Describe four challenges and offer a solution for each.

A compensation system in which employees are paid per unit produced is referred to as a(n)________.

________ is a plantwide pay-for-performance plan which returns a portion of company savings to employees as a lump-sum bonus.

An individual-based incentive compensation system has a number of disadvantages,such as:

Additional Case 11.2 Richland Manufacturing uses an individual-based pay-for-performance plan for employees. Manager input in the form of performance evaluations primarily determines individual employee rewards. Performance appraisals at Richland are used for multiple purposes including compensation, training, and work planning. Since implementing the plan, many managers have noticed that employees tend to play it safe by setting modest rather than challenging goals for themselves. Employees have also been avoiding important tasks, such as satisfying the needs of customers and keeping work areas neat. In addition, most employees express disbelief that pay and performance are actually linked. As a result, Richland is considering making modifications to the system. The HR Director wants a system that will reward all employees based on the entire company's performance because he wants to increase employee commitment. The VP of Operations wants to reward specific productivity and quality improvements with a simply structured system that considers labor costs as well as other production expenses. The VP of Operations also believes that labor and management should work together to allocate the rewards. -Refer to Additional Case 11.2.The VP of Operations would most likely favor a:

Mario Development Group wants to give employees incentives while getting the maximum tax advantage for them and the firm.Flexibility in compensation costs is important.The firm needs to keep fixed compensation low while still attracting high quality job candidates.Which of the following would be most appropriate for Mario Development Group?

Public and nonpublic praise,honorary titles,and expanded job responsibilities are all examples of:

A corporate-wide pay-for-performance plan that uses a formula to allocate a portion of declared profits to employees is referred to as ________.

A one-time reward usually given in the form of a tangible prize is called a(n)________.

Which of the following plantwide plans incorporates the ideas of employees,union leaders,and top managers to generate cost-saving ideas?