Exam 11: Rewarding Performance

You want to foster group cohesiveness and facilitate performance measurement.An incentive program that would most likely help you do this would be:

Stock options provide the executive with "free" company stock,normally with no strings attached.

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.Employees avoiding important tasks is most likely a problem associated with:

Reservation Specialists are able to speed up their turnaround time with customers by suggesting that customers put their questions/complaints in writing.This results in the specialists beating their productivity "numbers," but has buried the correspondence specialists in paperwork,destroying their productivity.This is an example of the team-based compensation plan drawback of:

What is the difference between stock options,stock purchase plans,and stock awards as given to corporate executives? Why are long-term incentive plans for executives frequently criticized?

Employees' intrinsic drives are based upon their desire to receive promised rewards and benefits.

Pay-for-performance is likely to enhance the spirit of cooperation in an organization,as employees will work to help one another improve their job performance.

Customer service rewards for salespeople are typically individual-based,team-based,or plant-based.

Which of the following is most likely true about individual-based compensation systems?

Team-based pay plans normally reward team members individually based upon how much they contributed to the team's overall performance.

In most cases,plantwide incentive programs:

What are the advantages and disadvantages of team-based pay-for-performance plan? Under what conditions are such compensation plans most effective? Why are team-based incentives less appropriate tools for rewarding high performers at small firms?

What are the disadvantages of individual-based pay-for-performance plans? What are the disadvantages of plantwide plans? How do firms benefit from implementing multiple-layers-of-rewards systems?

________ is an increase in base pay,normally given once a year.

Most employees at Sterling Enterprises work on a team.The firm is considering the implementation of a pay for performance plan.Which of the following would be the most likely challenge of such a plan?

Profit sharing is best used in small to medium-sized firms,while gainsharing works in any size company.

Merit pay differs from bonus programs in what way?

Which of the following is LEAST associated with the failure of individual-based pay-for-performance systems?

Employees who are rewarded on the basis of corporate-wide pay-for-performance plans:

A significant part of any pay-for-performance system is using nonfinancial incentives as well as financial incentives.