Question 1

Which of the following best explains why individual-based incentive plans work?

Accepted Answer

A)  Equity theory 
B)  Maslow's hierarchy 
C)  Expectancy theory 
D)  Achievement theory 
A)  Equity theory 
B)  Maslow's hierarchy 
C)  Expectancy theory 
D)  Achievement theory

Question 2

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.Which of the following would most likely improve the success of Richland's current incentive plan?

Accepted Answer

A)  Limiting the use of performance appraisals to compensation purposes 
B)  Offering team-based pay in addition to individual bonuses 
C)  Providing Scanlon plans to all employees 
D)  Encouraging employee competition 
A)  Limiting the use of performance appraisals to compensation purposes 
B)  Offering team-based pay in addition to individual bonuses 
C)  Providing Scanlon plans to all employees 
D)  Encouraging employee competition

Question 3

To minimize problems,a pay-for-performance plan should:

Accepted Answer

A)  appropriately link pay and performance. 
B)  use pay-for-performance as a stand-alone program. 
C)  downplay the rewards to avoid an over-focus on productivity. 
D)  use a single-layer, simple program. 
A)  appropriately link pay and performance. 
B)  use pay-for-performance as a stand-alone program. 
C)  downplay the rewards to avoid an over-focus on productivity. 
D)  use a single-layer, simple program.

Question 4

Which of the following is a disadvantage of plantwide incentive programs?

Accepted Answer

A)  Increased team competition 
B)  Complex formulas for determining bonuses 
C)  Protection of low performers 
D)  Disbelief that pay and performance are linked 
A)  Increased team competition 
B)  Complex formulas for determining bonuses 
C)  Protection of low performers 
D)  Disbelief that pay and performance are linked

Question 5

Firms that give perks to executives are not legally required to disclose such awards..

Accepted Answer

A) True 
 B)False

Question 6

Profit-sharing plans are most attractive to employers and employees alike when the firm:

Accepted Answer

A)  employs mostly older workers who are near retirement age. 
B)  faces highly cyclical ups and downs in product demand. 
C)  is a small start-up in the high-tech field. 
D)  has high labor costs. 
A)  employs mostly older workers who are near retirement age. 
B)  faces highly cyclical ups and downs in product demand. 
C)  is a small start-up in the high-tech field. 
D)  has high labor costs.

Question 7

What types of plantwide incentive plans are available to firms? What are the primary disadvantages of such plans?

Accepted Answer

Plantwide pay-for-performance programs a

Question 8

If a team is paid based on meeting its production goals,and each member of the team must contribute a minimal percentage toward that goal to share in the team award,then the pay-for-performance system is:

Accepted Answer

A)  promoting increased employee involvement in corporate growth. 
B)  promoting the belief that performance makes a difference. 
C)  using other HRM programs at the same time. 
D)  using multiple layers of rewards. 
A)  promoting increased employee involvement in corporate growth. 
B)  promoting the belief that performance makes a difference. 
C)  using other HRM programs at the same time. 
D)  using multiple layers of rewards.

Question 9

If a firm frequently changes the basis of its pay-for-performance system,it will most likely:

Accepted Answer

A)  diminish its credibility gap. 
B)  violate its psychological contract with employees. 
C)  generate fear among employees due to a lack of control. 
D)  increase employees' intrinsic drive to perform beyond expectations. 
A)  diminish its credibility gap. 
B)  violate its psychological contract with employees. 
C)  generate fear among employees due to a lack of control. 
D)  increase employees' intrinsic drive to perform beyond expectations.

Question 10

Plantwide pay-for-performance plans are likely to be effective in large companies that function in an unstable product market.

Accepted Answer

A) True 
 B)False

Question 11

A corporate-wide pay-for-performance plan that rewards employees with company stocks,either as an outright grant or at a favorable price that may be below market value,is referred to as a(n)________.

Accepted Answer

employee s

Question 12

The future rewards theory maintains that people tend to do those things that are rewarded.

Accepted Answer

A) True 
 B)False

Question 13

Which term refers to a bonus given to executives that is proportional to the change in company stock prices,rather than changes in profitability measures?

Accepted Answer

A)  Stock appreciation rights 
B)  Performance plan units 
C)  Performance share plans 
D)  Phantom stock 
A)  Stock appreciation rights 
B)  Performance plan units 
C)  Performance share plans 
D)  Phantom stock

Question 14

Which of the following is LEAST likely to cause the failure of a pay-for-performance program?

Accepted Answer

A)  HR hiring unskilled employees 
B)  High-tech firms using piece-rate plans 
C)  Employees failing to receive adequate training 
D)  Managers lacking performance appraisal training 
A)  HR hiring unskilled employees 
B)  High-tech firms using piece-rate plans 
C)  Employees failing to receive adequate training 
D)  Managers lacking performance appraisal training

Question 15

A straight-salary sales compensation plan has a tendency to encourage salespeople to emphasize sales volume over customer service.

Accepted Answer

A) True 
 B)False

Question 16

An ESOP-based incentive compensation plan:

Accepted Answer

A)  is based entirely on productivity and quality gains. 
B)  resembles an Improshare plan that distributes corporate savings to workers. 
C)  is based on the entire company's performance and rewards employees with stock. 
D)  combines the best features of an individual-based plan and a team-based incentive plan. 
A)  is based entirely on productivity and quality gains. 
B)  resembles an Improshare plan that distributes corporate savings to workers. 
C)  is based on the entire company's performance and rewards employees with stock. 
D)  combines the best features of an individual-based plan and a team-based incentive plan.

Question 17

If managers increase employee involvement in the design of an incentive compensation system,which of the following will most likely occur?

Accepted Answer

A)  Employees will be more committed to the plan. 
B)  Managers will spend more time in conflict resolution. 
C)  Employees' intrinsic drives will be sharply reduced. 
D)  Managers will be better able to evaluate performance. 
A)  Employees will be more committed to the plan. 
B)  Managers will spend more time in conflict resolution. 
C)  Employees' intrinsic drives will be sharply reduced. 
D)  Managers will be better able to evaluate performance.

Question 18

Research suggests that pay-for-performance raises productivity but decreases job satisfaction.

Accepted Answer

A) True 
 B)False

Question 19

Tanglewood Enterprises wants a sales compensation plan that is simple to administer,controls sales costs,and encourages salespeople to be entrepreneurial.Which of the following would be the best compensation plan for Tanglewood?

Accepted Answer

A)  Straight commission plan 
B)  Combination plan 
C)  Straight salary plan 
D)  Merit plan 
A)  Straight commission plan 
B)  Combination plan 
C)  Straight salary plan 
D)  Merit plan

Question 20

Profit sharing differs from gainsharing in that profit sharing:

Accepted Answer

A)  doesn't reward productivity improvements. 
B)  accepts that people are extrinsically motivated. 
C)  often leads to decreases in productivity. 
D)  maintains individual equity. 
A)  doesn't reward productivity improvements. 
B)  accepts that people are extrinsically motivated. 
C)  often leads to decreases in productivity. 
D)  maintains individual equity.

Which of the following best explains why individual-based incentive plans work?

To minimize problems,a pay-for-performance plan should:

Which of the following is a disadvantage of plantwide incentive programs?

Firms that give perks to executives are not legally required to disclose such awards..

Profit-sharing plans are most attractive to employers and employees alike when the firm:

What types of plantwide incentive plans are available to firms? What are the primary disadvantages of such plans?

If a team is paid based on meeting its production goals,and each member of the team must contribute a minimal percentage toward that goal to share in the team award,then the pay-for-performance system is:

If a firm frequently changes the basis of its pay-for-performance system,it will most likely:

Plantwide pay-for-performance plans are likely to be effective in large companies that function in an unstable product market.

A corporate-wide pay-for-performance plan that rewards employees with company stocks,either as an outright grant or at a favorable price that may be below market value,is referred to as a(n)________.

The future rewards theory maintains that people tend to do those things that are rewarded.

Which term refers to a bonus given to executives that is proportional to the change in company stock prices,rather than changes in profitability measures?

Which of the following is LEAST likely to cause the failure of a pay-for-performance program?

A straight-salary sales compensation plan has a tendency to encourage salespeople to emphasize sales volume over customer service.

An ESOP-based incentive compensation plan:

If managers increase employee involvement in the design of an incentive compensation system,which of the following will most likely occur?

Research suggests that pay-for-performance raises productivity but decreases job satisfaction.

Tanglewood Enterprises wants a sales compensation plan that is simple to administer,controls sales costs,and encourages salespeople to be entrepreneurial.Which of the following would be the best compensation plan for Tanglewood?

Profit sharing differs from gainsharing in that profit sharing:

Meeting Present and Emerging Strategic Human Resource Challenges

Managing Work Flows and Conducting Job Analysis

Understanding Equal Opportunity and the Legal Environment

Managing Diversity

Recruiting and Selecting Employees

Managing Employee Separations, Downsizing, and Outplacement

Appraising and Managing Performance

Training the Workforce

Developing Careers

Managing Compensation

Designing and Administering Benefits

Developing Employee Relations

Respecting Employee Rights and Managing Discipline

Working With Organized Labor

Managing Workplace Safety and Health

International HRM Challenge

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Exam 11: Rewarding Performance

Which of the following best explains why individual-based incentive plans work?

To minimize problems,a pay-for-performance plan should:

Which of the following is a disadvantage of plantwide incentive programs?

Firms that give perks to executives are not legally required to disclose such awards..

Profit-sharing plans are most attractive to employers and employees alike when the firm:

What types of plantwide incentive plans are available to firms? What are the primary disadvantages of such plans?

If a team is paid based on meeting its production goals,and each member of the team must contribute a minimal percentage toward that goal to share in the team award,then the pay-for-performance system is:

If a firm frequently changes the basis of its pay-for-performance system,it will most likely:

Plantwide pay-for-performance plans are likely to be effective in large companies that function in an unstable product market.

A corporate-wide pay-for-performance plan that rewards employees with company stocks,either as an outright grant or at a favorable price that may be below market value,is referred to as a(n)________.

The future rewards theory maintains that people tend to do those things that are rewarded.

Which term refers to a bonus given to executives that is proportional to the change in company stock prices,rather than changes in profitability measures?

Which of the following is LEAST likely to cause the failure of a pay-for-performance program?

A straight-salary sales compensation plan has a tendency to encourage salespeople to emphasize sales volume over customer service.

An ESOP-based incentive compensation plan:

If managers increase employee involvement in the design of an incentive compensation system,which of the following will most likely occur?

Research suggests that pay-for-performance raises productivity but decreases job satisfaction.

Tanglewood Enterprises wants a sales compensation plan that is simple to administer,controls sales costs,and encourages salespeople to be entrepreneurial.Which of the following would be the best compensation plan for Tanglewood?

Profit sharing differs from gainsharing in that profit sharing:

Meeting Present and Emerging Strategic Human Resource Challenges

Managing Work Flows and Conducting Job Analysis

Understanding Equal Opportunity and the Legal Environment

Managing Diversity

Recruiting and Selecting Employees

Managing Employee Separations, Downsizing, and Outplacement

Appraising and Managing Performance

Training the Workforce

Developing Careers

Managing Compensation

Designing and Administering Benefits

Developing Employee Relations

Respecting Employee Rights and Managing Discipline

Working With Organized Labor

Managing Workplace Safety and Health

International HRM Challenge

Filters