Exam 11: Rewarding Performance

Pay-for-performance or incentive compensation systems are built on the assumption that individual employees and work teams differ in how much they contribute to the firm.

When implementing a team-based compensation plan,a firm would most likely:

In what way are compensation programs for salespeople different from compensation programs for other types of employees?

Profit sharing and ESOPs are both:

In any group,some individuals put in more effort than others.On occasion,the contribution is markedly less than the average of the rest of the team.The most appropriate term for this is:

A common problem associated with gainsharing is that such plans exacerbate normal labor and management tensions.

Which of the following is the LEAST likely result of using long-term income incentives to reward CEOs?

________ is a theory of behavior holding that people tend to do those things that are rewarded.

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.In addition to rewarding high performers,Sussex executives want to gain the maximum tax advantage,increase employee commitment,and maximize financial flexibility.Which pay-for-performance plan would be most appropriate for Sussex?

A key assumption behind pay-for-performance compensation is that:

Felix Enterprises has relatively few levels of hierarchy,and the firm's technology lends itself to breaking employees into self-contained groups.The workforce is highly committed and intrinsically motivated by their work.These conditions most likely lend themselves to a:

Pay-for-performance has little effect on employees' effort level and commitment to the organization.

Resources,Inc.has recently increased its emphasis on pay-for-performance.Within the last several months,there has been a sharp increase in employee competition and the sabotaging of projects.The incentive plan has most likely:

Healthy living incentives most likely benefit employers in all of the following ways EXCEPT by:

Corporatewide pay-for-performance compensation plans place employees at considerable financial risk.

The best environment for individual-based pay-for-performance plans is with jobs with minimal autonomy.

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.Sussex executives have decided to change the firm's pay-for-performance plan to one that is individual-based.Which of the following best supports this decision?

Which of the following is an advantage of team-based pay-for-performance plans?

Team-based pay plans are the most widely-used pay-for-performance plans in industry.

Nearly 95% of U.S.companies are expected to use pay-for-performance plans by 2014.