Question 1

Behavior modification principles can be useful to managers who seek to change employee behavior through rewards or punishments linked to performance.

Accepted Answer

A) True 
 B)False

Question 2

When hired by Delmar Designs,Shane agreed to forego 6% of his normal pay if he didn't meet his goals in return for a 12% bonus if he exceeded his goals.In which type of plan does Shane most likely participate?

Accepted Answer

A) earnings-at-risk pay plan 
B) variable risk sharing plan 
C) at-risk gainsharing plan 
D) employee at-risk plan

Question 3

All merit raises become part of an employee's base salary.

Accepted Answer

A) True 
 B)False

Question 4

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?

Accepted Answer

A) What are the guidelines for implementing a gainsharing plan? 
B) What type of merit raises are effective for high-performing managers? 
C) What organization wide incentive plans are used by other manufacturing firms? 
D) What is the connection between merit pay increases and employee productivity?

Question 5

Elaine,the HR manager at Western Enterprises,has been assigned the task of implementing a gainsharing plan.What does Elaine most likely need to do first?

Accepted Answer

A) choose specific performance measures 
B) decide how often to pay bonuses 
C) establish general plan objectives 
D) develop an involvement system

Question 6

Behavior modification is based upon the principles of rewards and punishments advanced by ________.

Accepted Answer

A) Frederick Taylor 
B) Frederick Herzberg 
C) B.F. Skinner 
D) Edward Deci

Question 7

The employees at DataMax participate in a profit-sharing plan.DataMax distributes 15% of its profits as profit shares to employees at regular intervals.Which of the following is most likely used at DataMax?

Accepted Answer

A) current profit-sharing 
B) Lincoln incentive system 
C) deferred profit-sharing plan 
D) employee stock ownership plan

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

Frederick Taylor referred to the tendency of employees to work at the slowest pace possible and to produce at the minimum acceptable level as ________.

Accepted Answer

A) social loafing 
B) systematic soldiering 
C) work shifting 
D) group logrolling

Question 10

According to Victor Vroom,expectancy could also be referred to as the ________.

Accepted Answer

A) probability that effort will lead to success 
B) relationship between performance and reward 
C) perceived value a person attaches to a reward 
D) employer's strategy for motivating employees

Question 11

All of the following are disadvantages of straight commission plans EXCEPT ________.

Accepted Answer

A) salespeople avoid pushing hard-to-sell items 
B) salespeople fail to service small accounts 
C) payments are complicated to calculate 
D) significant variations in pay exist

Question 12

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. All of the following questions are relevant to developing an effective sales compensation plan EXCEPT ________.

Accepted Answer

A) How much time does each Wilson salesperson spend with qualified prospects? 
B) What are the motivation and skill levels of Wilson sales team members? 
C) What is the average annual bonus received by Wilson's CEO? 
D) What is Wilson's desired profit for each car sale?

Question 13

The Scanlon plan is a type of gainsharing plan.

Accepted Answer

A) True 
 B)False

Question 14

According to Vroom's theory,if expectancy,instrumentality,or valence is equal to zero,there will be no employee motivation.

Accepted Answer

A) True 
 B)False

Question 15

Top executives at DYS Enterprises are considering the idea of implementing an employee incentive plan.Which of the following suggests that an incentive plan would NOT be appropriate at DYS Enterprises?

Accepted Answer

A) Delays rarely occur. 
B) The job is standardized 
C) Employees are unskilled but motivated. 
D) A link exists between employee effort and output.

Question 16

Common stock is the most common payment form used in gainsharing plans.

Accepted Answer

A) True 
 B)False

Question 17

The perceived relationship between successful performance and obtaining the reward is referred to by Vroom as ________.

Accepted Answer

A) instrumentality 
B) valence 
C) expectancy 
D) optimism

Question 18

The Lincoln incentive system is an incentive plan that ________.

Accepted Answer

A) uses a trust to hold stock in individual employee accounts and distributes it to employees upon retirement 
B) engages many or all employees in a common effort to achieve a company's productivity objectives with any resulting cost-savings gains shared among employees and the company 
C) contributes company shares of its own stock or cash to be used to purchase company stock to a trust established to purchase shares of the firm's stock for employees 
D) involves the firm distributing total annual profits each year among employees based on their merit rating

Question 19

Which of the following terms refers to financial rewards paid to workers whose production exceeds some predetermined standard?

Accepted Answer

A) indirect financial payments 
B) merit payments 
C) hardship allowances 
D) financial incentives

Question 20

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

Accepted Answer

A) True 
 B)False

Exam 12: Pay for Performance and Financial Incentives

Behavior modification principles can be useful to managers who seek to change employee behavior through rewards or punishments linked to performance.

When hired by Delmar Designs,Shane agreed to forego 6% of his normal pay if he didn't meet his goals in return for a 12% bonus if he exceeded his goals.In which type of plan does Shane most likely participate?

All merit raises become part of an employee's base salary.

Elaine,the HR manager at Western Enterprises,has been assigned the task of implementing a gainsharing plan.What does Elaine most likely need to do first?

Behavior modification is based upon the principles of rewards and punishments advanced by ________.

The employees at DataMax participate in a profit-sharing plan.DataMax distributes 15% of its profits as profit shares to employees at regular intervals.Which of the following is most likely used at DataMax?

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

Frederick Taylor referred to the tendency of employees to work at the slowest pace possible and to produce at the minimum acceptable level as ________.

According to Victor Vroom,expectancy could also be referred to as the ________.

All of the following are disadvantages of straight commission plans EXCEPT ________.

The Scanlon plan is a type of gainsharing plan.

According to Vroom's theory,if expectancy,instrumentality,or valence is equal to zero,there will be no employee motivation.

Top executives at DYS Enterprises are considering the idea of implementing an employee incentive plan.Which of the following suggests that an incentive plan would NOT be appropriate at DYS Enterprises?

Common stock is the most common payment form used in gainsharing plans.

The perceived relationship between successful performance and obtaining the reward is referred to by Vroom as ________.

The Lincoln incentive system is an incentive plan that ________.

Which of the following terms refers to financial rewards paid to workers whose production exceeds some predetermined standard?

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