Question 1

A corporation gives a golden parachutes to encourage anexecutive to stay with the company.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is an advantage of perquisites?

Accepted Answer

A)  Perks offer substantial tax savings because some of them are not taxed as income. 
B)  Perks offer substantial tax savings because some of them are not taxed as an expenditure. 
C)  Perks ensure a source of regular additional income for the employees apart from the salary. 
D)  Perks help in reducing the total cost of benefits provided by the organization.

Question 3

The focus of gainsharing is to _____.

Accepted Answer

A)  decrease discretionary efforts 
B)  decrease pay variances 
C)  increase discretionary efforts 
D)  increase pay variances

Question 4

_____ refer to the compensation given to an executive if he or she is forced to leave an organization.

Accepted Answer

A)  Perquisites 
B)  Golden parachutes 
C)  Commissions 
D)  Short-term Incentives

Question 5

Which of the following is an allocation choice in profit-sharing plans?

Accepted Answer

A)  Fixed percentage of profits 
B)  Based on years of service 
C)  Sliding percentage based on sales 
D)  Unit profits

Question 6

A straight salary has no additional commission incentive, while a straight commission has all compensation tied to the incentive.

Accepted Answer

A) True 
 B)False

Question 7

To ensure that spot bonuses works efficiently, employers must keep the amounts reasonable and provide them only for exceptional performance accomplishments.

Accepted Answer

A) True 
 B)False

Question 8

Variable pay plans attempt to provide tangible rewards, or incentives, to employees for performance beyond normal expectations.

Accepted Answer

A) True 
 B)False

Question 9

Describe the three categories of variable pay.

Accepted Answer

The answer of Describe the three categories of variable pay....

Question 10

Which of the following is typically a funding choice in profit-sharing plans?

Accepted Answer

A)  Based on percentage of employee earnings 
B)  Based on years of service 
C)  Based on sliding percentage of purchases 
D)  Based on sliding percentage of sales

Question 11

The "clawbacks" provision in Civil Rights Act of 1964 allows a company to recover any incentive-based pay that was paid out during the prior three years if it would not have been paid under restated financial statements.

Accepted Answer

A) True 
 B)False

Question 12

According to the Dodds-Frank Act, publicly listed companies now must allow shareholders to vote on executive compensation.

Accepted Answer

A) True 
 B)False

Question 13

The most prevalent forms of organization-wide incentives are piece-rate systems, sales commissions, and individual bonuses.

Accepted Answer

A) True 
 B)False

Question 14

Stock option plans give employees the right to purchase_____.

Accepted Answer

A)  an unlimited number of shares of company stock at a specified exercise price for a limited period of time 
B)  an unlimited number of shares of company stock at a specified exercise price for an unlimited period of time 
C)  a fixed number of shares of company stock at a specified exercise price for a limited period of time 
D)  a fixed number of shares of company stock at a specified exercise price for an unlimited period of time

Question 15

A free rider is a member of the group who contributes the most in a group venture.

Accepted Answer

A) True 
 B)False

Question 16

Explain the salary-only approach of sales compensation.

Accepted Answer

The answer of Explain the salary-only approach of sales compensation....

Question 17

Which of the following is true of recognition awards?

Accepted Answer

A)  The criteria used for rewarding performance is typically the length of service rather than employees' actual performance. 
B)  They can be awarded only during appraisals. 
C)  They are given to a team and not to individual employees. 
D)  The criteria for selecting award winners may be determined subjectively in some situations.

Question 18

Cost reduction is classified as a work unit/team incentive.

Accepted Answer

A) True 
 B)False

Question 19

Compensation given to an executive if he or she is forced to leave an organization is called a golden parachute.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is typically classified as a regular benefit?

Accepted Answer

A)  Health insurance 
B)  Corporate-owned employee life insurance 
C)  Company-paid financial planning for executives 
D)  Estate planning

Exam 12: Variable Pay and Executive Compensation

A corporation gives a golden parachutes to encourage anexecutive to stay with the company.

Which of the following is an advantage of perquisites?

The focus of gainsharing is to _____.

_____ refer to the compensation given to an executive if he or she is forced to leave an organization.

Which of the following is an allocation choice in profit-sharing plans?

A straight salary has no additional commission incentive, while a straight commission has all compensation tied to the incentive.

To ensure that spot bonuses works efficiently, employers must keep the amounts reasonable and provide them only for exceptional performance accomplishments.

Variable pay plans attempt to provide tangible rewards, or incentives, to employees for performance beyond normal expectations.

Describe the three categories of variable pay.

Which of the following is typically a funding choice in profit-sharing plans?

The "clawbacks" provision in Civil Rights Act of 1964 allows a company to recover any incentive-based pay that was paid out during the prior three years if it would not have been paid under restated financial statements.

According to the Dodds-Frank Act, publicly listed companies now must allow shareholders to vote on executive compensation.

The most prevalent forms of organization-wide incentives are piece-rate systems, sales commissions, and individual bonuses.

Stock option plans give employees the right to purchase_____.

A free rider is a member of the group who contributes the most in a group venture.

Explain the salary-only approach of sales compensation.

Which of the following is true of recognition awards?

Cost reduction is classified as a work unit/team incentive.

Compensation given to an executive if he or she is forced to leave an organization is called a golden parachute.

Which of the following is typically classified as a regular benefit?