Question 1

What are the different types of incentive pay? How should organizations choose the right type of incentive pay?

Accepted Answer

The many kinds of incentive pay fall int...

Question 2

What are the different types of pay for rewarding individual performance?

Accepted Answer

Another quantity-oriented incentive for ...

Question 3

Which of the following is a method where a combination of performance measures directed toward the company's long- and short-term goals are used as the basis for awarding incentive pay?

Accepted Answer

A)   Merit pay
B)   Profit sharing
C)   Gainsharing
D)   Balanced scorecard
E)   Scanlon planF) B) and E)
G) C) and D)

Question 4

Piecework rates are most suited for routine,standardized jobs with output that is easy to measure.

Accepted Answer

A) True 
 B)False

Question 5

In stock ownership plans,employees may not see a strong link between their actions and the company's stock price.

Accepted Answer

A) True 
 B)False

Question 6

What is profit sharing?

Accepted Answer

A)   A gainsharing program in which employees receive a bonus if the ratio of labor costs to the sales value of production is below a set standard.
B)   An incentive pay in which payments are a percentage of the organization's profits and do not become part of the employees' base salary.
C)   A group incentive program that measures improvements in productivity and effectiveness and distributes a portion of profit to employees.
D)   A combination of performance measures directed toward the company's profit and used as the basis for awarding incentive pay.
E)   An incentive plan where a percentage of the previous year's profits is provided to employees as a part of salary.F) A) and B)
G) B) and D)

Question 7

Gainsharing addresses the challenge of identifying appropriate performance measures for complex jobs.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is an arrangement in which the organization distributes shares of stock to all its employees by placing it in a trust?

Accepted Answer

A)   Stock options
B)   Employee stock ownership plan
C)   Scanlon plan
D)   Collective stock options
E)   Profit sharing planF) A) and E)
G) A) and D)

Question 9

What is the difference between bonuses and team awards?

Accepted Answer

A)   Bonuses are for bigger work groups whereas team awards are for small teams.
B)   Bonuses reward individual performance whereas team awards encourage cooperation.
C)   Bonuses are usually given to employees who meet deadlines whereas team awards are given only when the team as a whole meets the targets.
D)   Bonuses encourages competition among individuals whereas team awards only foster cooperation.
E)   Bonuses reward attainment of goals measured in terms of physical output whereas team awards reward performance in terms of cost savings.F) A) and D)
G) A) and C)

Question 10

Piecework rate plans are most suited for _____.

Accepted Answer

A)   innovative tasks
B)   non-standard jobs
C)   managerial jobs
D)   jobs with difficult-to-measure output
E)   routine, standardized jobsF) A) and B)
G) All of the above

Question 11

Employees should exercise the stock options even if the stock price has decreased.

Accepted Answer

A) True 
 B)False

Question 12

When an employee's pay is calculated as a percentage of sales,it is referred to as:

Accepted Answer

A)   commission.
B)   gain sharing.
C)   merit plan.
D)   variable wage plan.
E)   profit sharing.F) A) and C)
G) C) and D)

Question 13

A major problem with ESOPs is that:

Accepted Answer

A)   they carry a significant risk for employees.
B)   employees are not allowed to participate in votes by shareholders.
C)   the stocks within the trust are too widely diversified to earn high returns.
D)   any earnings from the trust holdings are taxed at an extremely high rate.
E)   they result in reduced profitability for the employees.F) C) and E)
G) B) and D)

Question 14

Under profit sharing,payments are a percentage of the organization's profits and become part of the employees' base salary.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is a disadvantage of a merit pay system?

Accepted Answer

A)   It does not relate the rewards to economic conditions.
B)   It cannot be used effectively in performance appraisals.
C)   Comparative pay is not considered in its evaluation.
D)   It is not consistent with performance management's dimensions.
E)   It can quickly become expensive for the company.F) C) and D)
G) B) and E)

Question 16

What is the drawback of stock ownership as a form of incentive pay?

Accepted Answer

A)   Financial benefits mostly come when the employee leaves the organization.
B)   Employees have the right to participate in votes by shareholders, hence reducing the negotiating power of the employer.
C)   It causes the employers to lose control over their employees.
D)   The employees will not benefit even if the organization is performing well.
E)   Stock options do not provide any ownership to employees, instead it offers an equivalent sum.F) C) and D)
G) A) and B)

Question 17

Which of the following is an advantage of using balanced scorecard?

Accepted Answer

A)   It eliminates the need to communicate the details of the plan to the employees.
B)   It eliminates managerial effort when providing incentives to employees.
C)   It provides more pay to all employees in the organization.
D)   It reduces employee stress as it does not focus on financial targets.
E)   It helps employees understand the organization's goals.F) B) and C)
G) C) and D)

Question 18

Which of the following is true about a piece rate plan?

Accepted Answer

A)   It can be used for all types of jobs and in all types of industries.
B)   It is best suited for complex jobs and tasks.
C)   It can be used to encourage team work and collaboration.
D)   It has a direct link between the work and how much the employee earns.
E)   It encourages peers to perform as well as the co-workers and reduce conflicts.F) None of the above
G) A) and E)

Question 19

Incentive pay is influential because the amount paid is linked to certain predefined behaviors or outcomes.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following types of incentive pay plans are used to reward individual performance?

Accepted Answer

A)   Gainsharing
B)   Merit pay
C)   Scanlon plan
D)   Profit sharing
E)   Stock ownershipF) B) and E)
G) B) and D)

Exam 12: Recognizing Employee Contributions With Pay

Which of the following types of incentive pay plans are used to reward individual performance?

Correct AnswerverifiedShow Answer

Piecework rates are most suited for routine,standardized jobs with output that is easy to measure.

Correct AnswerverifiedShow Answer

What are the different types of incentive pay? How should organizations choose the right type of incentive pay?

Correct AnswerverifiedThe many kinds of incentive pay fall int...View AnswerShow Answer

Which of the following is a disadvantage of a merit pay system?

Correct AnswerverifiedShow Answer

Gainsharing addresses the challenge of identifying appropriate performance measures for complex jobs.

Correct AnswerverifiedShow Answer

What is the difference between bonuses and team awards?

Correct AnswerverifiedShow Answer

When an employee's pay is calculated as a percentage of sales,it is referred to as:

Correct AnswerverifiedShow Answer

Which of the following is an advantage of using balanced scorecard?

Correct AnswerverifiedShow Answer

Which of the following is true about a piece rate plan?

Correct AnswerverifiedShow Answer

Incentive pay is influential because the amount paid is linked to certain predefined behaviors or outcomes.

Correct AnswerverifiedShow Answer

In stock ownership plans,employees may not see a strong link between their actions and the company's stock price.

Correct AnswerverifiedShow Answer

What is the drawback of stock ownership as a form of incentive pay?

Correct AnswerverifiedShow Answer

Which of the following is a method where a combination of performance measures directed toward the company's long- and short-term goals are used as the basis for awarding incentive pay?

Correct AnswerverifiedShow Answer

Which of the following is an arrangement in which the organization distributes shares of stock to all its employees by placing it in a trust?

Correct AnswerverifiedShow Answer

Employees should exercise the stock options even if the stock price has decreased.

Correct AnswerverifiedShow Answer

A major problem with ESOPs is that:

Correct AnswerverifiedShow Answer

What is profit sharing?

Correct AnswerverifiedShow Answer

Piecework rate plans are most suited for _____.

Correct AnswerverifiedShow Answer

Under profit sharing,payments are a percentage of the organization's profits and become part of the employees' base salary.

Correct AnswerverifiedShow Answer

What are the different types of pay for rewarding individual performance?

Correct AnswerverifiedAnother quantity-oriented incentive for ...View AnswerShow Answer

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The many kinds of incentive pay fall int...
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Another quantity-oriented incentive for ...
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