Question 1

Linking incentives to the organization's profits or stock price exposes employees to a high degree of risk.

Accepted Answer

A) True 
 B)False

Question 2

The decisions about merit pay are based on two factors: the individual's performance rating and the individual's:

Accepted Answer

A)   compa-ratio.
B)   seniority.
C)   pay grade.
D)   longevity.
E)   emotional quotient.F) None of the above
G) A) and E)

Question 3

Straight commission plans:

Accepted Answer

A)   imply that the employees receive a straight salary.
B)   are useful when the organization wants salespeople to concentrate on listening to customers.
C)   help to attract employees risk-averse employees.
D)   are common among insurance and real estate agents.
E)   are not common among car salespeople.F) A) and B)
G) C) and E)

Question 4

What are the different types of piecework rates? Explain each of them.

Accepted Answer

The two types of piecework rates are the...

Question 5

How can gainsharing be successful as a form of group incentive?

Accepted Answer

Gainsharing is most likely to succeed wh...

Question 6

Identify the disadvantage of using profit sharing plans.

Accepted Answer

A)   They cannot be used to improve the organization's performance as a whole.
B)   The employees may develop a narrow view of their roles in the organization.
C)   They cost more when the organization experiences financial difficulties.
D)   Sharing profit with the employees ultimately reduces the organization's profitability.
E)   Profit sharing is not directly linked to individual behavior.F) D) and E)
G) A) and E)

Question 7

Which of the following is true of a balanced scorecard?

Accepted Answer

A)   It encourages employees to compete at the expense of cooperating to achieve organizational goals.
B)   It allows employees to buy their company when it is experiencing financial problems.
C)   It combines the advantages of different incentive pay plans and helps employees understand the organization's goals.
D)   It increases cooperation but does little to motivate day-to-day effort or to attract and retain top individual performers.
E)   It is the only measure used by top management to measure the performance of HR professionals and managers.F) A) and D)
G) A) and C)

Question 8

Which of the following incentive plans would enable its employees to think like owners,taking a broad view of what they need to do in order to make the organization more effective?

Accepted Answer

A)   Merit pay
B)   Gain sharing
C)   Scanlon plan
D)   Performance bonuses
E)   Profit sharingF) B) and C)
G) A) and E)

Question 9

What are group bonuses and team awards? What are their advantages and disadvantages?

Accepted Answer

Bonuses for group performance tend to be...

Question 10

What should employees do to earn bonuses under the Scanlon plan?

Accepted Answer

A)   They should produce products at a rate which is much higher than the standard production time.
B)   They should create goodwill with customers and close as many sales as possible.
C)   They should follow a defined set of quality standard to produce the desired outcome.
D)   They should keep labor costs to a minimum and produce as much as possible with that amount of labor.
E)   They should improve their performance year after year so that they re-earn the bonus during each performance period.F) B) and D)
G) None of the above

Question 11

_____ provides a method for rewarding performance in all of the dimensions measured in the organization's performance management system.

Accepted Answer

A)   Differential piece rate
B)   Standard hour plan
C)   Merit pay
D)   Piece rate
E)   CommissionF) A) and E)
G) B) and E)

Question 12

Which of the following types of incentive plans are specifically designed to promote group performance?

Accepted Answer

A)   Performance bonuses
B)   Gainsharing
C)   Standard hour plans
D)   Merit pay
E)   CommissionsF) A) and E)
G) B) and D)

Question 13

By law,what is the minimum percentage of assets that an ESOP must invest in its company's stock?

Accepted Answer

A)   10
B)   26
C)   51
D)   60
E)   76F) A) and B)
G) C) and D)

Question 14

An organization uses 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.This incentive plan is referred to as:

Accepted Answer

A)   group bonus.
B)   merit pay plan.
C)   Scanlon plan.
D)   piecework rate.
E)   team award.F) C) and D)
G) B) and D)

Question 15

The _____ has required companies to more clearly report executive compensation levels and the company's performance relative to that of competitors.

Accepted Answer

A)   National Credit Union Administration
B)   Financial Industry Regulatory Authority
C)   Commodity Futures Trading Commission
D)   The Securities and Exchange Commission
E)   Omnibus Budget Reconciliation ActF) B) and C)
G) A) and D)

Question 16

Standard hour plans are likely to succeed if:

Accepted Answer

A)   most or all of a salesperson's compensation is in the form of commissions.
B)   employers keep labor costs to a minimum.
C)   the pay increase is linked to ratings on performance appraisals.
D)   employees want the extra money more than they want to work at a pace that feels comfortable.
E)   the organization values employee satisfaction and motivation more than profits.F) All of the above
G) B) and C)

Question 17

How do employee stock ownership plans differ from stock options?

Accepted Answer

Stock options give employees the right t...

Question 18

A balanced scorecard is a combination of performance measures directed toward the company's long- and short-term goals.

Accepted Answer

A) True 
 B)False

Question 19

In 2003,a company employee received an option to purchase the company's stock at $45 per share.If the stock is trading at $40 a share in 2005,the employee will most likely:

Accepted Answer

A)   exercise the option, receiving a gain of $5.
B)   exercise the option, receiving a gain of $40.
C)   would not bother to exercise the options.
D)   be eligible to obtain a price $45 per share.
E)   sell the shares to a third party slightly above the market price.F) B) and E)
G) A) and B)

Question 20

An incentive system in which an organization links pay increases to ratings on performance appraisals is referred to as:

Accepted Answer

A)   commission.
B)   a Scanlon plan.
C)   merit pay.
D)   gain sharing.
E)   profit sharing.F) A) and B)
G) C) and D)

Exam 12: Recognizing Employee Contributions With Pay

How do employee stock ownership plans differ from stock options?

Correct AnswerverifiedStock options give employees the right t...View AnswerShow Answer

Which of the following is true of a balanced scorecard?

Correct AnswerverifiedShow Answer

By law,what is the minimum percentage of assets that an ESOP must invest in its company's stock?

Correct AnswerverifiedShow Answer

A balanced scorecard is a combination of performance measures directed toward the company's long- and short-term goals.

Correct AnswerverifiedShow Answer

An organization uses 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.This incentive plan is referred to as:

Correct AnswerverifiedShow Answer

What should employees do to earn bonuses under the Scanlon plan?

Correct AnswerverifiedShow Answer

Linking incentives to the organization's profits or stock price exposes employees to a high degree of risk.

Correct AnswerverifiedShow Answer

_____ provides a method for rewarding performance in all of the dimensions measured in the organization's performance management system.

Correct AnswerverifiedShow Answer

The decisions about merit pay are based on two factors: the individual's performance rating and the individual's:

Correct AnswerverifiedShow Answer

Which of the following incentive plans would enable its employees to think like owners,taking a broad view of what they need to do in order to make the organization more effective?

Correct AnswerverifiedShow Answer

How can gainsharing be successful as a form of group incentive?

Correct AnswerverifiedGainsharing is most likely to succeed wh...View AnswerShow Answer

An incentive system in which an organization links pay increases to ratings on performance appraisals is referred to as:

Correct AnswerverifiedShow Answer

Straight commission plans:

Correct AnswerverifiedShow Answer

Identify the disadvantage of using profit sharing plans.

Correct AnswerverifiedShow Answer

Which of the following types of incentive plans are specifically designed to promote group performance?

Correct AnswerverifiedShow Answer

What are group bonuses and team awards? What are their advantages and disadvantages?

Correct AnswerverifiedBonuses for group performance tend to be...View AnswerShow Answer

Standard hour plans are likely to succeed if:

Correct AnswerverifiedShow Answer

The _____ has required companies to more clearly report executive compensation levels and the company's performance relative to that of competitors.

Correct AnswerverifiedShow Answer

In 2003,a company employee received an option to purchase the company's stock at $45 per share.If the stock is trading at $40 a share in 2005,the employee will most likely:

Correct AnswerverifiedShow Answer

What are the different types of piecework rates? Explain each of them.

Correct AnswerverifiedThe two types of piecework rates are the...View AnswerShow Answer

Correct Answer
verified
Stock options give employees the right t...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Gainsharing is most likely to succeed wh...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Bonuses for group performance tend to be...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The two types of piecework rates are the...
View Answer