Question 1

What is an organization-level incentive plan that is intended to motivate employees to align their activities with the organization's goals?

Accepted Answer

A)   profit sharing
B)   gainsharing
C)   merit pay
D)   group bonus
E)   Scanlon planF) A) and E)
G) A) and D)

Question 2

Most pay-related communications come through

Accepted Answer

A)   the company newsletter.
B)   one designated company speaker.
C)   rumors between employees from various departments.
D)   an employee's annual review.
E)   individual discussions between employees and their supervisors.F) C) and E)
G) B) and D)

Question 3

Group bonuses typically reward the performance of all employees in an organization.

Accepted Answer

A) True 
 B)False

Question 4

An organization wants to provide its employees information about what its goals are and what it expects employees to accomplish. It is planning to implement an incentive plan that helps employees understand the organization's goals. Which plan should be used by this organization?

Accepted Answer

A)   a retention bonus
B)   a piecework rate system
C)   a merit pay system
D)   the Scanlon plan
E)   a balanced scorecardF) D) and E)
G) B) and D)

Question 5

Which of the following best describes a balanced scorecard?

Accepted Answer

A)   a combination of performance measures directed toward the company's long- and short-term goals and used as the basis for awarding incentive pay
B)   a performance review process where the organization collects feedback from customers, managers, and subordinates; assigns ratings; and lists them on the company's performance card
C)   an arrangement in which the organization distributes shares of stock to all its employees by placing the stock into a trust
D)   a type of incentive pay in which payments are a percentage of the organization's profits and do not become part of the employees' base salary
E)   a system designed to measure the performance of HR personnel based on the quality of recruitmentF) B) and D)
G) C) and E)

Question 6

Kokan Inc., a marketing company, includes stock options and stock purchase plans in executive pay. Executives at the company will want to do what is best for Kokan because that will cause the value of the stock to grow. What is being exemplified in this scenario?

Accepted Answer

A)   Scanlon plan
B)   balanced scorecard
C)   long-term incentives
D)   merit plan
E)   short-term incentivesF) B) and C)
G) A) and E)

Question 7

What is the 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) A) and E)
G) B) and E)

Question 8

Organizations customize their balanced scorecards according to their

Accepted Answer

A)   earnings.
B)   profits, benefits, and incentives.
C)   markets, products, and objectives.
D)   objectives as set by the organization's CEO and board of directors.
E)   research on what drives employee motivation.F) A) and C)
G) A) and B)

Question 9

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 10

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) B) and D)

Question 11

What is a disadvantage of using group bonuses?

Accepted Answer

A)   Physical outputs are not rewarded.
B)   It reduces the level of cooperation between the members of the group.
C)   The performance measures used are narrow.
D)   It could result in competition among groups.
E)   It cannot be used to promote specific goals.F) B) and C)
G) C) and D)

Question 12

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) A) and E)
G) All of the above

Question 13

Joe, a supervisor, believes that employees should participate in pay-related decisions. He says that it will most likely help in the success of incentive plans, and the plans are more likely to influence employee behavior as desired. Which statement weakens this argument?

Accepted Answer

A)   Employees will make decisions that are in their best interests at the expense of the organization's interests.
B)   It is difficult to monitor an employee's work output when decisions are made by the employee.
C)   When employees become more involved in pay decisions, they neglect the work assigned to them.
D)   Employees should be a part of the human resource department to be involved in pay-related decisions.
E)   It will have a negative impact on the top-level management of the company.F) C) and D)
G) B) and D)

Question 14

________ is a group incentive program that measures improvements in productivity and effectiveness and distributes a portion of each gain to employees.

Accepted Answer

A)   Profit rate
B)   Gainsharing
C)   Commission sharing
D)   Merit rate
E)   Group bonusF) C) and D)
G) A) and E)

Question 15

A merit pay incentive system is used to attract employees who are more team-oriented.

Accepted Answer

A) True 
 B)False

Question 16

In the process of designing incentives, managers should make sure that

Accepted Answer

A)   all the employees are paid the same amount.
B)   even the lowest performing employees are rewarded.
C)   employees focus only on completing the task quickly.
D)   employees believe that the pay plan is fair.
E)   they hire employees who consider earning money as the sole reason to perform well.F) B) and E)
G) None of the above

Question 17

Which incentive plan 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)   gainsharing
C)   the Scanlon plan
D)   performance bonuses
E)   profit sharingF) All of the above
G) A) and E)

Question 18

In which condition is it an advantage when group incentives encourage competition between groups of employees?

Accepted Answer

A)   when concern for costs obscures customer service
B)   when groups try to outdo one another in satisfying customers
C)   when competition replaces cooperation to meet company goals
D)   when competition for sales obscures the importance of ethical behavior
E)   when performance goals consider only one objective, such as sales growthF) B) and C)
G) A) and E)

Question 19

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

Accepted Answer

A)   They should produce products at a rate 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 standards 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 E)
G) A) and B)

Question 20

What are group bonuses and team awards?

Accepted Answer

Bonuses for group performance tend to be...

Exam 13: Recognizing Employee Contributions With Pay

What is the 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

Joe, a supervisor, believes that employees should participate in pay-related decisions. He says that it will most likely help in the success of incentive plans, and the plans are more likely to influence employee behavior as desired. Which statement weakens this argument?

Correct AnswerverifiedShow Answer

Organizations customize their balanced scorecards according to their

Correct AnswerverifiedShow Answer

A merit pay incentive system is used to attract employees who are more team-oriented.

Correct AnswerverifiedShow Answer

Group bonuses typically reward the performance of all employees in an organization.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

What is an organization-level incentive plan that is intended to motivate employees to align their activities with the organization's goals?

Correct AnswerverifiedShow Answer

What are group bonuses and team awards?

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

Most pay-related communications come through

Correct AnswerverifiedShow Answer

Identify the disadvantage of using profit-sharing plans.

Correct AnswerverifiedShow Answer

Kokan Inc., a marketing company, includes stock options and stock purchase plans in executive pay. Executives at the company will want to do what is best for Kokan because that will cause the value of the stock to grow. What is being exemplified in this scenario?

Correct AnswerverifiedShow Answer

A major problem with ESOPs is that

Correct AnswerverifiedShow Answer

In which condition is it an advantage when group incentives encourage competition between groups of employees?

Correct AnswerverifiedShow Answer

An organization wants to provide its employees information about what its goals are and what it expects employees to accomplish. It is planning to implement an incentive plan that helps employees understand the organization's goals. Which plan should be used by this organization?

Correct AnswerverifiedShow Answer

Which incentive plan 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

________ is a group incentive program that measures improvements in productivity and effectiveness and distributes a portion of each gain to employees.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following best describes a balanced scorecard?

Correct AnswerverifiedShow Answer

What is a disadvantage of using group bonuses?

Correct AnswerverifiedShow Answer

In the process of designing incentives, managers should make sure that

Correct AnswerverifiedShow 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
Bonuses for group performance tend to be...
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

Correct Answer
verified

Correct Answer
verified