Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

Jules & Co.,a smartphone manufacturing company,provides wages to its employees based on the number of smartphones the workers assemble.The more the employees assemble,the more they earn.This type of plan is called:

Accepted Answer

A)   piecework rate plan.
B)   merit pay plan.
C)   Scanlon plan.
D)   profit sharing plan.
E)   standard hour plan.F) A) and B)
G) B) and D)

Question 3

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) B) and E)
G) C) and D)

Question 4

Which of the following statements is true of a performance bonus?

Accepted Answer

A)   It is designed to reward group performance.
B)   It should be re-earned by employees during each performance period.
C)   It is rolled into base pay and provided yearly or monthly.
D)   It lacks flexibility and hence it is less popular.
E)   It is exclusively linked to subjective ratings, rather than objective performance measures.F) D) and E)
G) All of the above

Question 5

Mike,the CEO of an automobile company,believes that profit sharing has increased the productivity of his organization.He feels that an incentive plan motivates employees to be more productive.Which of the following statements strengthens Mike's argument?

Accepted Answer

A)   In a profit-sharing plan, employees are the owners of the organization.
B)   Profit sharing helps employees to cooperate and to focus on organizational interests.
C)   Profit sharing makes employees workaholics.
D)   In profit sharing, employees contribute their base salary for the development of the organization.
E)   Profit sharing benefits employees even if the organization makes less profit or no profit.F) B) and D)
G) B) and E)

Question 6

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)   Securities and Exchange Commission
E)   Omnibus Budget Reconciliation ActF) All of the above
G) A) and B) D

Question 7

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

Accepted Answer

A)   They should produce products at a rate that 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) C) and D)
G) D) and E) D

Question 8

Kelltech Inc.is a sales and marketing company based in Baltimore.It wants to combine the advantages of different incentive-pay plans and help employees understand the organization's goals.Which of the following will help the company accomplish this goal?

Accepted Answer

A)   A Scanlon plan
B)   A balanced scorecard
C)   A dashboard
D)   An employee stock ownership plan
E)   A differential piece rate systemF) B) and C)
G) All of the above B

Question 9

_____ is a type of incentive pay in which payments are a percentage of an organization's profits and do not become part of its employees' base salary.

Accepted Answer

A)   Merit pay
B)   Gainsharing
C)   Group bonus
D)   Profit sharing
E)   CommissionF) B) and E)
G) A) and B)

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

Another quantity-oriented incentive for ...

Question 12

The costs associated with profit sharing increase substantially when the organization experiences financial difficulties.

Accepted Answer

A) True 
 B)False

Question 13

Under the team awards type of group incentive,cost savings is excluded as a performance measure.

Accepted Answer

A) True 
 B)False

Question 14

If employee participation in making pay-related decisions is encouraged in an organization,then:

Accepted Answer

A)   administering the plans become simple.
B)   the organization's interests can be best protected.
C)   the cost borne by the organization decreases.
D)   monitoring performance becomes difficult.
E)   the incentive plan has more chances of being successful.F) D) and E)
G) A) and C)

Question 15

_____ 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 16

Which of the following is an advantage of group incentives?

Accepted Answer

A)   They always use a broad range of performance measures.
B)   They result in groups trying to outdo one another in satisfying customers and thus create healthy competition.
C)   They encourage employees to achieve their goals irrespective of the cooperation of team members.
D)   They reward the performance of all the employees at a facility.
E)   They always result in cooperation among team members without any competition.F) A) and B)
G) A) and C)

Question 17

The primary function of a merit increase grid is to:

Accepted Answer

A)   make the increases consistent.
B)   further increase the pay for those whose pay is relatively higher for their job.
C)   increase the employees' compa-ratio.
D)   stabilize economic conditions.
E)   increase incentives on a year-by-year basis.F) B) and E)
G) A) and B)

Question 18

Alex,a researcher,claims that an exceptional employee with low pay will benefit more than his or her co-workers,who receive significantly better pay but perform below expectations,in a merit pay system.Which of the following statements strengthens Alex's claim?

Accepted Answer

A)   An employee receiving high pay performs better than other employees.
B)   The quality of the output produced by employees with high pay is better than that of other employees.
C)   Employees with high pay complete their work before the standard time.
D)   A higher pay range results in lower compa-ratios causing a bigger merit raise.
E)   The average pay in a merit pay system can only rise by a maximum of 2% each year.F) D) and E)
G) A) and B)

Question 19

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) A) and C)
G) C) and D)

Question 20

Standard hour plans are quality-oriented incentives for professional employees.

Accepted Answer

A) True 
 B)False

Exam 13: Recognizing Employee Contributions With Pay

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

Correct AnswerverifiedShow Answer

Jules & Co.,a smartphone manufacturing company,provides wages to its employees based on the number of smartphones the workers assemble.The more the employees assemble,the more they earn.This type of plan is called:

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

Which of the following statements is true of a performance bonus?

Correct AnswerverifiedShow Answer

Mike,the CEO of an automobile company,believes that profit sharing has increased the productivity of his organization.He feels that an incentive plan motivates employees to be more productive.Which of the following statements strengthens Mike's argument?

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 AnswerverifiedD

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

Correct AnswerverifiedD

Kelltech Inc.is a sales and marketing company based in Baltimore.It wants to combine the advantages of different incentive-pay plans and help employees understand the organization's goals.Which of the following will help the company accomplish this goal?

Correct AnswerverifiedB

_____ is a type of incentive pay in which payments are a percentage of an organization's profits and do not become part of its employees' base salary.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

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

The costs associated with profit sharing increase substantially when the organization experiences financial difficulties.

Correct AnswerverifiedShow Answer

Under the team awards type of group incentive,cost savings is excluded as a performance measure.

Correct AnswerverifiedShow Answer

If employee participation in making pay-related decisions is encouraged in an organization,then:

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

Which of the following is an advantage of group incentives?

Correct AnswerverifiedShow Answer

The primary function of a merit increase grid is to:

Correct AnswerverifiedShow Answer

Alex,a researcher,claims that an exceptional employee with low pay will benefit more than his or her co-workers,who receive significantly better pay but perform below expectations,in a merit pay system.Which of the following statements strengthens Alex's claim?

Correct AnswerverifiedShow Answer

Identify the disadvantage of using profit sharing plans.

Correct AnswerverifiedShow Answer

Standard hour plans are quality-oriented incentives for professional employees.

Correct AnswerverifiedShow Answer

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D

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Another quantity-oriented incentive for ...
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