Question 1

Successful gainsharing plans include employee stock ownership plans.

Accepted Answer

A) True 
 B)False

Question 2

A company provides wages to its employees based on the amount workers produce.The more employees produce,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) None of the above
G) A) and B)

Question 3

What is balanced scorecard? What is its purpose? What are the advantages of using a balanced scorecard?

Accepted Answer

The balanced scorecard is a combination ...

Question 4

Why do organizations use profit sharing?

Accepted Answer

A)   It has been established that profit sharing helps organizations perform better.
B)   It makes employees feel that they have control over the company's profits.
C)   It costs less when the organization is experiencing financial difficulties.
D)   It helps employees find a direct relation between their performance and gain.
E)   It motivates employees more than individual incentives.F) C) and D)
G) A) and E)

Question 5

In merit pay programs,an individual's compa-ratio represents his/her:

Accepted Answer

A)   pay relative to performance of other workers in the industry.
B)   pay relative to average pay.
C)   comparable worth versus others.
D)   ratio of pay to benefits.
E)   the average worth of the skills possessed by the individual.F) A) and B)
G) A) and C)

Question 6

An employee who produces 10 components in an hour earns $9 ($.90 X 10) per hour,while an employee who produces 15 components earns $13.50 ($.90 x 15) .This is an example of a:

Accepted Answer

A)   commission plan.
B)   differential piece rate plan.
C)   direct commission plan.
D)   profit sharing plan.
E)   straight piecework plan.F) None of the above
G) C) and E)

Question 7

Merit pay incentive system is usually used to attract employees who are more team-oriented.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is an incentive plan that is intended to improve the overall performance of an organization?

Accepted Answer

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

Question 9

An effective incentive pay plan should:

Accepted Answer

A)   have performance measures based on employees' requirements.
B)   not be provided as a direct percentage of employees' performance.
C)   encourage group performance and dispirit individual achievements.
D)   be the same for all types of employees in the organization.
E)   have performance measures linked to the organization's goals.F) B) and E)
G) B) and C)

Question 10

Differential piece rates system refers to:

Accepted Answer

A)   an incentive pay plan in which the employer pays the rate per piece based on the difference in performance of employees.
B)   a wage system designed for salespeople who earn a differential pay for every piece sold.
C)   an incentive pay in which the piece rate is higher when a greater amount is produced.
D)   a system of linking pay increases to ratings on performance appraisals.
E)   an incentive pay plan where every employee is paid different wages based on the skills they possess.F) D) and E)
G) A) and B)

Question 11

Which of the following 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 not a one time reward in most of the cases.F) A) and D)
G) A) and C)

Question 12

An organization should always communicate with employees when changing an incentive plan.

Accepted Answer

A) True 
 B)False

Question 13

Paying most or all of a salesperson's compensation in the form of commissions encourages the salesperson to focus on:

Accepted Answer

A)   closing the sale.
B)   developing customer goodwill.
C)   working as a team member.
D)   building a relationship with the customer.
E)   improving the quality of customer experience.F) A) and D)
G) All of the above

Question 14

Employee stock ownership plan is an arrangement in which the organization distributes shares of stock to all its employees by placing it in a trust.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is a short-term incentive?

Accepted Answer

A)   Return on investment
B)   Base salary
C)   Stock options
D)   Stock purchase plans
E)   Company sharesF) A) and C)
G) B) and C)

Question 16

Generally,team awards do not use cost savings as a performance measure.

Accepted Answer

A) True 
 B)False

Question 17

As an incentive to work efficiently,some organizations pay production workers a ____,a wage based on the amount they produce.

Accepted Answer

A)   merit pay
B)   commission
C)   standard hour pay
D)   piecework rate
E)   special bonusF) A) and E)
G) D) and E)

Question 18

The link between employees' performance and pay is harder to establish in:

Accepted Answer

A)   piece rate plans.
B)   merit pay plans.
C)   standard hour plans.
D)   stock ownership plans.
E)   Scanlon plans.F) A) and B)
G) B) and D)

Question 19

The balanced-scorecard approach is not particularly useful in designing executive pay.

Accepted Answer

A) True 
 B)False

Question 20

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 of the following should be used by this organization?

Accepted Answer

A)   Profit sharing plan
B)   Piecework rates
C)   Merit pay system
D)   Scanlon plan
E)   Balanced scorecardF) D) and E)
G) B) and D)

Exam 12: Recognizing Employee Contributions With Pay

Why do organizations use profit sharing?

Correct AnswerverifiedShow Answer

Merit pay incentive system is usually used to attract employees who are more team-oriented.

Correct AnswerverifiedShow Answer

Employee stock ownership plan is an arrangement in which the organization distributes shares of stock to all its employees by placing it in a trust.

Correct AnswerverifiedShow Answer

What is balanced scorecard? What is its purpose? What are the advantages of using a balanced scorecard?

Correct AnswerverifiedThe balanced scorecard is a combination ...View AnswerShow Answer

Generally,team awards do not use cost savings as a performance measure.

Correct AnswerverifiedShow Answer

An employee who produces 10 components in an hour earns $9 ($.90 X 10) per hour,while an employee who produces 15 components earns $13.50 ($.90 x 15) .This is an example of a:

Correct AnswerverifiedShow Answer

A company provides wages to its employees based on the amount workers produce.The more employees produce,the more they earn.This type of plan is called:

Correct AnswerverifiedShow Answer

Which of the following is true of a performance bonus?

Correct AnswerverifiedShow Answer

The link between employees' performance and pay is harder to establish in:

Correct AnswerverifiedShow Answer

Paying most or all of a salesperson's compensation in the form of commissions encourages the salesperson to focus on:

Correct AnswerverifiedShow Answer

The balanced-scorecard approach is not particularly useful in designing executive pay.

Correct AnswerverifiedShow Answer

Differential piece rates system refers to:

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 of the following should be used by this organization?

Correct AnswerverifiedShow Answer

An organization should always communicate with employees when changing an incentive plan.

Correct AnswerverifiedShow Answer

Successful gainsharing plans include employee stock ownership plans.

Correct AnswerverifiedShow Answer

Which of the following is an incentive plan that is intended to improve the overall performance of an organization?

Correct AnswerverifiedShow Answer

In merit pay programs,an individual's compa-ratio represents his/her:

Correct AnswerverifiedShow Answer

Which of the following is a short-term incentive?

Correct AnswerverifiedShow Answer

An effective incentive pay plan should:

Correct AnswerverifiedShow Answer

As an incentive to work efficiently,some organizations pay production workers a ____,a wage based on the amount they produce.

Correct AnswerverifiedShow Answer

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The balanced scorecard is a combination ...
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