Question 1

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

Question 2

The primary function of a merit increase grid is to

Accepted Answer

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

Question 3

Which of the following is a long-term incentive?

Accepted Answer

A)   sales commission
B)   group bonus
C)   merit pay
D)   stock option
E)   piece rateF) All of the above
G) C) and D)

Question 4

The balanced scorecard helps employees understand the organization's goals and how they can contribute to these goals.

Accepted Answer

A) True 
 B)False

Question 5

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 B)
G) C) and E)

Question 6

What are the implications of designing pay for organizational performance?

Accepted Answer

Many organizations offer incentive pay t...

Question 7

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

Question 8

An employee at CellWorks who produces 10 components in an hour earns $9 ($.90 × 10) per hour,while another employee who produces 15 components earns $13.50 ($.90 × 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) B) and E)
G) A) and D)

Question 9

A _____ gives the biggest pay increases to the best performers and to those whose pay is relatively low for their job.

Accepted Answer

A)   piecework pay system
B)   merit pay system
C)   standard hour plan
D)   differential plan
E)   skill-based planF) A) and B)
G) A) and D)

Question 10

The many kinds of incentive pay fall into three broad categories: _____.

Accepted Answer

A)   incentives linked to individual,group,or organizational performance
B)   incentives linked to output,productivity,or quality of a product
C)   pay linked to goals,focus,or achievements of an organization
D)   pay related to base salary,bonus,and travel allowance
E)   incentives obtained in the form of company shares,gift coupons,and trial productsF) A) and E)
G) C) and D)

Question 11

Which of the following is most likely a consequence of paying most or all of a salesperson's compensation in the form of commissions?

Accepted Answer

A)   It encourages the salesperson to focus on closing the sale.
B)   It frees the salesperson to focus on developing customer goodwill.
C)   It encourages teamwork over individual performance.
D)   It makes the employee appreciate the reward as the reward relates to economic conditions.
E)   It will quickly become expensive for the employer.F) A) and E)
G) B) and E)

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

Wayan Inc. ,a health insurance company,pays clerks an incentive based on the average amount of work completed per hour.Wayan pays $10 for processing 20 invoices per hour.An employee who processes 30 invoices would earn $15 per hour.Hence,Wayan pays the same rate per invoice no matter how many invoices an employee processes per hour.Which type of incentive pay does this scenario illustrate?

Accepted Answer

A)   straight piecework plan
B)   falling differential
C)   rising differential
D)   standard hour plan
E)   straight commission planF) A) and B)
G) B) and E)

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

Which of the following best describes 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)   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 the employees as a part of their salaryF) All of the above
G) B) and C)

Question 16

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

Exam 13: Recognizing Employee Contributions With Pay

Identify the disadvantage of using profit-sharing plans.

Correct Answer
verified

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

Correct Answer
verified

What are the implications of designing pay for organizational performance?

Correct Answer
verified
Many organizations offer incentive pay t...
View Answer

The balanced scorecard helps employees understand the organization's goals and how they can contribute to these goals.

Correct Answer
verified

A _____ gives the biggest pay increases to the best performers and to those whose pay is relatively low for their job.

Correct Answer
verified

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

Correct Answer
verified

The many kinds of incentive pay fall into three broad categories: _____.

Correct Answer
verified

Which of the following best describes profit sharing?

Correct Answer
verified

Which of the following is a long-term incentive?

Correct Answer
verified

Which of the following is most likely a consequence of paying most or all of a salesperson's compensation in the form of commissions?

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

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 Answer
verified

An employee at CellWorks who produces 10 components in an hour earns $9 ($.90 × 10) per hour,while another employee who produces 15 components earns $13.50 ($.90 × 15) .This is an example of a

Correct Answer
verified

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 Answer
verified

The primary function of a merit increase grid is to

Correct Answer
verified

Exam 13: Recognizing Employee Contributions With Pay

Identify the disadvantage of using profit-sharing plans.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

What are the implications of designing pay for organizational performance?

Correct AnswerverifiedMany organizations offer incentive pay t...View AnswerShow Answer

The balanced scorecard helps employees understand the organization's goals and how they can contribute to these goals.

Correct AnswerverifiedShow Answer

A _____ gives the biggest pay increases to the best performers and to those whose pay is relatively low for their job.

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

The many kinds of incentive pay fall into three broad categories: _____.

Correct AnswerverifiedShow Answer

Which of the following best describes profit sharing?

Correct AnswerverifiedShow Answer

Which of the following is a long-term incentive?

Correct AnswerverifiedShow Answer

Which of the following is most likely a consequence of paying most or all of a salesperson's compensation in the form of commissions?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

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

An employee at CellWorks who produces 10 components in an hour earns $9 ($.90 × 10) per hour,while another employee who produces 15 components earns $13.50 ($.90 × 15) .This is an example of a

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

The primary function of a merit increase grid is to

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
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Correct Answer
verified
Many organizations offer incentive pay t...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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