ch. 10-compensation

A penalty for poor performance rather than reward for good is an example of: ␣ ␣ A. benchmarking. B. a reengineering plan. C. a Rowan plan. D. a reverse incentive plan.

a reverse incentive plan

Which of the following is not a problem with team compensation? ␣ ␣ A. Complexity B. Control C. Consistency D. Communications

consistency

The trend in recent variable-pay design is to combine the best of _____ and _____ plans. ␣ ␣ A. individual; group B. gain-sharing; profit-sharing C. short-term; long-term D. long-term; short-term

gain sharing; profit sharing

In gain sharing plan formulas, _____ is/are the numerator and _____ the denominator. ␣ ␣ A. productivity measures; inputs B. productivity measures; labor inputs C. costs and scrap rate; revenues D. labor inputs; productivity measures

labor inputs/productivity measures

All of the following are conditions supporting use of individual incentives except: ␣ ␣ A. task accomplishment is independent of others. B. the worker has a strong commitment to their profession. C. production methods and labor mix are stable. D. presence of a union

presence of a union

_____ offer(s) a reward pool based upon achieving performance targets and communicates organizational priorities. ␣ ␣ A. The balanced scorecard B. Stock options C. Deferred profit sharing D. Cash profit sharing

the balanced scorecard

All of the following factors except _____ have been associated with success of Scanlon/Rucker plans. ␣ ␣ A. the presence of a union B. managers open to criticism C. competent supervision D. cooperative union-management attitudes

the presence of a union

A _____ plan divides a task into simple actions and determines the time an average worker takes to complete each action. ␣ ␣ A. standard hour B. Rowan C. Bedeaux D. Merrick

beduaux

The purpose of this variable pay plan is to foster a "one for all" culture and to educate employees about business. ␣ ␣ A. Team incentives B. Cash profit sharing C. Balanced score card D. Stock options

cash profit sharing

The variable pay plan with the highest instrumentality is ____. ␣ ␣ A. gain sharing B. team incentives C. a balanced scorecard D. stock ownership

gain sharing

Components identified as vital to the success of both Scanlon and Rucker plans are: ␣ ␣ A. top management support and employee acceptance. B. a flexible and accepted pay out formula. C. union and top management support. D. a productivity norm and effective worker committees.

a productivity norm and effective worker commitees

Compensation security is highest for workers who fail to complete tasks within the standard time under the _____ plan? ␣ ␣ A. Halsey 50-50 B. Gantt C. Taylor D. Rowan

gantt

An incentive system with three piecework rates is the _____ plan. ␣ ␣ A. Taylor B. Gantt C. Halsey 50-50 D. Merrick

merrick

Which of the following does not use the time period per unit of production to determine the rate? ␣ ␣ A. Gantt plan B. Rowan plan C. Halsey 50-50 method D. Merrick system

merrick system

All of the following are true regarding merit pay except _______ ␣ A. it has a small, but significant effect on performance. B. removal of merit pay lowers satisfaction but not performance. C. departments and units with merit pay show higher performance. D. merit pay has a sorting effect.

removal of merit pay lowers satisfaction but not performance

_____ have(has) advantages of having minimal impact on the company's financial statements. ␣ ␣ A. Cash profit sharing B. A balanced scorecard C. Stock options D. Deferred profit sharing

stock options

The common feature to all types of incentive plans is: ␣ ␣ A. a standard of performance to determine magnitude of incentive pay. B. a sharing formula between worker and employer. C. penalties for poor performance. D. limits on magnitude of incentive pay.

a standard of perfomrnace to determine magnitude of incentive pay

All of the following are human resource capabilities performance indicators used for group incentive plans except: ␣ ␣ A. employee satisfaction. B. total recruitment costs. C. promotability index. D. accuracy/error rates.

accuracy/error rates

Which of the following is not an advantage of group incentive pay plans? ␣ ␣ A. Performance measures are easier to develop than for individual plans B. Cooperation within and across groups is encouraged C. Compensation risk to income stability is reduced D. Employee participation in decision-making increases

compensation risk to income stability is reduced

Which of the following is not an advantage of team incentives? ␣ ␣ A. Stimulates problem solving B. May better reflect how work is performed C. Encourages competition between teams D. Minimizes distinctions between team members

encourages competition between teams

The best variable pay plan for employees when company financial performance is poor is ____. ␣ ␣ A. profit sharing B. a balanced scorecard C. stock ownership D. gain sharing

gain sharing

Advantages of individual incentive plans include all of the following except: ␣ ␣ A. lowered production costs. B. less direct supervision. C. greater trust between workers and management. D. higher productivity.

greater trust between workers and management

When a firm is _____ on business risk and outcomes are ____, corporate performance is higher without any incentive plans. ␣ ␣ A. high; well defined B. high; uncertain C. low; well defined D. low; uncertain

high;uncertain

More complex gain sharing plans create needs for: ␣ ␣ A. higher levels of trust among participants and more effective communication. B. greater variety of incentives and more effective communication. C. revisions in the management worker split and revisions to the scope of the formula. D. more effective communication and greater variety of incentives.

higher levels of trust among participants

Which of the following is not a long-term incentive plan? ␣ ␣ A. ESOPs B. Broad-based option plans (BBOPs) C. Improshares D. Performance plans

imporshares

Which gain sharing plan is most similar to the standard hour plan? ␣ ␣ A. Scanlon B. Improshare C. Rucker D. Cash profit sharing

improshare

Usually _____ are awarded for exceptional performance, often on special projects or for performance that so exceeds expectations as to be deserving of an add-on bonus. ␣ ␣ A. variable pay awards B. individual spot awards C. lump-sum bonuses D. merit pay

individual spot awards

Hoarding star performers, reluctance to accept new team members and resistance to transferring team members are examples of which team-related compensation problem? ␣ ␣ A. Level B. Large variety of teams C. Pay plan complexity D. Control

level

The two most commonly used team incentive performance standards are: ␣ ␣ A. productivity and quality. B. productivity and customer satisfaction. C. financial performance and quality. D. customer satisfaction and financial performance

productivity and customer satisfaction

Surveys show the most popular type of variable pay plan is ____________ ␣ ␣ A. stock options. B. gainsharing. C. individual incentives. D. special recognition.

special recognition

A team leader with a free rider problem could maximize performance by: ␣ ␣ A. instructing them to do their best. B. specifying performance levels and due dates. C. assigning another team member to monitor their performance. D. punishing free riders who fail to meet standards.

specifying perfomance levels and due dates

If you had repair work done on your car, the compensation system the shop uses to pay the mechanics is most likely the ________ plan. ␣ ␣ A. Bedeaux B. standard hour C. Halsey 50-50 D. straight piece-wor

standard hour

In which of the following incentive pay plans does the wage rate not increase for production above the standard? ␣ ␣ A. Standard hour plan B. Rowan plan C. Taylor plan D. Merrick plan

standard hour plan

_____ has the disadvantage that employees may be required to spend money to obtain the incentive. ␣ ␣ A. Cash profit sharing B. A balanced scorecard C. Stock options D. Deferred profit sharing

stock options

Paying a dime for every bottle collected and turned into a collection center is an example of: ␣ ␣ A. a commission based work. B. a standard hour based work. C. straight piecework. D. a Rowan plan.

straight piecework

The most frequently used incentive system is the: ␣ ␣ A. standard hour plan. B. straight piecework. C. Halsey 50-50 plan. D. Taylor differential piece-rate plan.

straight piecework

Labor costs are to value added as pay roll costs are to: ␣ ␣ A. total standard value hours. B. production costs minus scrap. C. SVOP. D. customer satisfaction.

svop

Standard hour plan is to Rowan plan as straight piecework is to ______________ plan. ␣ ␣ A. Halsey 50-50 B. Gantt C. Bedeaux D. Taylor or Merrick plan

taylor or merrick plan

Which of the following is not true of lump-sum bonuses? ␣ ␣ A. They help maintain competitive pay position relative to competitors. B. They are less expensive than merit pay. C. Employees dislike them. D. They are a more visible reward than merit pay.

they help maintain competitive pay postion relative to competitors

The authors argue that for merit pay to live up to its potential, all of the following should be done except _________ ␣ ␣ A. use more peer than supervisor raters. B. improve the accuracy of appraisals. C. allocate enough merit money to truly reward performance. D. ensure merit pay differentiates across performance levels.

use more peer than supervisor raters

It is observed that _____ is/are commanding a larger share of the total compensation for all employee groups. ␣ ␣ A. merit pay B. health benefits C. retirement benefits D. variable pay

variable pay

Variable pay as a percent of payroll is _____________ percent. ␣ ␣ A. 5 B. 12 C. 17 D. 21

12

Which of the following is not true about individual spot awards? ␣ A. Smaller companies may be more casual about recognition. B. Someone in the organization alerts top management to the exceptional performance. C. A majority of companies do not feel that these awards are effective. D. Smaller companies are more subjective about deciding the size of the award.

a majority of companies do not feel that these awards are effective

A team works on a project with specific performance level goals and time deadlines, but weather problems cause the team to miss the deadline. What is the key factor affecting how the team feels about their incentive? ␣ ␣ A. The incentive was as promised B. The incentive was less than promised C. The team's perception of reward fairness D. The timing of the incentive

the teams perception of reward fairness