Chapter 12

These rewards are valued returns to the individual in exchange for doing something that the organization desires of the employee.

Extrinsic

A company that is wanting to save money implements a suggestion from a workgroup that proposes switching to cost-saving lightbulbs; the company saves $15,000 the first year and distributes some of these savings back to those employees with the lightbulb proposal.

Gainsharing

A standard _____ plan calls for paying an employee for the amount of time expected to complete a job, even if she completes it quicker.

Hour

Companies use this type of pay to increase the likelihood that employees will accomplish objectives related to company strategy.

Incentive

______ pay must target the strategic goals of the organization to be beneficial.

Incentive

______ allow managers to vary the reward given employees based on the individual (or group) effort put into the work process.

Incentives

These incentives reinforce performance of a single person with a reward that is significant to that person.

Individual

______ incentives reinforce performance of a single person with a reward that is significant to that person.

Individual

In compensation, a ______ is a lump sum payment, typically given to an individual at the end of a time period.

bonus

Jacob sat down with his supervisor at the beginning of the quarter and set a goal to reduce defects on the assembly line from 5% to 2%. If he achieves this goal by the end of the quarter, he will receive a ______ of $4,000.

bonus

For every $1,000 of widgets Tanner sells, he receives a ______ of 10%, or $100.

commission

In order for a(n) ______ incentive program to work, it must provide a significant incentive to the salesperson to be successful in selling and provide a disincentive to make a harmful "quick sale."

commission

A form of compensation, a(n) ______ makes employee part owners of the organization.

employee stock ownership plan

Terry is applying the Giving Praise Model to Yael. She has told Yael exactly which behavior is being praised, why that behavior was important, and she has given Yael the opportunity to absorb the information. Her next step is to ______.

encourage repeat performance

The current group of younger employees entering the workforce has been called the ______ generation because of the expectation that they are owed certain perquisites just for becoming an employee.

entitlement

Incentives fail to be effective if they become so regular and so expected by the recipients that they become ______.

entitlements

If rewards are distributed based on personal performance levels, a perception of ______ can be created if managers don't make clear why some are provided with greater incentives than others.

favoritism

When the manufacturing department cut waste by 10%, the organization paid each member of the department $500 (a portion of the savings) as a part of the organization's ______ program.

gainsharing

One advantage of a(n) ______ is that it broadens individual outlook.

group incentive

Employees may focus only on the items that are being measured for ______ payments, ignoring other important tasks.

incentive

With ______, an organization is rewarding employees for past performance, but are doing it in the hope that employees will want similar rewards in the future and therefore will repeat the desired behaviors.

incentives

It may be very difficult or even impossible in some jobs to identify ______ output on which managers can base an incentive.

individual

A program to reward top performers with increases in their annual wage that carry over from year to year is called ______ pay.

merit

For ______ pay to be valuable as an incentive, it typically must be more than 1% of the employee's pay.

merit

Acme Global announced that it had a $1 million pool available for pay increases this year. Top performers will receive larger raises than others. Lindsey was a top performer and hopes to get a 10% ______.

merit increase

The use of pay for ______ rather than hours worked is the trend today.

performance

Under her organization's ______ plan, Nicole is paid for each widget she produces.

piecework

Gainsharing is similar to ______ because in each case, the gain is shared with the employees who helped to create the gain.

profit sharing

Omri worked 40 hr this week but was paid for 45 hr because that's how long the work normally takes. Omri is paid under a ______ plan.

standard hour

The biggest challenge with ______ compensation plans is creating the manuals showing the allowable time for a job.

standard hour

In a ______ compensation plan, each task is assigned a normal amount of work time for completion.

standard-hour

Acme Global gave its top executives the opportunity to buy Acme Global stock in 5 years at the same price at which the stock is selling today. Acme Global is using a(n) ______ plan.

stock option

Angelique is paid a flat rate of $2 per pair of pants that she sews at work. She is being paid under a ______ system.

straight piece-rate

Individual incentive plans require that managers keep track of individual efforts and are much more ______-intensive than group incentives.

time

Rajiv offered his team a bonus if the team completes the project 1 week ahead of time. Rajiv is using ______ as an incentive

variable pay

In Step 2 of the Giving Praise Model, the employee being praised is told ______.

why the praised behavior is important

With the introduction of an individual incentive program, Aleksander feels like he is competing with the other members of his team instead of working together with them. While the individual incentive plan could mean more money for some members of the team, most members of the team feel the same way Aleksander does. They wish they could go back to working together for a group incentive. Which disadvantage of individual incentives does this illustrate?

Individual incentives may not fit organizational culture.

A person with this type of motivation does something because they like it, it is interesting and personally satisfying, and they want to do it.

Intrinsic

A social ____ is a person that does not work as hard in a group setting because it's harder to pick out their individual performance.

Loafer

Naoyuki is a surgical technologist at a hospital. His job involves helping out during surgeries. Among other things, he hands supplies to surgeons and surgeons' assistants, holds retractors and other instruments, and performs various tasks requested by the surgeon. An individual bonus plan would not work for Naoyuki because of which disadvantage of individual incentives?

Many jobs have no direct output.

A type of pay increase that is based on past performance and is not usually known in advance, but is a function of the amount of money given by the company to the department to add to base pay of employees.

Merit

To help your incentive program work, do not reward these.

Non-performers

Nadia always completed her work ahead of schedule. She was known as a fast and accurate worker. When group incentives were initiated, the rest of her work team could not keep pace with Nadia. Many members of the team told Nadia to stop making them look bad. Eventually, Nadia matched her work pace to the rest of the team. This illustrates which disadvantage of group incentives?

Outstanding performers may slacken efforts.

______ are extra financial benefits usually provided to top employees in many businesses.

Perquisites

Bob is paid for each chair he assembles, so he maximizes his pace of assembling chairs.

Piecework

Telling an employee exactly what was done correctly is the first step in the giving _____ model.

Praise

______ is probably the most powerful, simplest, least costly, and yet most underused motivational incentive there is.

Praise

John works for a company that uses ______ sharing, where the company provides a portion of its proceeds over a specific period of time through a bonus payment.

Profit

This type of compensation depends on some measure of individual or group performance or results in order to be awarded.

Variable

______ is compensation that depends on some measure of performance or results in order to be awarded.

Variable pay

Social loafers ______.

avoid exerting maximum effort in group settings because it is difficult to pick out individual performance

______ theory suggests that manager will act in the way that provides the most benefit to them and not the owners of the organization, unless they are provided with incentives to act in ways that help the owners of the organization.

Agency

This is typically a lump sum payment given to an individual at the end of a time period and is usually based on a specific, measurable goal that the employee reached.

Bonus

A payment typically provided for selling an item to a customer (e.g., $10 commission for every $100 widget sold).

Commission

Organizations might provide group incentive plans when people need to do this in order to produce outcomes.

Cooperate

Our incentive option plan allows me to get stock and put it in my retirement account (in a trust) without paying anything for it.

ESOP

Something that employees feel is owed to them because it has been provided in the past.

Entitlement

As we discussed in class, a disadvantage of offering an organizational-level incentive plan is that there is a less clear line of _______ between behavior and outcomes.

Sight

Andrew showed up to every team meeting late and did not complete his part of the project. The rest of the team had to pick up the slack to complete the project on time. Despite his lack of contribution, Andrew received the same group incentive as everyone else on the team. This illustrates which disadvantage of group incentives?

Social loafing may occur.

With the introduction of an individual incentive program, Caitlin has begun spending an hour each day documenting her employees' outcomes. Which disadvantage of individual incentives does this illustrate?

The record-keeping burden needed for individual incentives is high.

Much fanfare was made about Quon's latest bonus in the office. He has always been a high performer. However, this year he received an extra-large bonus. His coworker Hannah got a little tired of hearing about Quon's bonus and decided that next year she would win some of the bonus money. Which advantage of individual incentives does this illustrate?

They may motivate less productive employees to work harder.

Sara has been slacking at work. At the beginning of the quarter, Sara sits down with her manager and sets three goals. If Sara achieves those three goals in the next three months, she will receive a $1,000 bonus. Which advantage of individual incentives does this illustrate?

They may motivate less productive employees to work harder.

When she is not working, Sugi trains to run marathons. She wishes she had more time to travel to various races but work keeps her busy. Kevin does not want time off work. He needs to earn as much overtime as possible to pay off his college loans. The company recently offered either a week's pay or a week off as the bonus to the salesperson who made the most sales. Both Sugi and Marcus worked hard to win. Which advantage of individual incentives does this illustrate?

They offer the ability to match rewards to employee desires.

At the beginning of the quarter, Mohammed sat down with his manager and set three goals for the next 3 months. The achievement of each goal will depend on Mohammed. No one else in his work group can affect the work toward the goal. Which advantage of individual incentives does this illustrate?

They promote the link between performance and results.