Compensation Final CH 9

There is evidence that every 10 percent increase in the bonus paid to employees by a firm yields a _____ percent increase in ROA to the firm.

1.5%

Most experts agree that employees do not begin to consider changing their behaviors unless payouts are at least _____ percent higher.

20%

_____ theory states that success-sharing plans will be motivating, whereas at-risk plans will be demotivating.

Herzberg's Two-Factor Theory

When employee performance measures are ambiguous and vary from time to time, but the organization's performance is fairly stable over time, the most effective type of compensation is to offer _____.

A variety of rewards with significant incentive pay

Compensation should reinforce all but which of the following behaviors?

Keeping turnover to nearly zero

A(n) ___________________ requires annually "re-earning" the added pay.

Lump-sum bonus

When identifying, what is important to employees, which theory would be most useful?

Maslow's Need Theory

In ___________________ theory, incentive pay is motivating if it helps an employee gain a sense of achievement, recognition or approval.

Maslow's Theory

When developing a flexible compensation system, which theory or theories would be most useful?

Maslow's Theory and Herzberg's Theory

_____ is an individual level form of performance pay.

Merit Bonus

When employee performance is easily measured and the organization's performance is fairly stable over time, the most effective type of compensation is to offer _____.

Monetary rewards with large incentives

Which of the following is NOT true?

NOT True: Companies are moving back to entitlements-oriented pay to reduce turnover.

The key to designing a pay-for-performance system rests on standards. Specifically, managers need to be concerned about the:

Objectives, measures, eligibility, and funding.

Which of the following focuses on increasing the frequency of desired behaviors and decreasing the frequency of undesired behaviors through environmental consequences?

Reinforcement Theory

The ability triangle includes _____.

Selection, Recruitment, Training

Company X pays for performance. Allan, an employee of the company, is not in favor of this reward system and, therefore, leaves Company X in search of another company with different rules for getting rewards. This is an example of the:

sorting Effect

A person with low self-esteem is likely to seek _____.

A large, decentralized organization with little performance-based pay *Basically, person wants to be able to hide

Which of the following best supports a culture of flexibility and innovation?

A strong commitment to job security

According to expectancy theory, the instrumentality is:

the perceived probability that a specified level of behavior will receive a specific level of reward

_____ is employees' beliefs that requisite job performance will be rewarded by the organization.

Instrumentality

The most obvious sorting factor is _____.

Ability

_____ theory argues that performance-based pay is the optimal compensation choice for complex jobs, where monitoring employee performance is difficult.

Agency

A key factor in increasing trust in top management is ________________.

An acceptable appraisal system

Which of the following is an example of the sorting effect in action?

An employee leaving a high-paying job for one that provides more work-life balance. *Idea behind the sorting effect is the effect that pay can have on the composition of the workforce.

Which among the following components of a reward system is a dimension of empowerment?

Control

The motivation triangle includes _____.

Culture, Compensation, Performance Management

According to expectancy theory, the valence of an outcome is the:

Degree to which an outcome is desired

According to _____ theory, relative pay is important as employees evaluate their pay-effort balance in comparison to other employees.

Equity Theory

When salary increases are based on inputs, or performance, companies are following:

Equity Theory

According to research, which of the following is NOT one of the most important factors for employees influencing their pay systems?

Example of not one of the most important factors: Team-based

Which of the following theories states that people choose the behavior that leads to the greatest reward?

Expectancy Theory

_____ is the value employees attach to the organization rewards offered for satisfactory job performance.

Valence

When an organization's performance has regular and large swings and individual performance is unclear and hard to measure, the most effective compensation mix is to offer _____.

a base pay with low incentives and a variety of rewards

When an organization's performance has frequent highs and lows, but individual performance is fairly stable, and performance measures are clear, the most effective compensation mix is to offer _____.

a large base pay and low-incentive pay

The corporate performance of Yellow Corp. is fairly stable. However, it is difficult to measure individual performance. In this case, the most effective compensation mix is to offer _____.

a wide range of rewards beyond just money

All of the following EXCEPT _____ require periodically re-earning the added pay.

cost-of-living increases

The amount of fairness given to employees refers to _____.

distributive justice

When a company moves from an individual incentive plan to a group incentive plan, the company is most likely to experience _____.

higher turnover among high performers

Available evidence indicates managers believe the most important factor for pay increases is _____.

performance

When pay is based on individual performance, turnover tends to be highest among _____.

poor performers