MGMT 365 Chapter 12 Connect Test Questions

¡Supera tus tareas y exámenes ahora con Quizwiz!

By law, what percentage of assets must an employee stock ownership plan (ESOP) invest in its company's stock?

51 percent

_____ focuses on the link between rewards and behaviors and emphasizes anticipated rewards.

expectancy theory

Agency costs are likely to arise when _____.

principals and agents have different goals

In the _____ dimension, employees base their fairness assessments on the processes that were used to decide the amount of compensation.

procedural

The _____ requires companies to report compensation levels for the five highest paid executives and the company's performance relative to that of competitors over a five-year period.

Securities and Exchange Commission

Which of the following is most likely to provide intrinsic motivation?

an interesting work assignment

_____ can be described as a function of ability and motivation.

behaviors

Gainsharing programs offer a means of sharing productivity gains with employees based on organization-level performance.

false

In incentive pay programs, annual pay increases are usually linked to performance appraisal ratings.

false

Individual incentives are rolled into the base pay of employees.

false

Merit pay systems rely on 360-degree performance feedback.

false

The flow of feedback tends to be multi-directional in merit pay programs.

false

The performance motivation of stock option plans is particularly high from a reinforcement theory standpoint.

false

Valence of pay outcomes should change according to different pay systems.

false

With respect to employee participation in decision-making, the more agents there are, the lower the monitoring cost.

false

Which of the following is a design feature according to which employee contribution programs differ?

frequency of payout

A(n) _____ program is based on group or plant performance that does not become part of the employee's base salary.

gainsharing

The Scanlon plan is an example of a(n) _____ plan.

gainsharing

Which of the following is a compensation program that would best support an organizational culture of cooperation and problem solving?

gainsharing

Which of the following compensation programs uses a management style that gives importance to control?

incentive pay

Which of the following pay programs has the highest frequency of payout?

incentive pay

In a(n) _____ plan, performance is usually measured as physical output and the payment is not rolled into the base pay.

individual incentive

In incentive pay, performance measures are primarily based on _____.

individual productivity

According to a merit increase grid, one of the factors that determine the size and frequency of pay increases is the _____.

individual's performance rating

Culture based on _____ is most likely to prevail in companies that use a profit-sharing compensation program.

knowledge of business

In _____ programs, annual compensation increases are usually linked to performance appraisal ratings.

merit pay

Which of the following is an example of a behavior-oriented contract?

merit pay

A(n) _____ is suitable for an organization with a culture that promotes individual competition.

merit pay plan

Expectancy theory implies that linking an increased amount of rewards to performance will increase motivation and performance. Followers of cognitive evaluation theory are likely to question this assumption, arguing that

monetary rewards may decrease intrinsic motivation

Agents prefer a behavior-based contract when _____.

outcome uncertainty is high

Group incentives tend to measure performance in terms of _____.

physical output

The Dodd-Frank Wall Street Reform and Consumer Protection Act requires shareholders to have a "say on pay," meaning that they have the right to a (nonbinding) vote on executive pay plans.

true

The Securities and Exchange Commission (SEC) requires companies to report compensation levels for the five highest paid executives.

true

When an organization has a growth strategy, the short-run pay level and benefit level tend to be below market level.

true

Gainsharing can motivate employees as much as individual plans do because

it allows more control over the performance measure and the frequency of payouts

Which of the following is a drawback of using profit sharing?

it runs the risk of contributing to employee dissatisfaction

Which of the following makes employee stock ownership plans (ESOPs) less attractive?

less diversification of investment risk

When an organization is using concentration strategy, it will _____.

make centralized pay decisions

Which of the following is true of how managers may differ from shareholders?

managers diversify investments more easily

______ are decisions about whether to join or remain with an organization.

membership behaviors

Overtime pays better performers more in _____ programs.

merit pay

Which of the following is a compensation program that relates costs to the ability to pay?

profit sharing

From a(n) _____ standpoint, the effect on performance motivation may be limited in ownership programs because of the less obvious link between pay and performance.

reinforcement theory

Which of the following theories suggests that high employee performance not followed by a monetary reward will make future high performance less likely?

reinforcement theory

Which of the following makes outcome-oriented contracts less likely to occur?

risk aversion among agents

Agency theory is of particular value in compensation management because of its emphasis on the _____ trade-off.

risk-reward

Employee stock ownership plans (ESOPs) give employees the right to vote their securities if registered on a national exchange.

true

Gainsharing plans encompass more than just a monetary component.

true

In a merit increase grid, the _____ determines the size and frequency of pay increases.

compa-ratio of employees

Which of the following is likely to occur when pay for performance with stronger incentive intensity is replaced with one having a weaker incentive pay?

competitors possibly winning over high performers with stronger incentive intensity

Separating the functions of principals and agents is likely to result in

diversification of investment risk

In merit pay programs, an individual's compa-ratio represents his or her _____.

position in the pay range

Which of the following is true of how the agency theory views monitoring?

Employees understand fellow employees better than managers do

According to the agency theory, the principals are the _____.

owners

Which of the following pay strategy dimensions best fits with a business strategy of concentration?

above-market benefits levels

Which of the following is true of how agents may differ from principals?

agents are more averse to risk

Which of the following must a principal do to reduce agency costs?

align the agent's interests with the principal's interests

Which of the following statements about outcome-oriented or behavior-oriented contracts is true?

behavior-oriented contracts do not transfer risk to the agent

Which of the following is a criticism of traditional merit pay programs?

employees are encouraged to focus on personal gains rather than what is good for the organization

Merit pay has the ability to define and reward a broad range of performance dimensions.

true

As jobs become less programmable,

behavior-oriented contracts become less likely

Employees assess fairness along the distributive dimension when their assessment is based on _____.

how much they receive

Which type of compensation program is most likely to attract learning-oriented employees?

skill-based pay

Which of the following is a difference between profit-sharing plans and employee ownership plans?

the link between pay performance is less obvious under ownership than under profit sharing

Which of the following is true about outcome-oriented contracts?

they are typically a major component of executive compensation

Which of the following is true of individual incentives?

they must be continuously earned and re-earned

According to E. L. Thorndike's Law of Effect, high performance followed by a reward will motivate employees to repeat the performance and make it recur more often in the future.

true

Employee stock ownership plans (ESOPs) carry significant investment risks for employees.

true

In merit pay systems, performance is measured based on a supervisor's rating.

true

E. L. Thorndike's Law of Effect states that _____.

a response followed by a reward is more likely to recur in the future

Pay plans are typically used to energize, direct, or control employee behavior.

true

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

Bevlink's full match for employee retirement plan contributions encourages Tina to apply for a job there.

Which of the following is a tool that allows companies to track financial results while monitoring progress in building the capabilities and acquiring the intangible assets they would need for future growth?

balanced scorecard

In skill-based pay systems, performance measures are primarily based on _____.

employees' competency acquisition

_____ perception is the perceived link between effort and performance.

expectancy

A pay plan's ability to draw highly qualified applicants for jobs at a particular organization is known as the incentive effect.

false

An employee's assessment of the fairness of his or her compensation based on how much pay the employee receives is referred to as procedural fairness.

false

Deferred profit-sharing plans increase employee motivation.

false

Gainsharing plans differ from profit-sharing plans in that

gainsharing plans distribute payouts more frequently

When an organization is using growth strategy, it will _____.

have pay levels that are below market levels in the short run

Allan works as a typesetter in a publishing company. If the organization uses merit pay programs, Allan's salary is based primarily on information collected from _____.

his immediate supervisor

According to expectancy theory, compensation systems differ according to their impact on the components of motivation; the main influence of compensation is on _____.

instrumentality

According to expectancy theory, motivation is hypothesized to be a function of _____.

instrumentality

Which of the following components is a perceived link between behavior and pay?

instrumentality

A _____ plan gives employees the opportunity to buy the company's shares at a previously fixed price.

stock option

Which of the following is an example of an ownership plan used in compensation systems?

stock option

Relying exclusively on merit pay or individual incentives may result in high levels of work motivation but unacceptable levels of individualistic and competitive behavior.

true

An example of the sorting effect is a social media firm offering employee stock options to attract a higher caliber of applicants for positions in the organization.

true

One solution to profit sharing during a downturn is to design plans that have upside but not downside risk.

true

One way of achieving employee ownership is through stock options, which give employees the opportunity to buy stock at a fixed price.

true


Conjuntos de estudio relacionados

Spinal Column, Abdominals and Thorax Exam

View Set

CS372 Computer Networking Week 1-3 review for quiz 1

View Set

DEVELOPMENT & USAGE OF ENGLISH TEST

View Set

bsc 182 exam 2- achy breaky heart

View Set

History of the USA 1917-29: The Red Scare

View Set

Parenteral Medication Administration (Exam 3)

View Set

Services Marketing Exam 1 Jill Davis

View Set

ATI Fundamentals practice Test B

View Set