OB Ch. 8

Which of the following statements is true regarding gainsharing? A) Gainsharing focuses on productivity gains rather than profits. B) Gainsharing involves paying employees based on the number of new skills acquired by them in a specific time period. C) Gainsharing does not distribute profits, only gains in profits. D) Employees working under gainsharing plans have a greater feeling of psychological ownership. E) Gain sharing encourages social loafing.

A) Gainsharing focuses on productivity gains rather than profits

Which of the following statements is true regarding an employee stock ownership plan (ESOP)? A) Under this plan, employees acquire company shares often at below-market prices. B) There exists a strong correlation between ESOPs and employee performance. C) The financial stake in the company is adequate to use ESOPs as an effective means to motivate employees. D) ESOPs are effective because, like bonuses, they reward recent performance. E) ESOPs are also called competency-based pay plans.

A) Under this plan, employees acquire company shares often at below-market prices

Which of the following represents a pay plan that rewards employees for recent performance rather than historical performance? A) bonus B) flexible benefits C) modular plans D) cafeteria plans E) base salary

A) bonus

Which of the following is the distinct characteristic of participative management programs? A) joint decision making B) representative participation C) performance norms D) establishment of work councils E) autocratic decision making

A) joint decision making

________ are predesigned packages or modules of benefits, each of which meets the needs of a specific group of employees. A) Modular plans B) Employee stock ownership plans C) Profit sharing plans D) Merit-based plans E) Flextime plans

A) modular plans

Jack Holmes is a middle-aged, lower-level employee at an automobile service center. Though he is not paid very well, he loves his job. His supervisor speaks to him with respect and he is the favored candidate for mentoring new employees because on the vast experience he holds in the job. Based on this information, which of the following is most likely to be the reason Jack likes his job? A) recognition B) prospects of growth C) salary D) flextime E) job sharing

A) recognition

Which of the following is Theory X consistent with? A) the autocratic style of managing people B) the principles of participative management C) the vertical enhancement of jobs to enhance autonomy D) the use of recognition and achievements to motivate employees E) the reduced need of supervision and direction from managers

A) the autocratic style of managing people

Which of the following is an example of a piece-rate plan? A) $20 for each hour of work B) $2 for each unit produced C) stock options at cheaper prices D) straight commission plan E) spot bonuses

B) $2 for each unit produced

________ is a formula-based group incentive plan that uses improvements in group productivity from one period to another to determine the total amount of money allocated. A) Employee stock ownership plan B) Gainsharing C) Profit-sharing D) Piece-rate pay plan E) Merit-based pay plan

B) Gainsharing

Woodworth & Baines is a retail chain that has taken up numerous measures to improve employee attitude, motivation, and organizational performance. New training programs, employee engagement initiatives, and an employee welfare council were the three main strategies implemented as part of the employee empowerment program. Norman Kilner was one of twenty employees nominated to the employee welfare council where they were required to interact with the management to promote the interests of the employees. Additionally, the job roles of these twenty employees were vertically enhanced to give them more autonomy in the organization. However, six months into the employee empowerment program, a survey by HR revealed no actual change in employee attitudes. Similarly, a survey conducted by the production manager revealed that work productivity had not increased by any substantial measure either. Which of the following, if true, would best explain this outcome? A) Management strengthened the regulations relating to employee absenteeism in this period. B) Management retained the degree of control they had in the organizational affairs. C) The company moved from a merit-based to a piece-rate pay system in the last quarters. D) The employees performed poorly because of the lack of training and development programs. E) Management implemented a 360-degree feedback system for performance appraisals.

B) Management retained the degree of control they had in the organizational affairs

For employee stock ownership plans to be effective in improving performance, they must ________. A) be based solely on productivity like gainsharing plans B) be implemented such that employees psychologically experience ownership C) be determined on the basis of performance appraisals and recent performance D) be planned such that they are unaffected by company profitability E) be based on the market compensation philosophy

B) be implemented such that employees psychologically experience ownership

Which of the following statements is true regarding employee recognition? A) Employee recognition is an extrinsic reward. B) Critics argue that employee recognition programs are highly susceptible to political manipulation by management. C) Employee recognition programs are expensive. D) Centralized programs across multiple offices in different countries can hinder the process of employee recognition programs. E) Employee stock option is a more powerful workplace motivator than recognition.

B) critics argue that employee recognition programs are highly susceptible to political manipulation by management

An advantage of the ________ plan is that benefits accrue to groups of workers, high-performing workers pressure weaker performers to work harder, improving performance for the group as a whole. A) modular B) gainsharing C) skill-based pay D) flexible benefits E) profit-sharing

B) gainsharing

At Dortix, a manufacturing company, at the end of every quarter, the total production of each department is calculated, compared with the predetermined targets, and the rewards for each set of divisional employees is determined this way. Dortix uses a ________ plan to incentivize its employees. A) profit-sharing B) gainsharing C) core-plus D) modular E) bonus

B) gainsharing

To be effective, an employee involvement program must ________. A) rightsize the company by eliminating obsolete positions B) incorporate the unique demands of different cultures C) mandatorily establish work councils in the company D) eliminate the influence of employees in managerial decision making E) implement autocratic ways of handling its employees

B) incorporate the unique demands of different cultures

A ________ pay plan pays for individual performance based on performance appraisal ratings. A) piece-rate B) merit-based C) employee stock ownership D) profit sharing E) gainsharing

B) merit-based

________ bases a portion of an employee's pay on some individual and/or organizational measure of performance. A) Guaranteed pay program B) Variable-pay program C) Flexible benefits program D) Modular plans program E) Base pay program

B) variable-pay program

The two most common forms of representative participation are ________ and board representatives. A) quality circles B) work councils C) employee unions D) task teams E) cross-functional teams

B) work councils

Exsell is a popular consumer goods company known for hiring the best resources and using the best technology to produce an extensive range of goods. The manufacturing units consider productivity to be the only criterion; targets are upgraded, supervised, and rewarded amply. The groups with the highest productivity in each manufacturing unit owned by Exsell are incentivized using a substantial monthly monetary reward program. Of late, there have been some rumors about the company not doing very well in the market. Many claims of defective quality, declining market share, and employee unrest have been doing the rounds. However, the CEO of Exsell recently held a conference with the organization and the media to share its expansion plans for the coming year. He ended the conference with a discussion of how the profit margin of the company had grown substantially but many employees were left in doubt. Which of the following, if true, would indicate the need for Exsell to replace gainsharing with profit-sharing as a variable pay program for its employees? A) The company used a merit-based pay plan for decades to reward the employees who deserved recognition for good performance. B) The company has opened multiple product categories and is experiencing brand dilution. C) Executives who receive and evaluate client feedback have found a lot of quality concerns with the products dispatched in recent times. D) The economy is showing signs of robust growth after last year's recession and losses. E) The consumer goods industry has traditionally had higher barriers to entry than other industries of similar size and reach.

C) Executives who receive and evaluate client feedback have found a lot of quality concerns with the products dispatched in recent times

Which of the following statements is true regarding a merit-based pay plan? A) It bases pay levels on how many skills employees have or how many jobs they can do. B) It is also called competency-based pay plan. C) Unions typically resist merit-based pay plan. D) It distributes compensation based on an established formula designed around a company's profitability. E) A typical merit-based pay plan provides no base salary and pays the employee only for what he or she produces.

C) Unions typically resist merit-based pay plan

Sally Peterson, who works as an entry-level editor, wants to go for dental reconstruction surgery and sent a query to her HR department asking for a list of preferred hospitals. The HR looked through her healthcare plan which provided only a minimum coverage for routine drugs and vision care. Consequently, the HR manager has recently informed her that if she wishes to carry on with the dental procedure, she will have to pay for it on her own. Which of the following healthcare plans should she avail to meet her needs? A) a basic modular plan B) a standardized benefits package C) a core-plus plan D) a fringe benefits plan E) a 401k plan

C) a core-plus plan

The main drawback of representative participation as an employee involvement measure is that ________. A) it is a time-consuming process B) it is able to exert its impact only in the short run C) it is primarily symbolic in its impact D) it is consistent with the Theory Y view of motivation E) it is likely to require a major change in organizational roles

C) it is primarily symbolic in its impact

The ________ pay plan has long been popular as a means of compensating production workers by paying a fixed sum for each unit of production completed. A) competency-based B) gainsharing C) piece-rate D) profit sharing E) merit-based

C) piece-rate

The two major forms of employee involvement are participative management and ________. A) organizational restructuring B) job sharing C) representative participation D) job rotation E) job enlargement

C) representative participation

which of the following variable-pay programs is the pay level based on how many skills employees have or how many jobs they can do? A) bonuses B) piece-rate pay C) skill-based pay D) gainsharing E) merit-based pay

C) skill-based pay

Participative management is a method of management where ________. A) representatives of workers form work councils and these councils must be consulted when management makes decisions about employees B) few representatives of workers sit on a company's board of directors C) subordinates share a significant degree of decision-making power with their immediate superiors D) low-level workers meet occasionally with the CEO to discuss problems within their department E) low-level workers are responsible for making corporate policy decisions

C) subordinates shares a significant degree of decision-making power with their immediate superiors

Internal equity refers to the ________. A) list of the knowledge, skills, and abilities required in a particular job B) arrangement of the elements of different jobs in the organization C) worth of the job to the organization D) organization's pay relative to pay elsewhere in its industry E) framework of tasks, duties, and responsibilities that the job involves

C) worth of the job to the organization

Which of the following is an example of an intrinsic reward? A) bonus B) profit-sharing plan C) employee stock option D) employee recognition E) gainsharing

D) employee recognition

At Esco Retail, all employees are constantly driven to work hard. The company places maximum emphasis on stocking high quality goods and providing high quality service to retain the edge they have in the retail industry. To promote organizational commitment further, employees are incentivized by enabling them to purchase company shares at below-market prices as a part of their benefits. This mode of providing incentives represents the use of ________. A) flexible benefits plans B) merit-based plans C) modular plans D) employee stock ownership plans E) core-plus plans

D) employee stock ownership plans

The external competitiveness of an organization's pay relative to elsewhere in the industry is measured by its ________. A) external benefit B) external rotation C) external costs D) external equity E) external liability

D) external equity

Which of the following statements is true regarding flexible benefits? A) Flexible benefits are awarded through uniform packages to cover the requirements of a married couple with two children. B) Flexible benefits are in accordance with the belief that employees have identical needs that must be rewarded identically. C) Gainsharing and profit-sharing plans are two major types of flexible benefits. D) Flexible benefits can be altered to meet employee needs based on age, marital status, and number and age of dependents. E) Flexible benefits are given based on an employee's skills, competence, and productivity.

D) flexible benefits can be altered to meet employee needs based on age, marital status, and number and age of dependents

Daichi Inc. is a Japanese software development firm known for its high quality products. Recently, the company held its annual conference and awarded all those employees who were in the top five percent with substantial monetary rewards. Their performance was evaluated on the basis of target achievement, client feedback, and quality ratings. Employees whose performance had not changed drastically were given a minor raise and those who faired badly received no incentives. Many employees blamed the company of creating differences among employees because they felt that it would harm the company in the long run, but Daichi Inc. truly believes that to retain and motivate its best performers, a large incentive is a good step. Daichi Inc. is using a(n) ________ here. A) piece-rate plan B) employee stock ownership plan C) modular plan D) merit-based plan E) flexible benefits plan

D) merit-based plan

Flexible spending plans consist of ________. A) a set of core of essential benefits and a menu-like selection of others from which employees can select B) no base salary and pays the employee only for what he or she produces on the basis of a fixed sum for each unit of production completed C) a fraction of a company's profit margins determined on the basis of an established formula D) pretax dollars up to the dollar amount offered in the plan that an employee sets apart to pay for particular benefits E) modules of benefits, each of which meets the needs of a specific group of employees

D) pretax dollars up to the dollar amount offered in the plan that an employee sets apart to pay for particular benefits

A ________ plan distributes compensation based on some established formula designed around revenue of the company. A) piece-rate B) merit-based C) skill-based D) profit-sharing E) competency-based

D) profit-sharing

What is an advantage of bonuses over merit-based pay plan? A) Employees don't view bonuses as a part of their salary. B) Bonuses improve flexibility of the workforce. C) Bonuses are paid based on a formula. D) Bonuses improve performance of the group as a whole. E) Employees are rewarded for recent performance.

E) Employees are rewarded for recent performance

Representative participation is characterized by ________. A) joint decision making by employees and management B) democratic leadership behaviors C) open and honest two-way communication D) a significant positive impact on employee morale and performance E) compliance with the legal need to redistribute power within organizations

E) compliance with the legal need to redistribute power within organizations

Core-plus plans consist of ________. A) predesigned packages of benefits that an employee must accept as a whole B) monetary benefits which are linked to one's performance appraisals C) fractions of a company's profit margins determined on the basis of an established formula D) pretax dollars up to the dollar amount offered in the plan that an employee sets apart to pay for particular benefits E) essential benefits and a menu-like selection of other benefits that an employee can choose from

E) essential benefits and menu-like selection of other benefits that an employee can choose from

Individualized rewards by allowing each employee to choose the compensation package that best satisfies his or her current needs and situation are called ________. A) variable pay programs B) standardized benefits packages C) employee recognition programs D) employee involvement programs E) flexible benefits plans

E) flexible benefits plans

Which of the following variable pay programs is free from dependence on company profits? A) profit-sharing B) job sharing C) bonuses D) employee stock ownership plans E) gainsharing

E) gainsharing