BUSI 440 Chapter 10
Which of the following does NOT provide for incentives based on standards that are expressed in terms of time period per unit of production?
Merrick system
In gain-sharing plan formulas, _____ are in the numerator and _____ are in the denominator.
labor inputs; productivity outcomes
Surveys show the most popular type of variable pay plans are _____.
special recognition plans
A team leader with a free-rider problem in his team can most likely maximize the performance of his team by:
specifying performance levels and due dates.
If you had repair work done on your car, the shop most likely used the _____ plan to pay the mechanic.
standard hour
The most frequently used incentive system is the:
straight piecework system.
All of the following support the use of individual incentives EXCEPT:
the presence of a union.
Maxwell Construction Corp. employs a lot of uneducated laborers. The company wants to introduce a variable-pay plan that is easy to understand and does not cost much to administer. Which of the following variable-pay plans is Maxwell most likely to introduce?
Cash profit sharing plan
Menthorp Inc. wants to design a variable-pay plan that fosters teamwork and business knowledge of its employees. In order to ensure maximum motivation, Menthorp wants its variable-pay plan to show a clear performance-reward link. Which of the following plans is most suitable for Menthorp?
Cash profit sharing plan
An advantage of group incentives is that it leads to increased line-of-sight.
False
Gain-sharing plans do not to use a historical standard to set productivity standards since environmental conditions can change quickly.
False
Which of the following is an advantage of providing stock ownership options as variable pay to employees?
It defers a portion of taxes to employees.
Which of the following is a disadvantage of gain-sharing plans?
Payouts can occur even if a company's financial performance is poor.
Which of the following is NOT true of merit bonuses?
They are more expensive than merit pay in the long run.
A fast and efficient worker would earn more money under a Rowan plan than under a Halsey 50-50.
True
All incentive plans share an established standard against which worker performance is compared to determine the magnitude of the incentive pay.
True
High performance ratings are nearly always statistically related to high merit increases.
True
Many variable-pay plans have some form of profit trigger linked to revenue growth or profit margins.
True
Merit pay is a pay-for-performance plan used for more than three-quarters of all exempt, clerical, and administrative employees.
True
The trend in recent variable-pay design is to combine the best of _____ and _____ plans.
gain-sharing; profit-sharing
