ch. 9-compensation

According to expectancy theory, effort level depends on which of these factors? (1) expectancy; (2) valence; (3) instrumentality; (4) reward; (5) goals A. 1,2,3 B. 2,3,4 C. 1,4,5 D. 2,5,4

1,2,3

There is evidence that every 10 percent increase in the bonus paid to employees yields a _____ percent increase in ROA to the firm. A. 1 B. 1.5 C. 5 D. 15

1.5

Research suggests that for employees to notice and work hard to perform behaviors desired by the organization, incentives need to be _____ percent. A. 5-8 B. 8-10 C. 15-20 D. 25-30

15-20

A person with low self-esteem is likely to seek ____. A. an organizations with pay plans based upon individual not group performance B. an organizations with a significant amount of pay based upon performance C. a small organization with large benefits D. a large, decentralized organization with little performance-based pay

a large, decentralized organization with little performance based pay

Which of the following best supports a culture of flexibility and innovation? ␣ A. A flexible benefits package B. A strong commitment to job security C. High base wage D. Stock options

a strong commitment to job security

When employee performance measures are ambiguous and vary from time to time and the organization's performance is fairly stable over time, the most effective type of compensation is to offer ____. A. large base and low-incentive pay B. variety of rewards and base pay C. a variety of rewards with significant incentive pay D. monetary rewards with large incentives

a variety of rewards with significant incentive pay

The most obvious sorting factor is ____. A. seniority B. ability C. experience D. educational qualification

ability

Desired employee behaviors are influenced by ________ A. motivation. B. ability. C. environment. D. ability, motivation and environment.

ability, motivation, and environment

_____ theory argues that performance-based pay is best for complex jobs where monitoring employee performance is difficult. A. Reinforcement B. Goal setting C. Agency D. Expectancy

agency

Theories dealing with exchange include ____. A. Maslow and Herzberg B. agency, equity and expectancy C. expectancy and reinforcement D. goal setting and equity

agency, equity, and expectancy

A key factor in increasing trust in top management is ____. A. an acceptable appraisal system B. high base pay C. stock options D. a well-designed piece rate system

an acceptable appraisal system

A business has a centralized structure and a compensation system that rewards sales volume. However, sales volumes are low compared to competitors who respond more quickly to changes in consumer demand. Which of the following is the most likely source of the low sales performance? A. A poorly designed compensation program. B. An ineffective recruitment and selection program. C. An inappropriate organization design. D. A poorly designed performance management program.

an inappropriate organization design

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 B. monetary rewards with large incentives C. large base and low-incentive pay D. a wide range of rewards and significant incentives

base pay with low incentives and a variety of rewards

The key ingredient in _____ is careful cost analysis to make sure the dollar cost of the package an employee selects meets employer budgetary limits. ␣ ␣ A. gain-sharing plans B. individual incentive plans C. success-sharing plans D. cafeteria-style compensation

cafeteria style compensation

Which of the following is not true? A. More companies are using pay based upon individual, group and organization performance. B. Workers with high security needs may accept lower pay for pay security. C. Workers may need higher pay to stay and perform in an at-risk pay company. D. Companies are moving back to entitlement-oriented pay to reduce turnover.

companies are moving back to entitlement oriented pay to reduce turnover

All of the following except ____ require periodically "re-earning" the added pay A. success sharing plan B. lump-sum bonus C. profit-sharing plan D. cost of living

cost of living

The motivation triangle includes ____. A. selection B. organization design C. culture D. organization development

culture

The amount of fairness given to employees refers to ____. A. total justice B. quantitative justice C. procedural justice D. distributive justicean a

distributive justice

According to _________ theory, ensuring fairness and consistency of performance-based pay across employees is important. ␣ ␣ A. equity B. instrumentality C. expectancy D. reinforcement

equity

As per the _____ theory, relative pay is important as employees evaluate their pay-effort balance in comparison to other employees. A. equity B. expectancy C. agency D. reinforcement

equity

Employees' assessment of their ability to perform required job is called ____________. A. equity B. instrumentality C. expectancy D. reinforcement

expectancy

For which motivation theory is it important for organizations to pay attention to the training and development needs of their employees? A. Equity B. Expectancy C. Goal setting D. Reinforcement

expectancy

_____ theory contends that we choose to do those things that we believe are most likely to lead to desired rewards. A. Expectancy B. Reinforcement C. Agency D. Equity

expectancy

________ theory argues line of sight is a critical part of performance-based pay systems. ␣ A. Agency B. Maslow's C. Reinforcement D. Expectancy

expectancy

The two theories emphasizing line of sight are _________. A. equity and reinforcement B. Maslow and Two-Factor C. expectancy and goal-setting D. agency and equity

expectancy and goal setting

Which of the following theories is least relevant to merit pay? A. Herzberg's theory B. Expectancy theory C. Equity theory D. Reinforcement theory

herzberg

_____ theory contends that success-sharing plans will be motivating but at-risk plans will be de- motivating. ␣ ␣ A. Equity B. Expectancy and agency C. Herzberg's two-factor D. Agency

herzbergs two factor

Growing evidence suggests that the major effect of skill-based pay is ____. A. high productivity B. reduced labor costs C. high quality products D. low training costs

high quality products

When moving from an individual to a group incentive plan, you would expect ____. A. high turnover among high performers B. an increase in instrumentality C. an increase in the output of high performers D. an increase in perceived equity

high turnover among high performers

_____ is the belief that when a specified level of job performance is attained, the employee will receive a specified reward. A. Valence B. Expectancy C. Instrumentality D. Utility

instrumentality

Compensation should reinforce all but which of the following behaviors? A. Attracting and hiring good employees B. Keeping turnover to nearly zero C. Encourage skill development D. Motivate high job performance

keeping turnover to nearly zero

_____ is an individual level form of performance pay. A. Risk sharing B. Gain sharing C. Lump-sum bonus D. Success sharing

lump sum bonuses

Which theories would support a higher minimum wage? A. Reinforcement and agency B. Goal setting and equity C. Maslow and Herzberg's two-factor D. Expectancy and agency

maslow and herzberg

In _____ theory, incentive pay is motivating if it helps an employee gain a sense of achievement, recognition or approval. ␣ ␣ A. Herzberg's two-factor B. equity C. Maslow's D. Reinforcement

maslows

When developing a flexible compensation system, which theory or theories would be most useful? A. Expectancy theory B. Equity theory and agency theory C. Maslow's theory and Herzberg's theory D. Goal setting

maslows theory and herzbergs

When an organization's performance has frequent highs and lows and individual performance is fairly stable and performance measures are clear, the most effective compensation mix is to offer ____. A. base pay with low incentives and a variety of rewards B. monetary rewards with large incentives C. large base and low-incentive pay D. a wide range of rewards and significant incentives

monetary rewards with large incentives

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 ____. ␣ ␣ A. large base and low-incentive pay B. variety of rewards and base pay C. a variety of rewards with significant incentive pay D. monetary rewards with large incentives

monetary rewards with large incentives

_____ involves identifying what is important to a person and offering it to them in exchange for some desired behavior. A. Conditioning B. Goal setting C. Empathy D. Motivation

motivation

The key to designing a pay-for-performance system rests on standards. Specifically, managers need to be concerned about the: A. objectives, structure, eligibility, and funding. B. strategy, measures, structure, and equity. C. structure, efficiency, equity, and funding. D. objectives, measures, eligibility, and funding.

objectives, measures, eligibilty, and funding

The primary guiding force that determines needed employee behaviors is ____. A. corporate goals B. organization strategy C. strategic business unit goals D. department/team goals

organization strategy

Available evidence indicates managers believe the most important factor for pay increases is ____. A. effort B. nature of the job C. seniority D. performance

perfomrnace

Turnover tends to be highest among ____. A. poor performers B. good performers C. single women with children D. ethnic minorities

poor performers

Compared to other incentive plans, line of sight is lowest in ____. A. profit sharing B. gain sharing C. risk sharing D. success sharing

profit sharing

If you worked in a cyclical industry such autos, which set of pay components would be least desirable? ␣␣ A. gain sharing and lump-sum bonus B. merit pay and base wage C. profit sharing and lump-sum bonus D. cost of living and base wage

profit sharing and lump sum bonus

The ability triangle includes ____. ␣ ␣ A. selection B. performance management C. compensation D. organization development

selection

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: A. design effect. B. compensation effect. C. sorting effect. D. incentive effect.

sorting effect

Research shows that all of the following except ______ are in the top three aspects of pay systems desired by workers. A. team-based pay B. changes in cost of living C. pay at market rate D. seniority

team based pay