Compensation :: Chapter Ten

Which of the following is NOT an advantage of team incentives?

ADVANTAGE: - stimulates problem solving - may better reflect how workers perform - minimize distinctions between team members

Which of the following is NOT an advantage of the all-salaried work force?

ADVANTAGES: - increases in the quality of work life - most employees prefer a salary plan - reduces turnover - produces more committed and loyal employees ANYTHING ELSE IS WRONG

Which of the following is NOT true of merit bonuses?

ARE TRUE: - viewed as less of an entitlement than merit pay - employees dislike them - thought to be a substitute for merit pay

Which of the following is NOT a long-term incentive plan?

ARE: - employee stock ownership plans - broad based option plans - performance plans

Which of the following is NOT a condition favoring gain-sharing plans?

DO FAVOR: - small unit usually less than 500 employees - participative management style - little planned in terms of capital investment - old enough so the learning curve has flattened - standards can be based on performance history

Which of the following does NOT support the use of an individual incentive plan?

DO SUPPORT: - stable individual performance standards - task accomplishment not dependent on performance of others - commitments strongest to individual profession DOES NOT: - unionized workforce

For any task completed in standard time or less, earnings are pegged at 120 percent of the time saved under the _____ plan.

Gan

In which of the following standard hour plans does the employee's bonus increase as time required to complete the task decreases?

Rowan plan

The authors argue that for merit pay to live up to its potential, all of the following should be done EXCEPT _____.

SHOULD BE DONE: - improving the accuracy of appraisals - allocating enough $ to truly reward performance - ensuring the size of merit increases differentiates across performance level ANYTHING ELSE IS WRONG

Which of the following gain sharing plans is designed to lower labor costs without lowering the level of a firm's activity?

Scanlon plan

What is the main difference between Scanlon and Rucker Plans?

Scanlon plans focus on labor savings, Rucker plans focus on a variety of savings

All of the following are reasons to choose a group plan vs. an individual plan EXCEPT:

TO DO IT: - production methods and labor mix must adapt to meet changing resources - when work stoppages are regular and controllable - when the management information across accounting systems are relatively primitive - performance standards for individual change to meet environmental pressures

Which of the following statements about merit pay is NOT true?

TRUE: - it has a small but significant effect on performance - departments with merit pay show higher performance - has a sorting effect UNTRUE: - removal of merit pay lowers satisfaction but not performance

Which of the following is NOT true about individual spot awards?

TRUE: - small companies may be more casual about recognition for spot awards - someone in an organization alerts top management about performance deserving an award - small companies are more subjectives in deciding the size of the awards NOT TRUE: - a majority of companies do not feel these awards are effective

Which plan varies the incentive level (two rates) as a function of the level of production relative to a standard? In this plan, a new rate is used once production expectations are met (e.g., 50/unit up to 7-10 units/hour and .70/unit of every unit over 11 and up units/hour).

Taylor plan

Which of the following does NOT provide for incentives based on standards that are expressed in terms of time period per unit of production?

WHAT?! ASK FINK -- couldn't understand him

Components identified as vital to the success of both Scanlon and Rucker plans are:

a productivity norm and effective worker committees

The common feature to all types of incentive plans is:

a standard of performance to determine magnitude of incentive pay

One common feature of all types of incentive plans is:

an established standard of performance that is used to determine the magnitude of the incentive pay

28. An incentive payment can be BEST described as:

any form of pay tied directly to achievement of performance standards

A _____ plan requires division of a task into simple actions and determination of the time required by an average skilled worker to complete each action.

bedeaux

Which plan divides a task into actions and measures the time required to perform each action? In this same plan workers receive a wage incentive for completing a task in less than standard time. This incentive is a direct function of the time saved in completing the task.

bedeaux plan

Which of the following is the most commonly used team incentive performance standard?

customer satisfaction measures

The best variable pay plan for employees when company financial performance is poor is _______________.

gain sharing

The trend in recent variable-pay design is to combine the best of _____ and _____ plans.

gain sharing and profit sharing

Which of the following statements is true of individual spot awards?

given to employees for exceptional performance as an add-on bonus

When a firm is _____ on business risk, and its outcomes are _____, its performance is more likely to be higher without any incentive plans.

high, uncertain

A gain-sharing plan that has proven easy to administer and communicate, which identifies the expected hours required to produce an acceptable level of output is the:

impro-share plan (spelling???? lol srry)

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

In gain-sharing plan formulas, _____ are in the numerator and _____ are in the denominator.

labor inputs, productivity outputs

An incentive system with three piecework rates is the _____ plan.

merit

What distinguishes individual incentive plans from individual merit plans?

merit pay is typically added to base, incentive is typically not added to base

A complex pay guideline ties pay not only to performance but also to position in the:

pay range

Which of the following is a disadvantage of gain-sharing plans?

pay-outs can occur even if a company's financial performance is poor

All of the following support the use of individual incentives EXCEPT

presence of a union who don't like individual incentives

The two most commonly used team incentive performance standards are:

productivity and quality

A penalty for poor performance rather than reward for good is an example of:

reverse incentive plan

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

When your auto mechanic charges you his hourly rate times the estimated time for a particular repair, regardless of how long the job actually takes, this is an example of:

standard hour plan

_____ have the disadvantage of requiring employees to spend money to obtain their incentive.

stock option plans

_____________ have (has) advantages of having minimal impact on the company's financial standards.

stock options

Paying a dime for every bottle collected and turned into a collection center is an example of a:

straight piece work system

The most frequently used incentive system is the:

straight piece work system

In which of the individual incentive plans, is rate of determination based on units of production per time period, and wages vary directly as a function of production level?

straight piecework system

Which of the following is an advantage of gain-sharing plans?

they increase employee's knowledge of business

It is observed that __________________ is/are commanding a larger share of the total compensation for all employee groups.

variable pay