MGT 461 Chapters 9, 10, 11, & 12
Bedeaux
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. Standard Hour Rowan Bedeaux Merrick
True
A combination plan often favored by CEOs who don't like to make payouts when the company loses money is a completely self-funding plan. T or F
True
A group performance-based pay plan is superior to an individual plan when production methods labor mix must change to meet changing pressures. T or F
A large, decentralized organization with little performance-based pay
A person with low self-esteem is likely to seek _____. A small, hierarchical organization with pay plans based upon individual performance A flat organization with a significant amount of pay based upon performance A small organization with large benefits based on group performance A large, decentralized organization with little performance-based pay
5
A study of ratings of managers found that approximately only ____ percent of the managers were rated below average. 30 20 10 5
Requiring employees to pay higher deductibles and copays
A survey shows that the majority of employers are responding to increased benefit costs by _____. Requiring employees to pay higher deductibles and copays Laying off employees Dropping health care plans Relying on the Patient Protection and Affordable Care Act
Specifying performance levels and due dates
A team leader with a free-rider problem in his team can most likely maximize the performance of his team by: Instructing them to do their best Specifying performance levels and due dates Assigning tasks only to the top performers in the team Punishing free riders who fail to meet standards
True
All incentive plans share established standard against which worker performance is compared to determine the magnitude of the incentive pay. T or F
Decreased administrative expenses
All of the following are advantages of flexible benefits EXCEPT: Containment of costs of benefits Increased understanding of benefits by employees Reduced expenses of introducing new benefits Decreased administrative expenses
Behavior modeling
All of the following are categories of rater training EXCEPT ____ training. Rater-error Performance-standard Behavior modeling Performance-dimension
Cost-of-living increases
All the following EXCEPT ____ require periodically re-earning the added pay. Success-sharing plan Merit bonuses Profit-sharing plans Cost-of-living increases
True
An important implication of reinforcement theory is that the timing of payouts to employees is very important. T or F
Merrick
An incentive system with three piecework rates in the ___ plan. Taylor Gantt Halsey 50-50 Merrick
False
Employers prefer the noncontributory approach to financing benefits because this allows greater control of costs. T or F
True
Group Incentive pay increases turnover of better performers, while individual incentive increases turnover of poorer performers. T or F
Labor inputs; productivity outcomes
In gain-sharing plan formulas, ____ are int he numerator and _____ are in the denominator. Productivity measures; inputs Productivity measures; labor inputs Costs; revenues Labor inputs; productivity outcomes
False
In the formula "Behavior = f(M,A,E)" M denotes monetary incentive. T or F
True
In the long run, merit bonuses cost employers less than merit pay. T or F
An assembly line job that requires tightening nuts on an engine
In which of the following jobs is it most appropriate to use behaviorally anchored rating scales? The job of a trainer requires training new employees every month The job of a web designer that requires designing websites according to client expectations An assembly line job that requires tightening nuts on an engine A client relations job that requires bringing in new clients to a firm
True
Individual incentives yield higher productivity gains than group incentives. T or F
True
Keeping a performance diary can help employers defend against discrimination charges stemming from performance ratings. T or F
True
Many variable-pay plans have some form of profit trigger linked to revenue growth or profit margins. T or F
True
Maslow's theory suggest that performance-based pay can be demotivating if it impinges upon employees' capacity to meet daily living needs. T or F
Cash profit sharing plan
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 to much to administer. Which of the following variable-pay plans is Maxwell most likely to introduce? Balanced scorecard plan Gain-sharing plan Stock ownership plan Cash profit sharing plan
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? Gain-sharing plan Cash profit sharing plan Stock ownership plan Stock options plan
True
Merit pay is a pay-for-performance plan used for more than three-quarters of all exempt, clerical, and administrative employees. T or F
20
Most experts agree that employees do not begin to consider changing their behaviors unless payouts are at least ____ percent higher. 8 5 10 20
True
Some experts argue that applying total-quality-management principles to performance appraisals can improve them. T or F
Patient Protection and Affordable Care Act
The ______ requires individuals to maintain minimal essential health insurance coverage or pay a penalty unless exempted for religious beliefs or financial hardship. Patient Protection and Affordable Care Act Family and Medical Leave Act Health Maintenance Organization Act Consolidated Omnibus Budget Reconciliation Act
Selection
The ability triangle includes ____. Selection Performance Management Compensation Organization development
True
The authors argue that a system of flexible compensation could lead to more desirable employee behaviors at a lower total cost. T or F
False
The behaviorally anchored rating scales are inexpensive to develop but time-consuming to use. T or F
The MBO format
The best appraisal format for employee development is: The BARS format The MBO format The essay format The ranking format
Outsourcing
The biggest cost-containment strategy in recent years is the movement to: Benefit limitations HMOs Outsourcing Higher deductibles
False
The favorable tax status granted to many benefits is sage from the threat of recurrent tax reform proposals. T of F
False
The free-rider problem is common in firms using individual incentive plans. T or F
MBO
The most common form of outcomes-based appraisal is: The essay method MBO The performance standards review the BARS
Straight piecework system
The most frequently used incentive systems is the: Standard hour plan Straight piecework system Merrick system Taylor differential piece-rate plan
Ability
The most obvious sorting factor is ____. Seniority Ability Experience Educational Qualification
Culture
The motivation triangle includes _____. Selection Organizational design Culture Organization development
False
The performance of hourly workers is more accurately tied to quantifiable measures than the performance of managerial workers. T or F
Gain-sharing; profit-sharing
The trend in recent variable-pay design is to combine the best of ____ and ____ plans. Individual; group Gain-sharing; profit-sharing Halsey 50-50; Rowan Balanced scorecard; cash profit sharing
Pensions; medical coverage
Various studies have found that only two specific benefits curtailed employee turnover: _____ and ____. Vacation days; dental plans Profit-sharing plans; life insurance Retirement benefits; paid vacations Pensions; medical coverage
Higher turnover among high performers
When a company moves from an individual incentive plan to a group incentive plan, the company is most likely to experience _____. Higher turnover among high performers An increase in instrumentality Higher turnover among poor performers An increase in perceived equity
BARS
When a job involves very routine, mechanistic tasks, the most appropriate appraisal format is: BARS MBO standing rating scales alternation ranking
A base pay with low incentive and a variety of rewards
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 Monetary rewards with large incentives A large base pay and low-incentive pay A wide range of rewards and significant incentives
A base pay with low incentives and a variety of rewards
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 Monetary rewards with large incentives A large base pay with low-incentive pay A wide range of rewards and significant incentives
A variety of rewards with significant incentive pay
When employee performance measures are ambiguous and vary from time to time, but the organization's performance is fairly stable over time, the most effective type of compensation is to offer _____. A large base pay and low-incentive pay An increase in base pay A variety of rewards with significant incentive pay Monetary rewards with no benefits
Maslow's need theory
When identifying what is important to employees, which theory would be most useful? Expectancy theory Equity theory Maslow's need theory Agency theory
Poor Performers
When pay is based on individual performance, turnover tends to be highest among _____. Poor Performers Good performers Single women with children Ethnic minorities
True
When pay raises are based on events over which employees lack significant control, they are likely to regard the system as unfair. T or F
False
When raters must justify their scoring of subordinates in writing, the rating is less accurate. T or F
Work/life balance
Which of the following benefits is NOT mandated by state or federal legislation? Workers' compensation Work/life balance Social Security Unemployment insurance
Merrick System
Which of the following does NOT provide for incentives based on standards that are expressed in terms of time period per unit of production. Gantt Plan Rowan plan Halsey 50-50 method Merrick Plan
New benefits are more difficult to introduce
Which of the following is NOT a disadvantage of flexible benefit programs? Administrative burdens and expenses increase. Adverse selection of benefits by employees results in increase in costs. New benefits are more difficult to introduce. Flexible benefits are subject to nondiscrimination requirements in Section 125 of Internal Revenue Code.
Improshares
Which of the following is NOT a long-term incentive plan? ESOPs Broad-based option plans (BBOPs) Improshares Performance plans
A majority of companies do not feel that these awards are effective
Which of the following is NOT true about individual spot awards? Smaller companies may be more casual about recognition for spot awards Someone in an organization alerts top management about performance deserving of an award A majority of companies do not feel that these awards are effective Smaller companies are more subjective about deciding the size of the award
Increase in performance pressure and stress
Which of the following is a negative outcome of the management by objectives method? Increased difficulty of the planning process Decrease in superior/subordinate communication Increase in performance pressure and stress Lack of direction of work units
They increase the involvement of employees in choosing benefit plans.
Which of the following is an advantage of flexible benefit plans? They require no expenditure from the employees They decrease the administrative burdens from employers They decrease the costs as employees pick only those benefits they will use resulting in the subsequent high benefit utilization. They increase the involvement of employees in choosing benefit plans.
It defers a portion of taxes to employees
Which of the following is an advantage of providing stock ownership options as variable pay to employees? It reinforces team identity It is the simplest type of variable-pay plan It defers a portion of taxes to employees It provides a direct pay-performance link
An employee leaving a high-paying job for one that provides more work/life balance
Which of the following is an example of the sorting effect in action? An employee leaving a high-paying job for one that provides more work/life balance The provision of across-the-board pay increases by a company The provision of cost-of-living increases by a company An employee choosing fewer incentives in his flexible compensation plan
It is the error of consistently rating someone higher than is deserved
Which of the following is statements is true of leniency errors? It is the error of consistently rating someone higher than is deserved. It is the error of downgrading an employee across all performance dimensions exclusively because of poor performance on one dimension. It is the error of avoiding extremes in ratings across employees. it is the error of giving better ratings to individuals who are like the rater in behavior and personality.
It is the error of consistently rating someone higher than is deserved.
Which of the following is statements is true of leniency errors? It is the error of downgrading an employee across all performance dimensions exclusively because of poor performance on one dimension. It is the error of consistently rating someone higher than is deserved. It is the error of avoiding extremes in ratings across employees. It is the error of giving better ratings to individuals who are like the rater in behavior and personality.
Customer satisfaction measures
Which of the following is the most commonly used team incentive performance standard? Quality of goods Customer satisfaction measures Financial performance Quality of service
Removal of merit pay lowers satisfaction but not performance
Which of the following statements about merit pay is NOT true? It has small but significant effect on performance Removal of merit pay lowers satisfaction but not performance Departments and units with merit pay show higher performance Merit pay has a sorting effect
Group insurance benefits has relatively easy qualification standards
Which of the following statements is true of employee benefits? Employers can substitute insurance benefits for job security Group insurance benefits has relatively easy qualification standards Most employee benefits are taxable Many group-based benefits are obtained at a higher rate than could be obtained by employees action on their own.
Group insurance benefits has relatively easy qualification standards.
Which of the following statements is true of employee benefits? Employers can substitute insurance benefits for job security. Group insurance benefits has relatively easy qualification standards. Most employee benefits are taxable. Many group-based benefits are obtained at a higher rate than could be obtained by employees acting on their own.
Expectancy theory
Which of the following theories states that people choose the behavior that leads to the greatest reward? Maslow's need theory Expectancy theory Herzberg's two-factor theory Goal-setting theory
True
Workload and work variety are both components of total reward system. T or F
Merit bonus
____ is an individual level form of performance pay. Risk sharing Gain sharing Merit bonus Success sharing
COBRA (1984)
_____ allows employees who have resigned or have been laid off through no fault of their own to continue receiving health coverage under their employer's plan at a cost borne by the company. Health Maintenance Act (1973) FLSA (1938) The tax reform of 1982 COBRA (1984)
Instrumentality
_____ is employees' beliefs that requisite job performance will be rewarded by the organization.
BARS
_____ is the best appraisal format across the five criteria for evaluating rating formats. Ranking MBO BARS Standard rating scales
An employee benefit handbook
_____ is the most frequently used medium for communicating employee benefits. A notice board A seminar An employee benefit handbook A meeting with the chief executive officer
Stock options plans
______ have the disadvantage of requiring employees to spend money to obtain their incentive. Cash profit sharing plans Balanced scorecard plans Stock options plans Deferred profit sharing plans
Downgraded across all performance dimensions because of poor performance on one dimension
A horn error occurs when an employee is: Consistently rated higher than deserved Given a favorable rating on all job duties based on his or her impressive performance in just one job function. Downgraded across all performance dimensions because of poor performance on one dimension. Consistently rated lower than deserved
True
A major problem in group incentive plans is that performance targets are not correctly set. T or F
True
A major reason for the proliferating cost of benefit programs is the narrow focus of benefit administrators. T of F
Second
A recent survey shows employees ranking employee benefits ____ in explaining job satisfaction. First Second Third Last
Team-based pay
According to research, which of the following is NOT one of the most important factors for employees influencing their pay systems? Team-based pay Changes in cost of living Pay at market rate Seniority
Equity
According to the _____ theory, relative pay is important as employees evaluate their pay-effort balance in comparison to other employees. Equity Expectancy Agency Reinforcement
False
Agency theory argues that employees prefer risky pay as rewards can be greater than a salary. T or F
False
All employee benefits provided by employers are taxable. T or F
Benefit limitation
As part of the efforts to bring down the employee benefit cost to the company, GrindStop Corp. restricts the number of visits to the dentists covered in the dental plan to two per year. Which of the following cost-containment strategies is used by GrindStop? Copay Benefit limitation Administrative cost containment Wellness program
Performance
Available evidence indicates managers believe the most important factor for pay increases is _____. Experience Nature of the job Seniority Performance
Benefit ceiling
By limiting liability for an employee's hospital stay costs to $200,000, an employer is using a cost-containment measure known as: Dual coverage Benefit ceiling Coinsurance Deductible
False
Central tendency errors are the most difficult form of error to eliminate. T or F
A productivity norm and effective worker committees
Components identified as vital to the success of both Scanlon and Rucker plans are: Top management support and primary focus on wage incentives A flexible pay out formula and low turnover rates Union and top management support A productivity norm and effective worker committees
Medical Coverage
DrenchFort Corp. is a small company that pays high wages. As its wages are high, it does not provide any benefits. Recently, it has noticed that its employee turnover has increased, so it decides to provide benefits to retain employees. Which of the following benefits is most likely to reduce turnover? Counseling service Early retirement plan Medical coverage Profit-sharing plan
True
During performance appraisals, managers tend to focus on either good performance, counterproductive performance, or both. T or F
Clone error
During the performance review of her employees, Sarah gives higher ratings to employees from her hometown, Oklahoma, as she believes that people from Oklahoma are hard working and trustworthy. Which of the following rating errors is Sarah exhibiting. Severity error Horn error Spillover error Clone Error
True
Employees who are dissatisfied with performance appraisals are less satisfied wit their pay. T or F
True
Employees working under individual incentive plans tend to resist the introduction of new technology. T or F
False
Employees' preferences of various benefits can be predicted accurately from demographic data. T or F
False
Flexible benefit plans eliminate the involvement of employees. T or F
False
Flexible compensation is based on the idea that the organization knows what package of rewards would be sit an individual employee's needs. T or F
Gantt
For any task completed in standard time or less, earnings are pegged at 120 percent of the time saved under the ___ plan. Halsey 50-50 Gantt Taylor Rowan
True
For the same level of performance, employees low in a pay range receive higher percentage increases than employees higher in the range. T or F
False
Gain sharing poses greater risk to individual employees than profit sharing. T or F
False
Gain-sharing plans do not to use historical standard to set productivity standards since environmental conditions can change quickly. T or F
False
Goal-setting theory argues that employees' performance is maximized when performance targets are unchallenging and unspecific. T or F
Increase the base pay component of its pay mix
Grabhouse Inc. is experiencing an increase in turnover rates of its top employees. Upon consulting with its managers for the reasons for this increases, Grabhouse finds that employees are uneasy with the current pay mix as it involves too many risky elements. In order to make its pay mix less risky, Grabhouse needs to: Increase the base pay component of its pax mix Introduce a profit-sharing plan to its pay mix Introduce a risk-sharing plan to its pay mix Increases the merit bonus component of its pay mix
False
Halo error is the error that occurs when an employee is downgraded across all performance dimensions exclusively because of poor performance in one dimension. T or F
True
Herzberg's two-factor theory argues success-sharing plans will be motivating, while at-risk plans will be demotivating. T or F
True
High performance ratings are nearly always statistically related to high merit increases. T or F
12 weeks
How many weeks of leave does Family Medical Leave Act (1993) mandate for all workers at companies that employ 50 or more people? 4 weeks 8 weeks 12 weeks 16 weeks
False
If the future cost containment of a benefit may be a problem, the benefit should be offered on a noncontributory basis. T or F
Standard hour
If you had repair work done on your car, the shop most likely used the ____ plan to pay the mechanic. Bedeaux Standard plan Halsey 50-50 Straight piecework
True
In most Asian cultures, employees do not welcome performance feedback. T or F
Severity Error
Jake's new car was dented by his employee, Steve. Ever since then, Jake has been consistently giving lower ratings to Steve during performance reviews to get back at him. Which of the following errors has been exhibited by Jake? Halo error Severity error Leniency error Clone error
Spillover Error
Last year your performance was not very good and your performance rating was below average, but this year you have done very well by exceeding your performance goals. To your surprise, your boss gives you just an average performance rating. What error has your boss most likely committed? Horn error Halo error Severity error Spillover error
Less than 8 percent
Louie received the highest performance rating and is in the second quartile of his pay range. He received a pay increase of 8 percent. Bart also received the highest performance ratings and is in the fourth quartile. Given the way most merit increases grids work, what size of pay increase would you expect Bart to receive? Less than 8 percent More than 8 percent 8 percent There is no relationship between ratings and position in pay range.
True
One of the best strategies for determining external equity is to conduct a benefit survey. T or F
Stock plans
One of the most preferred benefits is _____. Stock plans Profit sharing Shorter working hours Early retirement
Straight piecework system
Paying a dime for every bottle collected and turned into a collection center is an example of a: Standard hour plan Merrick system Straight piecework system Rowan plan
True
Risk-sharing plans include a provision for cuts in base pay that are only recaptured in years when an organization meets performance objectives. T or F
False
Scanlon plans are designed to lower labor costs by lowering the level of a firm's activity. T or F
True
Security in terms of compensation refers to the predictability of one's paycheck from one time to the next. T or F
A flexible benefit
A benefit plan that allocates a set dollar amount to employees and allows them to select benefits is called ____ plan. A select choice A no-deductible A flexible benefit A flat dollar benefit
True
A disadvantage of flexible benefit programs is that they increase administrative burdens. T or F
Are likely to be inflated if they are not anonymous.
Subordinate ratings _____. Are likely to be inflated if they are not anonymous. Are immune to halo errors Are immune to horn errors Are used by 70% of all team-style organizations
True
Supervisors tend to weigh negative attributes more heavily than positive attributes. T or F
Special recognition plans
Surveys show the most popular type of variable plan plans are _____. Stock option plans Gainsharing plans Individual incentive plans Special recognition plans
Leads to higher ratings
Telling raters that sometimes the work environment and system affect job performance more than the individual employee's behavior: Makes the ratings completely accurate Leads to higher ratings Has no effect on the ratings Leads to lower ratings
False
The Employment Retirement Income Security Act (1974) requires employers to offer some form of pension. T of F
True
The central issue involving merit pay is how to get employees to view raises as a reward for performance. T or F
A Wide range of awards beyond just money
The corporate performance of Yellow Corp. is fairly stable. However, it is difficult to measure individual performance. In this case, the most effective compensation mix is to offer _____. A high base pay with high incentives Monetary rewards alone A large base pay and low-incentive pay A wide range of awards beyond just money
False
The family medical leave act of 1993 mandates 20 weeks of leave for all workers at companies that employ 10 or more people. T or F
The U.S. Chamber of Commerce
The most widely used benefit survey is conducted by: The U.S. Chamber of Commerce Watson-Wyatt The Society for Human Resource Management The American Compensation Association
False
The percentage of companies using some form of variable pay is declining because many employees prefer base wages. T or F
False
The total-quality-management advocates contend that informing raters that the work environment has more influence on performance than individual employee behavior will make the raters' rate lower. T or F
Less than 15
The typical employee can recall _____ percent of the benefits he or she receives. Almost 50 Less than 15 Over 30 40
False
Today, benefits make up about 25 percent of payroll costs. T or F
Stock ownership plan
TreeDen corp. experiences as increase in employee turnover rate. Upon investigating, it discovers that employees are dissatisfied with the company's pay. Employees cannot see a direct link between their performance and their pay. They are also unhappy about having to pay out of their pockets to obtain grants. In this case, TreeDen is most likely using a ____. Stock ownership plan Cash profit sharing plan Gain-sharing plan Team incentive plan
Determine whether the accident happened.
Trumbrella Corp. is a pharmaceuticals company. One of its employees reports that he had an on-the-job injury caused by slippery factory floor that broke his back. When Trumbrella initiates its claims processing, it should first: Determine whether the accident happened Determine if the employee is eligible for any benefit Calculate the payment required to be paid to the employee. Contact the insurance companies to enquire about the possibility of a joint payment.
Easy to set equitable targets for all teams
Which of the following is NOT an advantage of team incentives? Stimulates problem solving May better reflect how work is performed Easy to set equitable targets for all teams Minimizes distinctions between team memebers
They are more expensive than merit pay in the long run
Which of the following is NOT true of merit bonuses? They are viewed as less of an entitlement than merit pay. They are more expensive than merit pay in the long run Employees dislike them They are thought to be substitute for merit pay
Payouts can occur even if a company's financial performance is poor.
Which of the following is a disadvantage of gain-sharing plans? Payouts can occur even if a company's financial performance is poor Pay-performance link is direct Employees are required to put up money to exercise grants Mandatory stock ownership required by gain-sharing plans can increase turnover rates
BARS
Which of the following is the best appraisal format in terms of legal defensibility? BARS MBO Essay format Ranking Method
They are given to employees for exceptional performance as an add-on bonus.
Which of the following statements is true of individual spot awards? They are an example of long-term incentives They are more expensive than merit pay increases They are given to employees for exceptional performance as an add-on bonus. They are given to all employees as a one-time cost-of-living adjustment.
Paired-comparison ranking
Which of the following types of rankings would be least preferred by managers of more than 10-15 employees. Straight ranking Alternation ranking Paired-comparison ranking Forced distribution ranking
Valence
____ is the value employees attach to the organization rewards offered for satisfactory job performance. Equity Instrumentality Valence Reinforcement
Agency
____ theory argues that performance-based pay is the optimal compensation choice for complex jobs, where monitoring employee performance is difficult.
Herzberg's two-factor
_____ theory states that success-sharing plans will be motivating, whereas at-risk plans will be demotivating. Equity Expectancy and agency Herzberg's two-factor Agency
Product Market Share Data
______ are NOT used for determining employee benefit preferences. Demographic data Product market share data Employee surveys Cafeteria-style plans