10.6 MAN

What is the most general form of merit pay?

Annual salary increases

Which type of executive compensation is determined by the performance of the organization with the board of directors sometimes determining distribution?

Bonuses

Sabine's company allows all employees to become meaningful stakeholders in the organization. What type of group-level reward system does Sabine's company use?

Employee stock ownership plans

In what way is a Scanlon plan different from other gainsharing plans?

Employees receive the majority of the cost savings that the plan achieves

Jolanta's department using a reward system. When employees offer ideas that save the company money, the group will receive up to 20 percent of the money the company saves. Which type of reward system does Jolanta's department use?

Gainsharing

Which of the following is not part of a typical compensation plan for senior executives?

Hourly wages

Which of the following compensation plans formally base at least some meaningful portion of compensation on the relative value of the contributions of employees?

Merit pay plans

Why are piece-rate incentive plans prone to fail?

Performance is not always under the worker's control

Which plan is a reward system where an organization pays an employee a certain amount of money for every unit he or she produces?

Piece-rate incentive

Stitches, Inc. is a specialty clothing manufacturer. Clothing is produced in bulk quantities and then customized with monograms and other unique embellishments before final shipment. Employees on the custom stitching line are compensated for each individual item completed. What type of reward system is used in the custom stitching department?

Piece-rate incentive plan

What is the most common form of individual incentive?

Sales commissions

For many executives, which type of incentive makes up the largest share of their salary mix?

Stock options

What is the underlying assumption of a gainsharing program?

The employer and the employees all have the same goal

When are individual incentive pay plans most effective?

When rewards occur on a real-time basis

TruTech wants to reward employees for outstanding performance, however the reward needs to be a one-time reward based on the specific level of performance. TruTech should consider using ____.

incentives

New approaches to performance-based rewards include _____.

individualizing the reward system

To have the best chance of encouraging employees to work harder or better, rewards need to be tied specifically to _____.

performance

Destani's company just instituted an organization-wide incentive in which a certain amount of money, based on the company's earnings, is placed into a pool. At the end of the year, that money is evenly divided and distributed to all employees. This type of reward system is an example of _____.

profit sharing