Comp Ch 9, 10, 11

A study of ratings of managers found that approximately only _____ percent of the managers were rated below average.

5

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

A majority of companies do not feel that these awards are effective.

_____ theory argues that performance-based pay is the optimal compensation choice for complex jobs, where monitoring employee performance is difficult.

Agency

In which of the following jobs is it most appropriate to use behaviorally anchored rating scales?

An assembly line job that requires tightening nuts on an engine

When a job involves very routine, mechanistic tasks, the most appropriate appraisal format is:

BARS

_____ is the best appraisal format across the five criteria for evaluating rating formats.

BARS

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

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?

Clone error

Which of the following is NOT true?

Companies are moving back to entitlement-oriented pay to reduce turnover.

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

Easy to set equitable targets for all teams

Agency theory argues that employees prefer risky pay as rewards can be greater than a salary.

False

Flexible compensation is based on the idea that the organization knows what package of rewards would best suit an individual employee's needs.

False

Gain sharing poses greater risk to individual employees than profit sharing.

False

Gain-sharing plans do not to use a historical standard to set productivity standards since environmental conditions can change quickly.

False

Goal-setting theory argues that employees' performance is maximized when performance targets are unchallenging and unspecific.

False

Group pay is always more effective than individual pay.

False

In the formula "Behavior = f (M, A, E)," M denotes monetary incentives.

False

Scanlon plans are designed to lower labor costs by lowering the level of a firm's activity.

False

Subordinate ratings are more accurate when they are not anonymous.

False

The Rowan plan uses a standard that is purposefully set high requiring high performance levels.

False

The behaviorally anchored rating scales are inexpensive to develop but time-consuming to use.

False

The performance of hourly workers is more accurately tied to quantifiable measures than the performance of managerial workers.

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.

False

Unions prefer individual incentive pay plans to group incentive pay plans since members can earn more money.

False

When raters must justify their scoring of subordinates in writing, the rating is less accurate.

False

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

Gantt

_____ theory states that success-sharing plans will be motivating, whereas at-risk plans will be demotivating.

Herzberg's two-factor

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

Improshares

Which of the following is a negative outcome of the management by objectives method?

Increase in performance pressure and stress

_____ is employees' beliefs that requisite job performance will be rewarded by the organization.

Instrumentality

Which of the following rating formats has the lowest rating errors?

MBO

When identifying what is important to employees, which theory would be most useful?

Maslow's hierarchy of needs

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

Merrick

Which of the following types of rankings would be least preferred by managers of more than 10-15 employees?

Paired-comparison ranking

When pay is based on individual performance, turnover tends to be highest among _____.

Poor Performers

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

Removal of merit pay lowers satisfaction but not performance.

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?

Severity error

Droppiece Inc. is a company that provides more performance-based pay and less base pay than its competitors. Who among the following is most likely to join Droppiece?

Stella, a recent college graduate who loves to take on a challenge

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

Stock options plans

Which of the following is NOT a strength of supervisors as raters?

Their ratings are immune to halo and leniency errors.

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

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

Which of the following is NOT true regarding self-ratings?

They are immune to leniency errors.

Which of the following statements is true regarding rater training?

Training to reduce halo errors and improve accuracy has been most successful.

A fast and efficient worker would earn more money under a Rowan plan than under a Halsey 50-50.

True

A major problem in group incentive plans is that performance targets are not correctly set.

True

A problem with incentive pay plans is workers may end up focusing exclusively on behaviors that are rewarded.

True

According to the agency theory, because employees prefer a salary, they will demand a wage premium in exchange for accepting performance-based pay.

True

All incentive plans share an established standard against which worker performance is compared to determine the magnitude of the incentive pay.

True

During performance appraisals, managers tend to focus on either good performance, counterproductive performance, or both.

True

Employees who are dissatisfied with performance appraisals are less satisfied with their pay.

True

Employees working under individual incentive plans tend to resist the introduction of new technology.

True

Evidence suggests that skill-based pay may not increase productivity.

True

Evidence suggests that talented people are motivated to join organizations with strong links between performance and pay.

True

For the same level of performance, employees low in a pay range receive higher percentage increases than employees higher in the range.

True

Group incentive pay increases turnover of better performers, while individual incentive increases turnover of poorer performers.

True

Individual incentives yield higher productivity gains than group incentives.

True

Keeping a performance diary can help employers defend against discrimination charges stemming from performance ratings.

True

MBO requires more paperwork than other rating methods and increases both performance pressure and stress.

True

Maslow's theory suggests that performance-based pay can be demotivating if it impinges upon employees' capacity to meet daily living needs.

True

Merit pay is a pay-for-performance plan used for more than three-quarters of all exempt, clerical, and administrative employees.

True

Performance plans typically feature corporate performance objectives for a time three years in the future.

True

Risk-sharing plans include a provision for cuts in base pay that are only recaptured in years when an organization meets performance objectives.

True

Standard hour plans are better for nonrepetitive jobs requiring numerous skills for completion.

True

The central issue involving merit pay is how to get employees to view raises as a reward for performance.

True

The trend today is toward less stable and less secure compensation packages.

True

Workload and work variety are both components of a total reward system.

True

_____ is the value employees attach to the organization rewards offered for satisfactory job performance.

Valence

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

When an organization's performance has frequent highs and lows, but individual performance is fairly stable, and performance measures are clear, the most effective compensation mix is to offer _____.

a large base pay and low-incentive pay

A person with low self-esteem is likely to seek _____.

a large, decentralized organization with little performance-based pay

In situations where the nature of the task is so uncertain that it may be difficult to specify expected goals, the most appropriate rating format is _____.

a standard rating scale

In _____ ranking, raters look at a list of employees, decide who the best employee is, and cross that person's name off the list. From the remaining names, the manager decides who the worst employee is and crosses that name off the list—and so forth.

alternation

Subordinate ratings _____.

are likely to be inflated if they are not anonymous

All of the following are categories of rater training EXCEPT _____ training.

behavior modeling

A horn error occurs when an employee is:

downgraded across all performance dimensions because of poor performance on one dimension.

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

gain-sharing; profit-sharing

Among peer raters, the most objective evaluations are given by:

high-performing workers.

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

Grabhouse Inc. is experiencing an increase in turnover rates of its top employees. Upon consulting with its managers for the reasons for this increase, 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 pay mix.

Telling raters that sometimes the work environment and system affect job performance more than the individual employee's behavior:

leads to higher ratings.

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 _____.

monetary rewards with large incentives

A major criticism of standard rating scales is that:

raters have different definitions of scale levels.

The ability triangle includes _____.

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:

sorting effect.

Surveys show the most popular type of variable pay plans are _____.

special recognition plans

If you had repair work done on your car, the shop most likely used the _____ plan to pay the mechanic.

standard hour

TreeDen Corp. experiences an 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

The most frequently used incentive system is the:

straight piecework system

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

straight piecework system.

The best appraisal format for employee development is:

the MBO format.

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

using more peer raters than supervisor raters