Compensation chapter 10

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

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

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

A reverse incentive plan

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

Gantt Plan

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 Plan

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

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

Easy to set equitable targets for all teams

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; Profit sharing

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

Improshare

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

Improshare Plan

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

Improving the accuracy of appraisal Allocating enough money to truly reward performance. Ensuring the size of the merit increase differentiates across performance levels

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

What distinguishes individual incentive plans from individual merit plans?

Merit pay is typically added to base, while incentives generally do not.

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

Merrick

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

Merrick System

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

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

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

Product costs not controllable by employees.

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

Production methods and labor mix must adapt to meet changing resources When work stoppages are regular and controllable When the management information and cost accounting systems are relatively primitive Performance standards for individuals change to meet environmental pressures

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

Removal of merit pay lowers satisfaction but not performance.

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 Plan focus on labor savings, Rucker Plans focus on a variety of savings.

Surveys show the most popular type of variable pay plans

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 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

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

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

Straight Piecework System

The most frequently used incentive system is the:

Straight Piecework System

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

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

The Rowan Plan

All the following support the use of individual incentives

The independent nature of task accomplishment The high commitment levels of workers to their profession The readily apparent performance standards

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

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

Which of the following is true of merit bonuses

They are viewed as less of an entitlement than merit pay Employees dislike them They are thought to be a substitute for merit pay

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

They increase employees' knowledge of business

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

Union support

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

Unionized work force.

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

Variable Pay

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

a productivity norm and effective worker comities

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.

An incentive payment can be BEST described as

any form of pay tied directly to achievement of performance standards.

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

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

labor inputs; productivity outcomes

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

pay range.

The two most commonly used team incentive performance standards are:

productivity and quality

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

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:

the Standard Hour Plan.