Compensation Final
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
The _____ publishes extensive information on various occupations in different geographic areas. It is a major source of publicly available compensation data.
Bureau of Labor Statistics
there is evidence that every 10 percent increase in the bonus paid to employees by a firm yields a ______ percent increase in ROA to the firm.
1.5%
Most experts agree that employees do not being to consider changing their behaviors unless payouts are at least _____ percent highers
20%
Pay ranges for office and production work commonly range between _____ and _____ percent.
5, 15
according to ____theory, relative pay is important as employees evaluate their pay effort balance in comparison to other employees.
Equity theory
For any task completed in standard time or less, earnings are pegged at 120 percent of the time saved under the _____ plan.
Gantt Plan
_________ theory contends that success sharing will be motivating but at risk plans will be demotivating..
Herzbergs Two Factor Theory
_____ theory states that success sharing plans will be motivating, whereas at risk plans will be demotivating
Herzbergs two factor theory
When a firm is ______on a business risk, and its outcomes are _________, its performance is more likely to be higher without any incentive plans.
High, Uncertain
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
Which of the following is true regarding the Employment Context Index (ECI)?
It allows comparison of changes in its average cost to an all industry average.
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 paln formulas, _______are in the numerator and the _______are in the denominator.
Labor Inputs over Productivity outcomes
Aging the market data to a point halfway through a plan year is called______.
Lead/Lag Approach
A company using a skill based pay system prices the job of lead assembler between 10 and 22 dollars per hour. Survey data showed that the job of assembler averaged 10 per hour and the job of assembly supervisor averaged 22 per hour. The company is using the ___________ method of job matching.
Low High Method of Job Matching
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
Size of pay differentials between grades should ______.
Support career movement through the pay structure
All of the following support the use of individual incentives EXCEPT:
Supports: - The independent nature of task accomplishment - The high commitment levels of workers to their profession - The readily apparent performance standards
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
In most organizations, the responsibility for managing a pay survey lies following statements is true about with _________.
The compensation manager
For organizations using a skill competency based pay system or generic job descriptions, the best approach for pricing jobs is ______.
The low high approach
Which of the following jobs would most likely fall into a fuzzy market?
The position of senior director of future vision services that was filled by a software engineer with e commerce, marketing and theater experience.
when employee performance is easily measured and the organizations performance is fairly stable over time, the most effective type of compensation is to offer____.
monetary rewards with large incentives
the key to designing a pay for performance system rests on standards. specifically, managers need to be concerned about the:
objectives, measures, eligibility, and funding
A complex pay guideline ties pay not only to performance but also to position in the:
pay range
available evidence indicates managers believe the most important factor for pay increases is _______
performance
when pay is based on individual performance, turnover tends to be highest among_________.
poor performners
Which of the following is NOT a condition favoring gain sharing plans?
product costs not controllable by employees
the two most commonly used team incentive performance standards are:
productivity and quality
Which of the following is often used to set pay ranges?
quartiles and percentiles
Pay ranges:
reflect the differences of performances or experience that an employer wished to recognize with pay
which of the following focuses on increasing the frequency of desired behaviors and decreasing the frequency of undesired behaviors through environmental consequences?
reinforcement theory
which of the following statements about merit pay is NOT true?
removal of merit pay lowers satisfaction but not performance
the ability triangle includes _____.
selection, recruitment, training
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's plan
The first step in setting competitive pay and designing a pay structure is to _______.
specify a pay level policy
Which of the following statistical measures shows how similar or dissimilar market rates are from each other?
standard deviation
_________ have advantages of having minimal impact on the companys financial standards.
stock options
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
The process of multiplying survey data by some factor judged to reflect the difference between a survey benchmark job and a company job is called _____
survey leveling
to multiply the survey data by some factor that corresponds to the analysts judgement of the difference between the company and the survey job is called:
survey leveling
Which of the following is a n advantage of gain-sharing plans?
They increase employees knowledge of business
______ measures reveal competitors use of performance based cash payments.
Total Cash
which of the following is NOT true?
True: - more companies are using pay based upon individual group and organizational performance - workers with higher security needs may accept lower pay for higher wage security - workers may need higher pay to stay and perform in an at risk company
Which of the following does NOT support the use of an individual incentive plan?
Unionized work force
_____ is the value employees attach to the organization rewards offered for satisfactory job performance.
Valence
In the regression equation, y = a + bx, job evaluation points are denoted by ____.
X
when an organizations 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 variety of rewards
when an organizations 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
All of the following are examples of potential anomalies EXCEPT ________.
a large variation in average base pay for a job across companies.
a person with low self esteem is likely to seek ________.
a large, decentralized organization with little performance based pay.
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
which of the following best supports a culture of flexibility and innovation?
a strong commitment to job security
When employee performance measures are ambiguous and vary from time to time, but he organizations performance is fairly stable over time, the most effective type of compensation is to offer_____.
a variety of rewards with significant incentive pay
the corporate performance of Yellow Corp. is fairly stable. However, it is difficult to measure individiual performance. In this case, the most effective compensation mix is to offer.
a wide range of rewards beond just money
the most obvious sorting factor is______
ability
________theory argues that performance based pay is best for complex jobs where monitoring employee performance is difficult.
agency theory
because employers are raising employee pay at various times during the year, survey data must be updated using a process called ______ or ______.
aging OR trending
a key factor in increasing trust in top management is __________.
an acceptable appraisal system
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
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 salary increases are based on inputs, or performance, companies are following:
equity theory
the purpose of collecting data on the number of employees in a pay survey is to ______.
estimate the organizations impact on the labor market
Which of the following theories states that people choose the behavior that leaders to the greatest reward?
expectancy theory
_________theory contends that we choose to do those things that we believe are most likely to lead to desired rewards.
expectancy theory
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
financial data in pay surveys are used to _______.
group firms by size
when a company moves form an individual incentive plan to a group incentive plan, the company is most likely to experience________.
higher turnover among high performers
_____is employees beliefs that requisite job performance will be rewarded by the organization.
instrumentality
Which of the following is true regarding the Employment Cost Index (ECI)?
it allows comparison of labor costs to all industry averages
Aging the market data to a point halfway through a plan year is called _____.
lead/lag updating
A market pay line _____.
links a company's benchmark jobs with market rates paid by competitors.
A(n)________ requires annually re earning the added pay.
lump sum bonus
the ____ pay strategy emphasizes external competitiveness and deemphasizes internal alignment
market pricing
when developing a flexible compensation system, which theory or theories would be most useful?
maslow's theory and herzbergs theory
The ____ minimizes the distortion of the central tendency caused by outliers.
median
the ______minimizes distortion of the central tendency caused by outliers.
median
_______is an individual level form of performance pay.
merit bonuses
What distinguishes individual incentive plans from individual merit plans?
merit pay is typically added to base, while incentives generally do not.
according to research, which of the following is NOT one of the most important factors for employees influencing their pay systems?
team based pay
according to expectancy theory, the instrumentality is:
the perceived probability that a specified level of behavior will receive a specific level of reward
which of the following statements is true of individual spot awards?
there are given to employees for exceptional performance as an add-on bonus
the answer to the question of how many firms to include in a pay survey is ______.
there are no firm rules, no set amount. Enough to have a stable estimate of relevant companies.
which of the following is NOT true of merit bonuses?
they are more expensive than merit pay in the long run
the authors argue that for merit pay to live up to its potential, all of the following should be done EXCEPT ______.
they are more expensive than merit pay in the long run.
which of the market pricers?
they assume that little value is added through internal alignment
which of the following statements is true regarding broad bands?
they foster cross functional growth
_____ measures competitors use of performance based pay.
total cash
this measure of compensation may overstate competitors pay
total cash compensation
which of the following is NOT an advantage of the all salaried work force?
union support
it is observed that __________is/are commanding a larger share of the total compensation for all employee groups.
variable pay
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 Plan
________have the disadvantage of requiring employees to spend money to obtain their incentives.
Stock Option Plans
Components identified as vital to the success of both Scanlon and Rucker plans are
A productivity norm and effective worker comities
______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 standard hour plans does the employees bonus increase as time required to complete the task decreases?
The Rowman Plan
Which of the following is the most commonly used team incentive performance standard?
Customer Satisfaction Measures
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
in ______ theory, incentive pay is motivating if it helps an employee gain a sense of achievement, recognition or approval.
Maslow's Theory
when identifying, what is important to employees, which theory would be most useful?
Maslows Need Theory
An incentive system with three piecework rates is the _____ plan.
Merrick
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 are reasons to choose a group plan vs. an individual plan EXCEPT:
Reasons to choose: - Production methods and labor mix must adapt to meet changing resources - When work stoppages are regular and controllable - 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 gain sharing plans is designed to lower labor costs without lowering the level of a firms 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.
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
________ shows how competitors value work in similar jobs.
base wage
applying the job evaluation process to pay survey jobs to assess the degree of match between survey jobs and benchmark jobs are called the ______ approach.
benchmark conversion approach
A common first step in interpreting survey data is to _____.
check for the accuracy of job matches.
the first step in interpreting survey data is _____.
check for the accuracy of job matching
which among the following components of a reward system is a dimension of empowerment?
control
all of the following EXCEPT _______ require periodically re-earning the added pay.
cost of living increases.
the motivation triangle includes____.
culture, compensation, performance management
The second major decision in pay level determination is to _______.
define the purpose of a survey
according to expectancy theory, the valence of an outcome is the:
degree to which an outcome is desired
The final major decision in pay level determination is to_____.
design grades and ranges or bands
the amount of fairness given to employees refers to ________.
distributive justice
compensation should reinforce all but which of the following behaviors?
doesn't try to keep turnover to nearly 0
