MIE Ch 12

Which of the following is a drawback of using profit sharing?

It runs the risk of contributing to employee dissatisfaction.

Which of the following is a difference between profit-sharing plans and employee ownership plans?

The link between pay and performance is less obvious under ownership than under profit sharing.

Which of the following must a principal do to reduce agency costs?

align the agent's interests with the principal's interests

As jobs become less programmable,

behavior-oriented contracts become less likely.

A(n) _________ program is based on group or plant performance that does not become part of the employee's base salary.

gainsharing

The Scanlon plan is an example of a(n) ____ plan.

gainsharing

Which of the following is a compensation program that would best support an organizational culture of cooperation and problem solving?

gainsharing

Which of the following compensation programs uses a management style that gives importance to control?

incentive pay

In incentive pay, performance measures are primarily based on

individual productivity.

A(n) ____ is suitable for an organization with a culture that promotes individual competition

merit pay plan

Agents prefer a behavior-based contract when

outcome uncertainty is high.

Group incentives tend to measure performance in terms of

physical output.

In the _________ dimension, employees base their fairness assessments on the processes that were used to decide the amount of compensation.

procedural

Organizations may not need to rely on layoffs to reduce costs using which compensation program?

profit sharing

_________ is the perceived link between behavior and pay.

Instrumentality

Why does E. L. Thorndike's Law of Effect work?

It states a response followed by a reward is more likely to recur in the future.

Which of the following is a tool that allows companies to track financial results while monitoring progress in building the capabilities and acquiring the intangible assets they would need for future growth?

balanced scorecard

In merit pay programs, an individual's _________ represents his or her position in the pay range.

compa-ratio

Gainsharing plans differ from profit-sharing plans in that

gainsharing plans distribute payouts more frequently.

According to a merit increase grid, one of the factors that determine the size and frequency of pay increases is the

individual's performance rating.

According to expectancy theory, which of the following is the main influence of compensation?

instrumentality

A ____ plan gives employees the opportunity to buy the company's shares at a previously fixed price.

stock option