Chapter 10 365
The disadvantages of profit sharing include all of the following EXCEPT that:
effective profit sharing plans require a second HR program.
he advantages of employee stock ownership plans include all of the following EXCEPT that:
employees' pensions are less vulnerable due to diversification.
A major problem of employee stock ownership plans is that:
it places employees' pensions at risk.
To minimize the problems of merit raises, organizations should use:
merit guidelines.
A problem with creating team incentive plans is that:
not all teams that are created are alike.
Executive compensation consists of all of the following EXCEPT:
proficiency adjustments.
Group incentive plans do all of the following EXCEPT:
reducing free-ride effect.
Compensation committees justify large executive compensation packages in the following ways EXCEPT:
the pay gap between the CEO and employees builds credibility.
The performance threshold in incentive pay programs is:
the minimum level an employee must reach in order to qualify for variable pay.
Enterprise incentive plans include:
stock options.
Profit sharing refers to any procedure by which an employer pays employees:
current or deferred sums based on the organization's financial performance.
When employees receive a higher rate of pay for all of their work and production exceeds a standard level of output, they are working under the _____ incentive plan.
differential piece rate
Team incentive bonuses may be paid out in all of the following ways EXCEPT by distributing it:
on the basis of individual performance appraisal.
Special benefits given to executive employees, such as assigned chauffeurs, country club memberships, and special vacation policies, are known as:
perquisites
Common output measures for productivity include:
sales.
The straight commission plan is limited by all of the following disadvantages EXCEPT that:
salespeople will stress low-priced products.
An incentive given for a special employee contribution not directly tied to a performance standard is a:
spot bonus.
Long-term incentive plans in which rights are granted to executives to purchase shares of their company's stock at a fixed price for a fixed period of time are known as:
stock options.
A compensation plan that compensates sales employees based on a percentage of sales is known as a:
straight commission plan.
A major concern of executive compensation involves:
the amount of compensation.
The greatest influence on executive base salary is most likely:
the levels of competitive salaries in the job market.
According to the National Center for Employee Ownership, in 2013 approximately _____ organizations have employee stock ownership plans (ESOP) for their employees.
11,000
A study on bonus versus actual pay raises showed that improving one's pay through merit increases by 1 percent would increase future performance by ____ percent.
2
In most profit-sharing plans, about _____ of the net profit is shared.
20 to 25 percent
Executive base salaries represent between _____ percent of the total annual compensation.
30 and 40
ESOPs can qualify as tax-exempt employee trusts under section _____ of the Internal Revenue Code.
401(a)
In 2011, a study by the American Psychological Association found that _____ of employees feel they receive inadequate nonmonetary awards and recognition for their contributions at work.
43 percent
Research shows that a merit increase in the range of _____ is necessary to serve as a pay motivator.
7 to 9 percent
According to one budget survey, _____ percent of reporting organizations use variable pay.
80
Which plan provides opportunities for executives to purchase shares of their organization's stock valued at full market or a discounted price?
Stock purchase
Compensation specialists recognize all the following generations of employees EXCEPT:
Synthesizers.
_____ are a group of individuals who are over the age of 60 and are less likely to spend money on themselves.
Traditionalists
Piecework is appropriate when:
a job is fairly standardized.
Management should guard against incentive payments being seen as _____.
an entitlement
Rate busting refers to
an increase in output that results in the disapproval of fellow employees.
When setting performance measures for incentive systems, we can say that the best measures are those that:
are quantitative, simple to understand, and show a clear relationship to improved performance.
_____ is a bonus incentive plan which uses employee and management committees to gain cost-reduction improvements.
The Scanlon Plan
The philosophy behind the Scanlon Plan is that:
employees should make suggestions to improve performance and be rewarded for their contributions.
The purpose of a profit-sharing plan is to:
give employees the opportunity to increase their earnings.
Contemporary reasons given by organizations for implementing incentive plans are:
improving or maintaining high levels of productivity. focusing employee efforts on specific performance targets. linking compensation rewards to the achievement of results. all of the above.
Group incentive plans include:
Improshare
When the determination of a bonus includes both production employees and nonproduction employees and this bonus is based on overall group productivity, which type of gainsharing program is being used?
Improshare
A grant of units equal in value to fair market value or book value of a share of stock is known as:
phantom stock.
The most widely used sales incentive program is the _____ plan.
combined salary and commission
Which of the following is NOT one of the simple rules for maintaining motivation among professionals?
Eliminate autonomy in work
Which of the following is NOT a reason for variable pay plans to not achieve their proposed objectives or lead to organizational improvements?
Employment of employee and management committees to gain cost-reduction improvements
According to Sammer, which of the following is NOT a characteristic of a successful incentive plan?
Find technically detailed, quantitative, and extremely thorough payout formulas.
_____ describes the design of individual incentive plans.
Flexibility
Which of the following is NOT an advantage of an incentive pay program?
Incentives are a way to distribute success among those not responsible for producing that success.
Performance of sales people can be affected by all of the following external factors EXCEPT:
changes in the sales volume standard.
The standard time for producing one unit of work in a job paying $12.75 per hour was set at twelve minutes. The piece rate would be ____ per unit.
$2.55
More than _____ of companies globally are offering variable pay programs.
80 percent
Which of the following is an individual type of incentive plan?
Lump sum merit pay
_____ are individuals between the ages of 25 and 41 who value a balanced lifestyle of work and play.
Members of Generation X
When computing executive pay, many organizations are tying _____ to traditional financial gauges.
balanced scorecards
Noncash incentive rewards are most effective as motivators when the award is:
combined with a meaningful employee recognition program.
The success of the Lincoln Electric Company profit-sharing plan rests largely on:
contributions by employees.
If an employee's pay is based not on the actual amount of time it takes him or her to complete a job but instead on a predetermined amount of time for completing the job, he or she is working under the _____.
piece rate plan
An appropriate reward for a consumer service representative who worked long hours to fill a new customer's large order is a:
spot bonus.
A cash or stock award determined by increase in stock price during any time chosen by the executive in the option period, which does not require executive financing is known as:
stock appreciation rights.
The use of _____ is a popular and prevalent method used in different industries for motivating and compensating hourly, salaried, and executive personnel.
stock options
When employees receive a certain rate for each unit produced, they are working under the _____ incentive plan.
straight piecework
A sales incentive plan that permits salespeople to be paid for performing various duties not reflected immediately in their sales volume is known as a:
straight salary plan.
