Comp Chapter 9

There is evidence that every ___ increase in the bonus paid to employees yields a 1.5% increase in ROA to the Firm

10%

research suggests that for employees to notice and work hard to perform behaviors desired by the org, incentives need to be

15-20%

which theories would support a higher min wage?

Maslow and Herzberg's two factor

when developing a flexible compensation system,____ would be most useful

Maslow's theory and herzberg's theory

best supports a culture of flexibility and innovation

a strong commitment to job security

The most obvious sorting factor is

ability

a key factor in increasing trust in top mgmt is an

acceptable appraisal system

in Maslow's theory, incentive pay is motivating if it helps an employe gain sense of (3)

achievement, recognition, or approval

____ argues that performance-based pay is best for complex jobs where monitoring employee performance is difficult

agency theory

Herzberg's two-factor theory contends that success-sharing plans will be motivating but ___ will be de-motivating

at risk plans

the key ingredient in cafeteria-style compensation is ____ to make sure the dollar cost of the package an employee selects meets employer budgetary limits

careful cost analysis

which among the following components of a reward system is a dimension of empowerment

control

the motivation triangle includes

culture

the amount of fairness given to employees refers to

distributive justice

as per the ____, relative pay is important as employees evaluate their pay-effort balance in comparison to other employees

equity theory

line of sight is an important pay implication for which theory or theories

expectancy and goal setting

according to ____ of motivation theory, it is important for orgs to pay attention to the training and development needs of their employees

expectancy theory

theories dealing with exchange include (3)

expectancy, equity, and agency

according to expectancy theory, effort level depends on (3)

expectancy, valence, and instrumentality

T/F: In the formula (behavior= f (M,A, E)), M standards monetary incentives

false

T/F: additional authority, control and autonomy are always positively motivating job factors for workers

false

T/F: agency theory argues that employees prefer risky pay since rewards can be greater than a salary

false

T/F: an individual incentive pay system is associated with high turnover of high performers

false

T/F: blue-collar workers feel pay increases should be based upon performance

false

T/F: cafeteria-style compensation is based on the idea that the organization knows that package of rewards would best suit individual employees' needs

false

T/F: companies are moving back to entitlement oriented pay to reduce turnover

false

T/F: gain sharing poses greater risk to individual employees than profit sharing

false

T/F: generally, team-based incentives are more attractive than individual incentives

false

T/F: goal setting theory argues that employees performance is maximized when performance targets are stated as "do your very best"

false

T/F: identifying desired behaviors is the emphasis of agency theory

false

T/F: in today's orgs, socialization, culture, and training rather than compensation packages are typically used to direct employees to desired behaviors

false

T/F: incentive pay systems are an effective way to motivate workers to perform a variety of tasks in changing situations

false

T/F: lump-sum bonuses have less risk for workers than merit pay

false

T/F: managers have more control over distributive justice than procedural justice

false

growing evidence suggests that the major effect of skill based pay is

high quality products

when moving from an individual to a group incentive plan, you would expect

high turnover from high performers

_____ is the belief that when a specified level of job performance is attained, the employee will receive a specified reward

instrumentality

compared to other incentive plans, ___ is lowest in profit sharing

line of sight

when an org's performance has regular and large swings and individual performance is unclear and hard to measure, the most effective compensation mix is to offer base pay with

low incentives and a variety of rewards

a person with ____ is likely to seek a large, decentralized org with little performance based pay

low self-esteem

a ____ bonus requires annually "re-earning" the added pay

lump sum

____ is an individual level form of performance pay

lump sum bonus

compensations should reinforce attracting and hiring good employees, entourage skill development and ____

motivate high job performance

the key to designing a pay for performance system rests on standards. Specifically, managers need to be concerned with the (4)

objectives, measures, eligibility, and funding

when employee performance is easily measured and the org's performance is fairly stable over time, the most effective type of compensation is to

offer monetary rewards with large incentives

motivation involves identifying what is important to a person and

offering it to them in exchange for some desired behavior

the primary guiding force that determines needed employee behaviors is

organization strategy

available evidence indicates managers believe the most important factor for pay increases is

performance

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

T/F: Line of sight means that employees believe they can influence performance targets

true

T/F: Malsow's theory suggests that performance-based pay can be de-motivating

true

T/F: When pay raises are based on events over which employees lack significant control, they are likely to regard the system as unfair

true

T/F: a problem with incentive pay plans is workers focus exclusively on behaviors that are rewarded

true

T/F: according to agency theory, because employees prefer a salary, they demand higher total pay if performance-based pay is used

true

T/F: an important implication of reinforcement theory is that when employees receive pay is important

true

T/F: both pay level and pay system characteristics affects applicants decisions to accept a job

true

T/F: eligibility refers to who in the org may participate in an incentive pay program

true

T/F: evidence suggests that skill-based pay may not increase productivity

true

T/F: incentive effect means pay can motivate people to perform better

true

T/F: line of sight is highest in individual incentive plans

true

T/F: many employees are not satisfied with compensation at risk plans because they do not understand the process used to determine their pay

true

T/F: more companies are using pay based upon individual, group and org performance; workers with high security needs may accept lower pay for pay security; and workers may need higher pay to stay and perform in an at risk pay company

true

T/F: risk-sharing plans include a provision for cuts in base pay that are only recaptured in years when the org meets performance objectives

true

T/F: security in terms of compensation refers to the predictability of one's paycheck from one time to another

true

T/F: the point of behavior = f (M,A,E) model is that, though very important, compensation alone cannot change employee behavior.

true

T/F: work load and variety are both components of a total reward system

true

___ tends to be highest among poor performers

turnover