MGMT 3374 Ch.10 Part 2

Compensation committees justify large executive compensation packages for all of the following reasons EXCEPT:

the pay gap between CEO and employees builds credibility

ESOPs can qualify as tax-exempt employee trusts under section ____ of the Internal Revenue Code

401(k)

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

Compensation specialists recognize all the following generations of employees except

Synthesizers

The success of the Lincoln Electric Company profit-sharing plan rests largely on:

contributions by employees

Profit sharing refers to any procedure by which an employer pays employees:

current or deferred sums based on the organization's financial performance

Team incentive bonuses may be paid out in all of the following EXCEPT:

distributed on the basis of individual performance appraisal

Disadvantages of profit sharing include all of the following except:

effective profit-sharing plans require a second HR program

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:

motivate a total commitment to the organization as a whole.

According to one budget survey, what percentage of reporting organizations use variable pay?

80

A major problem of ESOPs is that

ESOPs place employees' pensions at risk because they are tied to the market performance of the organization.

A popular and prevalent method used in many different industries for motivating and compensating hourly, salaried, and executive personnel is:

Stock options

Management should guard against incentive payments being seen as ___________

an entitlement

Which of the following is NOT an executive long-term incentive program?

assigned benefits

The most widely used sales incentive program is the ____________________ plan

combined salary and commission

Noncash incentive rewards are most effective as motivators when the award:

is combined with a meaningful employee recognition program

Which of the following is an individual type of incentive plan?

lump sum merit pay

A problem with creating team incentive plans is:

not all teams are alike

Special benefits given to executive employees, such as assigned chauffeurs, country club membership, and special vacation policies, known as:

perquisities

Group incentive plans do all of the following EXCEPT:

reduce free-ride effect

AS early as 1984 management guru Peter F. Drucker argued that CEO pay had ________.

rocketed out of control

Common output measures for productivity include:

sales

Long-term incentive plans in which rights are granted to executives to purchases shares of their company's stock at a fixed price for a fixed period of time are known as:

stock options

Which plan provides opportunities for executives to purchase shares of their organization's stock valued at full market or a discounted price?

stock purchase

The gainsharing plan that has as its most significant feature effective employee participation on through committee representation is:

the Scanlon plan

A major concern of executive compensation involves:

the amount of compensation

Advantages of ESOPs include all of the following except:

the employees' pensions are less vulnerable due to diversification.