HRM CH 10

One word, _ , describes the design of individual incentive plans

flexibility

Variable Pay

Tying pay to some measure of individual, group or organization performance

Straight commission plan

A compensation plan based on a percentage of sales

Team incentive plan

A compensation plan in which all team members receive an incentive bonus payment when production or service standards are met or exceeded

Combined salary and commission plan

A compensation plan that includes a straight salary and a commission

Salary plus bonus plan

A compensation plan that pays a salary plus a bonus achieved by reaching targeted sales goals

Straight salary plan

A compensation plan that permits salespeople to be paid for performing various duties that are not reflected immediately in their sales volume

Differential piece rate

A compensation rate under which employees whose production exceeds the standard amount of output receive a higher rate for all of their work than the rate paid to those who do not exceed the standard amount

Improshare

A gainsharing program under which bonuses are based on the overall productivity of the work team

Bonus

An incentive payment that is supplemental to the base wage

Standard hour plan

An incentive plan that sets rates based on the completion of a job in a predetermined standard time

Straight Piecework

An incentive plan under which employees receive a certain rate for each unit produced

Spot bonus

An unplanned bonus given for employee effort unrelated to an established performance measure

Profit sharing

Any procedure by which an employer pays, or makes available to all regular employees, in addition to base pay, special current or deferred sums based on the profits of the enterprise

When computing executive pay, _ link operational yardsticks to traditional gauges

Balanced scorecards

The philosophy behind the Scanlon Plan is that:

Employees should make suggestions to improve performance and be rewarded for their contributions

Merit Guidelines

Guidelines for awarding merit raises that are tied to performance objectives

Which of the following is an advantage of an incentive pay program?

Incentives focus employee efforts on specific performance targets, incentives are a way to increase equity and justice in an organization, incentives are a means to reward or attract top performers when salary budgets are low

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

Gainsharing plans

Programs under which both employees and the organization share financial gains according to a predetermined formula that reflects improved productivity and profitability

An incentive given for a special employee contribution not directly tied to a performance standard is:

a spot bonus

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

Rate busting refers to:

an increase in output that results in the disapproval of fellow employees

The purpose of a profit sharing plan is to:

motivate a total commitment to the organization as a whole

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

perquisites

Employee Stock ownership plan (ESOP)

stock plans in which an organization contributes shares of its stock to an established trust for the purpose of stock purchases by its employees