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