Question 1

When the team developing the XLR at Robix brought it in under budget, team members received a bonus. The amount each individual received varied based on salary level. In this situation, the team bonus was paid out in proportion to their relative contribution to the team.

Accepted Answer

A) True 
 B)False  False

Question 2

Executive compensation consists of all of the following EXCEPT

Accepted Answer

A)  base salary.
B)  proficiency adjustments.
C)  perquisites.
D)  short-term incentives.E) C) and D)
F) A) and B)

Question 3

The performance threshold in incentive plans is the name given to the amount awarded to an employer.

Accepted Answer

A) True 
 B)False

Question 4

Employees on the XL27 production line at Robix whose work exceeds a standard level of output receive a higher rate of pay than those whose work meets the standard. They are working under the __________ incentive plan.

Accepted Answer

A)  differential piece rate
B)  standard piece rate
C)  exception bonus rate
D)  individual rate payE) B) and C)
F) A) and D)

Question 5

The salespeople at Robix are compensated under a straight commission plan. Because their compensation rate is not fixed, one way to help them avoid any personal cash flow problems is to allow them a salary draw.

Accepted Answer

A) True 
 B)False

Question 6

Fixed pay is more flexible than variable pay.

Accepted Answer

A) True 
 B)False

Question 7

Robix uses an incentive payout that is based upon increases in sales volume. Robix is using a Scanlon plan.

Accepted Answer

A) True 
 B)False  False

Question 8

The straight commission plan is limited by all of the following disadvantages EXCEPT that

Accepted Answer

A)  salespeople will stress low-priced products.
B)  customer service after the sale is likely to be neglected.
C)  earnings tend to fluctuate widely between good and poor periods of business.
D)  salespeople are tempted to grant price concessions.E) A) and B)
F) A) and C) A

Question 9

Robix wants to increase employee job satisfaction and improve customer awareness. One way they could accomplish this is by instituting a gainsharing plan.

Accepted Answer

A) True 
 B)False

Question 10

Employees on the production line at Robix are paid based on the number of units that roll off their line each day. Because they receive a specified payment for each unit, they are paid under a straight piecework program.

Accepted Answer

A) True 
 B)False

Question 11

Executive base salaries represent between __________ percent of the total annual compensation.

Accepted Answer

A)  10 and 20
B)  20 and 30
C)  30 and 40
D)  40 and 50E) A) and C)
F) A) and D)

Question 12

Discuss the advantages of incentive pay programs.

Accepted Answer

The advantages of incentive pay programs...

Question 13

In most profit-sharing plans, about __________ of the net profit is shared.

Accepted Answer

A)  5 to 10 percent
B)  10 to 15 percent
C)  15 to 20 percent
D)  20 to 25 percentE) A) and B)
F) C) and D)

Question 14

Robix wants to be known as a leader in first-to-market for new technology, so employees are rewarded for the speed by which they develop new products. Their incentive plan is tied to an organizational goal.

Accepted Answer

A) True 
 B)False

Question 15

The disadvantages of profit sharing include all of the following EXCEPT that

Accepted Answer

A)  payments may lose their motivational value as they are made only once a year.
B)  plans may not pay off for several years in a row.
C)  effective profit sharing plans require a second HR program.
D)  employee morale could drop during time periods after no bonus has been given.E) A) and C)
F) A) and B)

Question 16

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

Accepted Answer

A)  contributions by employees.
B)  objective standards.
C)  comparison data between departments.
D)  economics of the review period.E) C) and D)
F) B) and D)

Question 17

A weakness of profit-sharing plans is that employees do not have total control over the profitability of an organization.

Accepted Answer

A) True 
 B)False

Question 18

The most widely used sales incentive program is the __________ plan.

Accepted Answer

A)  straight salary
B)  straight commission
C)  combined salary and commission
D)  commission plus bonusE) A) and B)
F) A) and C)

Question 19

To minimize the problems of merit raises, organizations should use

Accepted Answer

A)  labor market comparisons.
B)  employee input.
C)  merit guidelines.
D)  the opinions of several managers.E) B) and D)
F) All of the above

Question 20

The advantages of employee stock ownership plans include all of the following EXCEPT that

Accepted Answer

A)  employers are able to provide retirement benefits to employees at a relatively low cost.
B)  employees' pensions are less vulnerable due to diversification.
C)  employee stock ownership plans can increase employees' pride of ownership.
D)  employee stock ownership plans can provide an incentive for employees to increase productivity.E) B) and D)
F) B) and C)

Exam 10: Pay-For-Performance: Incentive Rewards

When the team developing the XLR at Robix brought it in under budget, team members received a bonus. The amount each individual received varied based on salary level. In this situation, the team bonus was paid out in proportion to their relative contribution to the team.

Correct AnswerverifiedFalse

Executive compensation consists of all of the following EXCEPT

Correct AnswerverifiedShow Answer

The performance threshold in incentive plans is the name given to the amount awarded to an employer.

Correct AnswerverifiedShow Answer

Employees on the XL27 production line at Robix whose work exceeds a standard level of output receive a higher rate of pay than those whose work meets the standard. They are working under the __________ incentive plan.

Correct AnswerverifiedShow Answer

The salespeople at Robix are compensated under a straight commission plan. Because their compensation rate is not fixed, one way to help them avoid any personal cash flow problems is to allow them a salary draw.

Correct AnswerverifiedShow Answer

Fixed pay is more flexible than variable pay.

Correct AnswerverifiedShow Answer

Robix uses an incentive payout that is based upon increases in sales volume. Robix is using a Scanlon plan.

Correct AnswerverifiedFalse

The straight commission plan is limited by all of the following disadvantages EXCEPT that

Correct AnswerverifiedA

Robix wants to increase employee job satisfaction and improve customer awareness. One way they could accomplish this is by instituting a gainsharing plan.

Correct AnswerverifiedShow Answer

Employees on the production line at Robix are paid based on the number of units that roll off their line each day. Because they receive a specified payment for each unit, they are paid under a straight piecework program.

Correct AnswerverifiedShow Answer

Executive base salaries represent between __________ percent of the total annual compensation.

Correct AnswerverifiedShow Answer

Discuss the advantages of incentive pay programs.

Correct AnswerverifiedThe advantages of incentive pay programs...View AnswerShow Answer

In most profit-sharing plans, about __________ of the net profit is shared.

Correct AnswerverifiedShow Answer

Robix wants to be known as a leader in first-to-market for new technology, so employees are rewarded for the speed by which they develop new products. Their incentive plan is tied to an organizational goal.

Correct AnswerverifiedShow Answer

The disadvantages of profit sharing include all of the following EXCEPT that

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A weakness of profit-sharing plans is that employees do not have total control over the profitability of an organization.

Correct AnswerverifiedShow Answer

The most widely used sales incentive program is the __________ plan.

Correct AnswerverifiedShow Answer

To minimize the problems of merit raises, organizations should use

Correct AnswerverifiedShow Answer

The advantages of employee stock ownership plans include all of the following EXCEPT that

Correct AnswerverifiedShow Answer

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False

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False

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The advantages of incentive pay programs...
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