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Which of the following is a method where a combination of performance measures directed toward the company's long- and short-term goals are used as the basis for awarding incentive pay?


A) merit pay
B) profit sharing
C) gainsharing
D) balanced scorecard
E) Scanlon plan

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The balanced-scorecard approach should be avoided while designing executive pay.

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Which of the following types of incentive plans are used to reward individual performance?


A) gainsharing
B) merit pay
C) Scanlon plan
D) profit sharing
E) stock ownership

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Which of the following incentive plans are specifically designed to promote group performance?


A) performance bonuses
B) gainsharing
C) standard hour plans
D) merit pay
E) commissions

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Under incentive pay,piecework rates are most suited for routine,standardized jobs with output that is easy to measure.

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A pay structure specifically designed to energize,direct,or control employees' behavior is known as


A) monthly salary.
B) wage.
C) incentive pay.
D) annual salary.
E) fixed pay.

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_____ occurs when a date or price in a stock option agreement is changed so that the option holder can buy shares at a bargain price.


A) "Backdating"
B) "Option revising"
C) "Retro-vising"
D) "Adjusting"
E) "Rechecking"

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Most pay-related communications come through


A) the company newsletter.
B) one designated company speaker.
C) rumors between employees from various departments.
D) an employee's annual review.
E) individual discussions between employees and their supervisor.

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QVO Financial,an auditing firm,distributes a portion of the profits resulting from improvements in productivity and efficiency among its employees.If the company enjoys an improvement of $45,000,60% of the improvement is the company's share.The other 40% is distributed among the employees in the company.Which of the following is being exemplified in this scenario?


A) profit rate
B) gainsharing
C) commission sharing
D) merit gain
E) group bonus

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As an incentive to work efficiently,some organizations pay production workers _____,a wage based on the amount they produce.


A) merit pay
B) a sales commission
C) standard hour pay
D) a piecework rate
E) a special bonus

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The CEO of Logiworks asked the human resource manager,April,to propose an approach to incentive pay.April proposes that the company create a gainsharing plan.What action(s) by the company will best increase the likelihood that gainsharing will succeed?


A) hiring employees who prefer to work alone and equipping them with cost data
B) sharing data about costs and setting up time for employees to interact
C) indicating that failure to achieve goals will lead to job cuts
D) using incentive pay as a substitute for goal setting and performance standards
E) promoting continuous improvement and limiting time spent on personal interactions

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Token Inc.is an envelope manufacturer based in Dallas.The employees of the organization receive pay based on the amount of work produced.If the output of an employee is more than the average production volume,then the organization pays more for the work performed.In this case,which of the following incentives is offered by Token Inc.?


A) differential piecework rate
B) minimum wage
C) merit pay
D) retention bonus
E) group bonus

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An organization should keep information,such as changes made to its incentive plan,confidential from its employees.

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Maria,the financial officer at Boone & Borowitz,encourages the human resource manager to consider using stock options as incentive pay for all employees.The human resource manager cautions that employees could become upset if the options don't turn out to be as valuable as cash.Which of the following statements supports this concern?


A) Stock options are not profitable to employees.
B) Option owners must exercise the options,no matter what the market price.
C) Employees may not purchase their employer's stock.
D) Offering stock options discourages employees from thinking like owners.
E) Stock prices in the market may fall below the exercise price of the options.

Correct Answer

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Deep Space Aeronautics is developing a profit-sharing plan.Randy,the human resource manager,assumes the employees are excited to participate in this start-up company's success.However,a supervisor tells Randy about anxiety surrounding a rumor that employees will lose money if the company has a bad year.How should Randy address this problem with employee morale?


A) by recalling that employees are also motivated by factors other than pay
B) by removing non-management employees from the team designing the incentive plan
C) by conducting meetings to teach about profit sharing and how employees will benefit
D) by reminding employees that rumors are against company policy
E) by shutting down the company's intranet to prevent further spreading of rumors

Correct Answer

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Kelltech Inc.is a sales and marketing company based in Baltimore.It wants to combine the advantages of different incentive-pay plans and help employees understand the organization's goals.Which of the following will help the company accomplish this goal?


A) the Scanlon plan
B) a balanced scorecard
C) a dashboard
D) an employee stock ownership plan
E) a differential piece rate system

Correct Answer

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A feature of an effective incentive pay plan is that it should


A) have performance measures based on employees' requirements.
B) not be provided as a direct percentage of employees' performance.
C) encourage group performance and sideline individual achievements.
D) be the same for all employees in the organization.
E) have performance measures linked to the organization's goals.

Correct Answer

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Which of the following is an organization-level incentive plan that is intended to motivate employees to align their activities with the organization's goals?


A) profit sharing
B) gainsharing
C) merit pay
D) group bonus
E) Scanlon plan

Correct Answer

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Employee stock ownership plans (ESOPs) are attractive to employers.Along with tax and financing advantages,ESOPs give employers a way to build pride in and commitment to the organization.Which of the following statements weakens this argument?


A) Employees are not allowed to participate in general body meetings as shareholders.
B) The stocks within the trust are too widely diversified to earn high returns.
C) The stock earnings are taxed at high rates.
D) Employees are forced to return the stock profits to the organization.
E) Risks involved will directly affect employees' retirement income.

Correct Answer

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Which of the following statements is true of a performance bonus?


A) It is designed to reward group performance.
B) It should be re-earned by employees during each performance period.
C) It is rolled into base pay and provided yearly or monthly.
D) It lacks flexibility and hence it is less popular.
E) It is exclusively linked to subjective ratings,rather than objective performance measures.

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