Deck 12: Incentive Pay

Question 1

With the introduction of an individual incentive program,Aleksander feels like he is competing with the other members of his team instead of working together with them.While the individual incentive plan could mean more money for some members of the team,most members of the team feel the same way Aleksander does.They wish they could go back to working together for a group incentive.Which disadvantage of individual incentives does this illustrate?

A) Many jobs have no direct output.
B) Individual incentives may motivate undesirable employee behaviors.
C) The record-keeping burden needed for individual incentives is high.
D) Individual incentives may not fit organizational culture.

Answer 1

D

Question 2

When she is not working,Sugi trains to run marathons.She wishes she had more time to travel to various races but work keeps her busy.Kevin does not want time off work.He needs to earn as much overtime as possible to pay off his college loans.The company recently offered either a week's pay or a week off as the bonus to the salesperson who made the most sales.Both Sugi and Marcus worked hard to win.Which advantage of individual incentives does this illustrate?

A) They make it easy to evaluate individual employees.
B) They offer the ability to match rewards to employee desires.
C) They promote the link between performance and results.
D) They may motivate less productive employees to work harder.

Answer 2

B

Question 3

At the beginning of the quarter,Mohammed sat down with his manager and set three goals for the next 3 months.The achievement of each goal will depend on Mohammed.No one else in his work group can affect the work toward the goal.Which advantage of individual incentives does this illustrate?

A) They make it easy to evaluate employee's effect on team.
B) They offer the ability to match rewards to employee desires.
C) They promote the link between performance and results.
D) They may motivate less productive employees to work harder.

Answer 3

C

Question 4

Naoyuki is a surgical technologist at a hospital.His job involves helping out during surgeries.Among other things,he hands supplies to surgeons and surgeons' assistants,holds retractors and other instruments,and performs various tasks requested by the surgeon.An individual bonus plan would not work for Naoyuki because of which disadvantage of individual incentives?

A) Many jobs have no direct output.
B) Individual incentives may motivate undesirable employee behaviors.
C) The record-keeping burden needed for individual incentives is high.
D) Individual incentives may not fit organizational culture.

Question 5

If rewards are distributed based on personal performance levels,a perception of ______ can be created if managers don't make clear why some are provided with greater incentives than others.

A) fairness
B) merit
C) variableness
D) favoritism

Question 6

With ______,an organization is rewarding employees for past performance,but are doing it in the hope that employees will want similar rewards in the future and therefore will repeat the desired behaviors.

A) entitlement
B) incentives
C) salaries
D) overtime

Question 7

Sara has been slacking at work.At the beginning of the quarter,Sara sits down with her manager and sets three goals.If Sara achieves those three goals in the next three months,she will receive a $1,000 bonus.Which advantage of individual incentives does this illustrate?

A) They make it easy to evaluate individual employees.
B) They offer the ability to match rewards to employee desires.
C) They promote the link between performance and results.
D) They may motivate less productive employees to work harder.

Question 8

Individual incentive plans require that managers keep track of individual efforts and are much more ______-intensive than group incentives.

A) rate
B) time
C) pay
D) social

Question 9

With the introduction of an individual incentive program,Caitlin has begun spending an hour each day documenting her employees' outcomes.Which disadvantage of individual incentives does this illustrate?

A) Many jobs have no direct output.
B) Individual incentives may motivate undesirable employee behaviors.
C) The record-keeping burden needed for individual incentives is high.
D) Individual incentives may not fit organizational culture.

Question 10

______ pay must target the strategic goals of the organization to be beneficial.

A) Incentive
B) Rate
C) Bonus
D) Entitlement

Question 11

In compensation,______ moves some of the risk associated with having employees from the firm to the individual.

A) a rate range
B) salaries
C) variable pay
D) entitlement

Question 12

______ incentives reinforce performance of a single person with a reward that is significant to that person.

A) Group
B) Individual
C) Lateral
D) Structural

Question 13

It may be very difficult or even impossible in some jobs to identify ______ output on which managers can base an incentive.

A) bonus
B) individual
C) merit
D) social

Question 14

______ allow managers to vary the reward given employees based on the individual (or group)effort put into the work process.

A) Incentives
B) Entitlement
C) Pay structure
D) Rate range

Question 15

Much fanfare was made about Quon's latest bonus in the office.He has always been a high performer.However,this year he received an extra-large bonus.His coworker Hannah got a little tired of hearing about Quon's bonus and decided that next year she would win some of the bonus money.Which advantage of individual incentives does this illustrate?

A) They make it easy to evaluate individual employees.
B) They offer the ability to match rewards to employee desires.
C) They promote the link between performance and results.
D) They may motivate less productive employees to work harder.

Question 16

As a product promoter,Emilia receives a commission on every sale made as a result of her presentations.However,part of her job also is to keep the area around her display neat and to return the items she promotes to their correct locations following demonstrations.Since Emilia does not get a bonus for cleaning up,she leaves her area messy and does not put away items following demonstrations.Which disadvantage of individual incentives does this illustrate?

A) Many jobs have no direct output.
B) Individual incentives may motivate undesirable employee behaviors.
C) The record-keeping burden needed for individual incentives is high.
D) Individual incentives may not fit organizational culture.

Question 17

Rajiv offered his team a bonus if the team completes the project 1 week ahead of time.Rajiv is using ______ as an incentive

A) piecework plan
B) variable pay
C) commission
D) profit sharing

Question 18

______ is compensation that depends on some measure of performance or results in order to be awarded.

A) Entitlement
B) Variable pay
C) Salary
D) Benefit pay

Question 19

The use of pay for ______ rather than hours worked is the trend today.

A) performance
B) skills
C) entitlement
D) ability

Question 20

Employees may focus only on the items that are being measured for ______ payments,ignoring other important tasks.

A) incentive
B) variable
C) group
D) rate

Question 21

Social loafers ______.

A) give 100% both individually and in a group setting
B) are shy and reserved in company social settings
C) strive to be recognized as an outstanding performer in a group setting
D) avoid exerting maximum effort in group settings because it is difficult to pick out individual performance

Question 22

When it comes to group incentives,______ may be able to stay hidden within the group while allowing others to do the majority of the group work.

A) social loafers
B) golden parachutes
C) perquisites
D) merits

Question 23

Manuela wants to provide an incentive program to reinforce the collective actions of all of her subordinates in the returns department team.In other words,Manuela would like to begin a(n)______ program.

A) variable incentive
B) executive incentive
C) individual incentive
D) group incentive

Question 24

Andrew showed up to every team meeting late and did not complete his part of the project.The rest of the team had to pick up the slack to complete the project on time.Despite his lack of contribution,Andrew received the same group incentive as everyone else on the team.This illustrates which disadvantage of group incentives?

A) Social loafing may occur.
B) Individual output may be discounted.
C) Outstanding performers may slacken efforts.
D) Group infighting may arise.

Question 25

______ incentives provide reinforcement for actions of more than one individual within the organization.

A) Individual
B) Group
C) Cultural
D) Structural

Question 26

One advantage of a(n)______ is that it broadens individual outlook.

A) group incentive
B) executive incentive
C) individual incentive
D) professional incentive

Question 27

As a salesperson,Harold is paid based on a percentage of the value of the products and services he sells.In other words,he is paid on a ______ basis.

A) bonus
B) base pay
C) value pay
D) commission

Question 28

One risk with a ______ as an incentive is in allowing it to become a time-based entitlement instead of a performance incentive.

A) perquisite
B) bonus
C) merit
D) wage

Question 29

Carol was recently put on a team to develop a new product for Acme Global.Because there are so many people on the team,Carol thinks no one will notice if she does not participate or do any work for the team.Carol is a(n)______.

A) social loafer
B) golden parachute
C) individual performer
D) merit seeker

Question 30

For every $1,000 of widgets Tanner sells,he receives a ______ of 10%,or $100.

A) bonus
B) commission
C) merit pay
D) piecework

Question 31

Jacob sat down with his supervisor at the beginning of the quarter and set a goal to reduce defects on the assembly line from 5% to 2%.If he achieves this goal by the end of the quarter,he will receive a ______ of $4,000.

A) bonus
B) commissions
C) merit pay
D) piecework

Question 32

Nadia always completed her work ahead of schedule.She was known as a fast and accurate worker.When group incentives were initiated,the rest of her work team could not keep pace with Nadia.Many members of the team told Nadia to stop making them look bad.Eventually,Nadia matched her work pace to the rest of the team.This illustrates which disadvantage of group incentives?

A) Social loafing may occur.
B) Individual output may be discounted.
C) Outstanding performers may slacken efforts.
D) Group infighting may arise.

Question 33

Now that his team is working toward a group incentive,Steven does not leave work early or take long lunches.He feels that doing so would let down his group members.He has started working harder and slacking off less to help make the group successful.This illustrates which advantage of group incentives?

A) They promote better teamwork.
B) They broaden individual outlook.
C) They require less supervision.
D) They are easier to develop than individual incentive programs.

Question 34

In order for a(n)______ incentive program to work,it must provide a significant incentive to the salesperson to be successful in selling and provide a disincentive to make a harmful "quick sale."

A) commission
B) bonus
C) merit
D) entitlement

Question 35

A(n)______ is a payment typically provided to a salesperson for selling an item to a customer and is usually paid as a percentage of the price of the item that is sold.

A) bonus
B) merit
C) entitlement
D) commission

Question 36

In compensation,a ______ is a lump sum payment,typically given to an individual at the end of a time period.

A) bonus
B) merit
C) perquisites
D) variable pay

Question 37

Ever since the organization began a group incentive program,John has noticed that his team appears more loyal to one another than they were before the group incentive program began.This illustrates which advantage of group incentives?

A) They promote better teamwork.
B) They broaden individual outlook.
C) They require less supervision.
D) They are easier to develop than individual incentive programs.

Question 38

A program to reward top performers with increases in their annual wage that carry over from year to year is called ______ pay.

A) bonus
B) entitlement
C) merit
D) profit

Question 39

Now that his team is working toward a group incentive,Matteo is paying more attention to what others in the organization do and how their actions affect his group.This illustrates which advantage of group incentives?

A) They promote better teamwork.
B) They broaden individual outlook.
C) They require less supervision.
D) They are easier to develop than individual incentive programs.

Question 40

______ avoid providing their maximum effort in group settings because it is difficult to pick out individual performance.

A) Golden parachutes
B) Social loafers
C) Perquisites
D) Merits

Question 41

In a ______ compensation plan,each task is assigned a normal amount of work time for completion.

A) straight piece-rate
B) standard-hour
C) differential piece-rate
D) merit

Question 42

In compensation,______ programs provide a portion of company proceeds over a specific period of time to the employees of the firm through a bonus payment.

A) bonus sharing
B) praise sharing
C) merit sharing
D) profit sharing

Question 43

Piecework or piece-rate plans are one of the ______ forms of compensation,and they can act as an incentive to produce at a higher level because the more workers produce,the more they get paid.

A) hardest
B) simplest
C) most complex
D) nonused

Question 44

In Step 3 of the Giving Praise Model,the person giving the praise is silent.This silence is intended to give the employee being praised ______.

A) time to thank the person giving the praise
B) the opportunity to point out others who shared in the praised behavior
C) the chance to "feel" the impact of the praise
D) time to think about how the employee can repeat the behavior

Question 45

Terry is applying the Giving Praise Model to Yael.She has told Yael exactly which behavior is being praised,why that behavior was important,and she has given Yael the opportunity to absorb the information.Her next step is to ______.

A) tell Yael to get back to work
B) give Yael a bonus check
C) encourage repeat performance
D) let Yael thank her for the praise

Question 46

Acme Global announced that it had a $1 million pool available for pay increases this year.Top performers will receive larger raises than others.Lindsey was a top performer and hopes to get a 10% ______.

A) bonus
B) commissions
C) merit increase
D) piecework

Question 47

In Step 1 of the Giving Praise Model,the employee being praised is ______.

A) given an explanation of what they did right and why it was important
B) told exactly what was done correctly
C) given a general statement like "good job on that sale"
D) given a reason to repeat the performance

Question 48

Carla provides service certificates to employees in her department who provide exemplary service without being asked.This represents ______ as a nonmonetary incentive.

A) recognition
B) standard hour plan
C) ESOP
D) piece-rate plan

Question 49

______ is probably the most powerful,simplest,least costly,and yet most underused motivational incentive there is.

A) Praise
B) Pay
C) Bonus
D) Entitlement

Question 50

Angelique is paid a flat rate of $2 per pair of pants that she sews at work.She is being paid under a ______ system.

A) bonus rate
B) merit pay
C) differential piece-rate
D) straight piece-rate

Question 51

Larry produced 40 pressed inner fenders out of sheet metal per hour and got paid $24 per hour ($0.60 × 40).Michelle only produced 30 inner fenders per hour and got paid $18.00 ($0.60 × 30).Larry and Michelle are working under a ______ system.

A) commission
B) merit pay
C) straight piece-rate
D) differential piece-rate

Question 52

Under her organization's ______ plan,Nicole is paid for each widget she produces.

A) bonus
B) commission
C) merit pay
D) piecework

Question 53

The biggest challenge with ______ compensation plans is creating the manuals showing the allowable time for a job.

A) standard hour
B) straight piece-rate
C) differential piece-rate
D) timed

Question 54

For ______ pay to be valuable as an incentive,it typically must be more than 1% of the employee's pay.

A) merit
B) bonus
C) social
D) range

Question 55

At the end of each year,Acme Global's ______ program pays a portion of company proceeds to the employees of the company as a bonus payment.

A) profit sharing
B) gainsharing
C) employee stock ownership plan
D) stock option

Question 56

Omri worked 40 hr this week but was paid for 45 hr because that's how long the work normally takes.Omri is paid under a ______ plan.

A) bonus
B) commission
C) merit pay
D) standard hour

Question 57

Gainsharing is similar to ______ because in each case,the gain is shared with the employees who helped to create the gain.

A) commission
B) profit sharing
C) merit pay
D) bonus

Question 58

When the manufacturing department cut waste by 10%,the organization paid each member of the department $500 (a portion of the savings)as a part of the organization's ______ program.

A) profit sharing
B) gainsharing
C) employee stock ownership plan
D) stock option

Question 59

A form of compensation,a(n)______ makes employee part owners of the organization.

A) commission pay plan
B) employee stock ownership plan
C) merit pay plan
D) variable pay plan

Question 60

In Step 2 of the Giving Praise Model,the employee being praised is told ______.

A) what their reward will be
B) how the supervisor learned about the performance
C) why the praised behavior is important
D) a reason to repeat the performance

Question 61

______ theory suggests that manager will act in the way that provides the most benefit to them and not the owners of the organization,unless they are provided with incentives to act in ways that help the owners of the organization.

A) Variable
B) Executive
C) Agency
D) Loafer

Question 62

______ are usually offered to an individual employee to allow them to buy a certain number of shares of stock in the company at a specified point in the future at a certain price.

A) Variable pay
B) Gainshares
C) Social loafers
D) Stock options

Question 63

Incentives need to be clearly separated from base pay to avoid creating the impression that incentives are a(n)______.

A) merit payment
B) bonus
C) commission
D) entitlement

Question 64

Rewarding ______ cannot be allowed if managers want the incentive program to continue to work in the future.

A) performers
B) success
C) productivity
D) nonperformers

Question 65

Acme Global gave its top executives the opportunity to buy Acme Global stock in 5 years at the same price at which the stock is selling today.Acme Global is using a(n)______ plan.

A) profit sharing
B) stock purchasing
C) employee stock ownership
D) stock option

Question 66

When Matthew started working at Acme Global,he was given a company car and $10,000 to decorate his new office.These incentives are called ______.

A) intrinsic rewards
B) commissions
C) entitlements
D) perquisites

Question 67

In compensation,a golden parachute provides ______.

A) stock options to executives instead of a higher salary
B) executive incentives to improve long-term organizational performance
C) a company funded retirement plan for senior level executives
D) a large lump sum payment to executives who are dismissed from a merged or acquired firm

Question 68

Zachary worked overtime to complete a project because he knew he would receive a bonus when the project was done.In this case,Zachary was motivated by a(n)______ reward.

A) intrinsic
B) extrinsic
C) entitlement
D) perquisite

Question 69

Incentives fail to be effective if they become so regular and so expected by the recipients that they become ______.

A) entitlements
B) bonuses
C) paychecks
D) merit pay

Question 70

______ provide executives who are dismissed from a merged or acquired organization with typically large lump sum payments on dismissal.

A) Perquisites
B) Golden parachutes
C) Entitlements
D) Social Loafers

Question 71

Acme Global gave its top executives the ongoing opportunity to buy Acme Global stock at a 5% discount.Acme Global is using a(n)______ plan.

A) profit sharing
B) stock purchasing
C) employee stock ownership
D) stock option

Question 72

______ are extra financial benefits usually provided to top employees in many businesses.

A) Golden parachutes
B) Merit payments
C) Perquisites
D) Loafers

Question 73

Managers should keep the time between the performance and reward as ______ as possible.

A) long
B) variable
C) short
D) undeterminable

Question 74

______ placed some significant limits on executive pay in public corporations and added new requirements for both reporting of compensation and of shareholder involvement with executive compensation.

A) Executive Compensation and Shareholder Involvement Act of 2010
B) The Madison Avenue Wall Street Reform and Consumer Protection Act of 2008
C) The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010
D) The Wall Street Compensation and Shareholder Involvement Act of 2008

Question 75

______ rewards are valued returns (such as incentive pay for performance)to the individual in exchange for doing something that the organization desires of the employee (such as work).

A) Lateral
B) Intrinsic
C) Extrinsic
D) Vertical

Question 76

______ are designed to cause executives in an organization to act to increase the value of the company over time.

A) Stock incentives
B) Social Loafers
C) Golden Parachutes
D) Intrinsic Rewards

Question 77

The current group of younger employees entering the workforce has been called the ______ generation because of the expectation that they are owed certain perquisites just for becoming an employee.

A) entitlement
B) merit
C) bonus
D) loafer

Question 78

Acme Global gives its employees stock in the company at the end of each year.The shares go directly into the employees' retirement accounts as part of the organization's ______ plan.

A) profit sharing
B) stock purchasing
C) employee stock ownership
D) stock option

Question 79

______ motivation means that a person does something because they like it,it is interesting and personally satisfying,and they want to do it.

A) Merit
B) Extrinsic
C) Intrinsic
D) Commission

Question 80

______ plans allow qualifying employees to buy the organization's stock essentially any time,usually at a discount.

A) Stock purchasing
B) Stock options
C) Variable pay
D) Social loafing