Question 1

The "do only what you get paid for" syndrome is a potential problem tied to which of the following conditions?
A) Companies do not use a pay-for-performance strategy.
B) Employees help develop a pay-for-performance strategy.
C) Pay is closely tied to specific performance indicators.
D) Employee intrinsic drives are reinforced.

Accepted Answer

When pay is closely tied to specific performance indicators, employees might focus solely on the tasks that directly affect their compensation, neglecting other important aspects of their job that are not directly rewarded. This can lead to a narrow focus on rewarded tasks at the expense of broader job responsibilities or organizational goals.

Question 2

In most firms,pay-for-performance compensation systems experience a credibility gap among approximately ________ of employees.
A) 15%
B) 25%
C) 50%
D) 75%

Accepted Answer

D

Question 3

Which of the following best explains the findings of the Kaiser Permanente Northern California study?
A) External rewards decrease internal motivation and performance.
B) Nonmonetary rewards are less motivating than monetary rewards.
C) Incentive plans increase productivity but lower overall job satisfaction.
D) Employee performance increases linearly with increased monetary rewards.

Accepted Answer

The study found that giving small, nonmonetary incentives (external rewards) for healthy behavior actually decreased participants' motivation to maintain those behaviors on their own (internal motivation). This supports the idea that external rewards can undermine intrinsic motivation.

Question 4

Pay-for-performance has little effect on employees' effort level and commitment to the organization.

Accepted Answer

Research has shown that pay-for-performance can have a significant impact on employee effort level and commitment to the organization. When employees believe that increased effort will lead to higher rewards, they may be more motivated to perform well and increase their commitment to the organization. However, the design and implementation of the pay-for-performance system can also affect its effectiveness. If the system is not perceived as fair or if the reward structure is unclear, it may not have the desired impact on employee behavior.

Question 5

Research suggests that pay-for-performance raises productivity but decreases job satisfaction.

Accepted Answer

Several studies have shown that pay-for-performance can increase productivity, but it can also lead to decreased job satisfaction among employees. When employees are motivated by the prospect of higher pay, they may become more focused on achieving specific targets rather than the quality of their work, leading to a decrease in job satisfaction. Additionally, employees who receive pay-for-performance may feel that their efforts are not fairly rewarded, leading to dissatisfaction with their jobs.

Question 6

David is frustrated at his company's inability to maintain a single system of pay-for-performance and is finding it difficult to adapt to new policies.David is probably:
A) encountering dissonance with his psychological contract.
B) recognizing an increase in his short-term intrinsic drives.
C) suffering from the "do only what you get paid for" syndrome.
D) receiving only financial rewards rather than nonfinancial rewards.

Accepted Answer

David's frustration with the company's inconsistent pay-for-performance system suggests that there is a misalignment between his expectations (psychological contract) and what the company is actually delivering. This mismatch could be causing cognitive dissonance, leading to his frustration.

Question 7

A key assumption behind pay-for-performance compensation is that:
A) the importance of the job needs to be weighed in figuring the incentive.
B) the organization's performance depends on individuals' performance.
C) teams are not suitable "vehicles" for most corporate incentive programs.
D) accurate job evaluations and market surveys are critical to calculate incentives.

Accepted Answer

Pay-for-performance assumes that an individual's performance directly impacts the organization's overall performance. Therefore, incentivizing individual performance is believed to improve overall organizational performance.

Question 8

Nearly 95% of U.S.companies are expected to use pay-for-performance plans by 2014.

Accepted Answer

According to a survey conducted by WorldatWork, nearly 95% of U.S. companies are expected to use pay-for-performance plans by 2014.

Question 9

Pay-for-performance is likely to enhance the spirit of cooperation in an organization,as employees will work to help one another improve their job performance.

Accepted Answer

Pay-for-performance can actually foster competition rather than cooperation among employees, as individuals focus on maximizing their own performance and rewards rather than helping others.

Question 10

Most employees at Sterling Enterprises work on a team.The firm is considering the implementation of a pay for performance plan.Which of the following would be the most likely challenge of such a plan?
A) Establishing an HR scorecard for each team
B) Isolating individual control over work processes
C) Separating individual contributions from team contributions
D) Creating a psychological contract between teams and the firm

Accepted Answer

The most likely challenge of implementing a pay for performance plan in a team-based environment is separating individual contributions from team contributions. Pay for performance plans typically reward individual performance, but in a team-based environment, it can be difficult to determine the extent of an individual's contribution versus the team's overall performance. It may also lead to a competitive rather than collaborative team environment. Establishing an HR scorecard for each team and creating a psychological contract between teams and the firm are possible strategies to help address this challenge, but they do not directly address the issue of separating individual contributions from team contributions. Isolating individual control over work processes is not a relevant challenge in this situation.

Question 11

What is the most common type of pay for performance used by firms?
A) Perks
B) Bonuses
C) Stock options
D) Nonmonetary rewards

Accepted Answer

Bonuses are the most common type of pay for performance used by firms. This is because it is a simple and effective way to incentivize employees to work harder and achieve more. Perks and nonmonetary rewards are also used by some firms, but they are not as common as bonuses. Stock options are often used as a long-term incentive for executives, but they are not typically used for most employees.

Question 12

The experience of Century Telephone Company clearly showed that pay-for-performance programs may promote:
A) problems linking group and individual incentives.
B) ethical violations that led to employee lawsuits.
C) increases in employee conflicts and stress.
D) excessive union involvement.

Accepted Answer

Century Telephone Company's experience with pay-for-performance programs highlighted that such initiatives can lead to increased employee conflicts and stress. This is because employees may compete against each other rather than collaborate, leading to a tense work environment.

Question 13

Pay-for-performance or incentive compensation systems are built on the assumption that individual employees and work teams differ in how much they contribute to the firm.

Accepted Answer

Pay-for-performance and incentive compensation systems are designed to reward employees based on their individual and team contributions to the company. This assumes that some employees may be more productive or effective than others and should therefore receive greater compensation for their efforts.

Question 14

It is most likely true that the use of pay-for-performance systems is:
A) increasing rapidly around the world.
B) declining due to implementation problems.
C) failing to motivate employees as employers had expected.
D) increasing slowly among small businesses in the high-tech industry.

Accepted Answer

Pay-for-performance systems are becoming more popular globally as organizations seek to align employee incentives with company goals, leading to an increase in their adoption.

Question 15

What is the primary concern about physicians receiving incentives from pharmaceutical firms and state governments?
A) Doctors and nurses lacking time to see the most needy patients.
B) Doctors placing financial gain ahead of patient care.
C) Private health insurance becoming unaffordable.
D) Medicare and Medicaid running out of money.

Accepted Answer

The primary concern about physicians receiving incentives from pharmaceutical firms and state governments is that it may incentivize doctors to place financial gain ahead of patient care. This could lead to overprescribing of medications and treatments simply to earn more money, regardless of whether it is the best option for the patient's health.

Question 16

Resources,Inc.has recently increased its emphasis on pay-for-performance.Within the last several months,there has been a sharp increase in employee competition and the sabotaging of projects.The incentive plan has most likely:
A) expanded the credibility gap.
B) decreased personal motivation.
C) discouraged employee cooperation.
D) diminished managerial powers over subordinates.

Accepted Answer

The increase in employee competition and sabotaging of projects suggests that the pay-for-performance incentive plan has discouraged employee cooperation. Instead, employees may be more focused on individual gain rather than working together towards common goals.

Question 17

One advantage of pay-for-performance compensation systems is the relative ease of accurately assessing an employee's actual contribution to the company.

Accepted Answer

Pay-for-performance systems often face challenges in accurately assessing an individual's contribution due to the complexity of work, interdependencies among roles, and subjective evaluation criteria.

Question 18

Camara and Jose always ask the professor in their American Government class exactly what will be on the next exam.They ask this question so that they can study for no more than they absolutely must.This is an example of:
A) the negative effects of pay-for-performance on the spirit of cooperation.
B) the "do only what you get paid for" syndrome.
C) negative psychological contracts.
D) an increase of intrinsic drives.

Accepted Answer

Camara and Jose's behavior exemplifies the "do only what you get paid for" syndrome which refers to individuals who only do the minimum required to receive the reward or compensation they desire. They are solely focused on the external motivation of passing the exam rather than the intrinsic motivation of gaining knowledge and better understanding of the subject matter.

Question 19

Blair and Jose always ask the professor in their American Government class exactly what will be on the next exam.They ask this question so that they can study for no more than they absolutely must.This is an example of the "do only what you get paid for" syndrome.

Accepted Answer

The behavior of Blair and Jose is an example of the "minimum effort" approach, which is a characteristic of the "do only what you get paid for" syndrome. They are not interested in learning for its own sake, but rather in passing the exam with as little effort as possible.

Question 20

If a firm frequently changes the basis of its pay-for-performance system,it will most likely:
A) diminish its credibility gap.
B) violate its psychological contract with employees.
C) generate fear among employees due to a lack of control.
D) increase employees' intrinsic drive to perform beyond expectations.

Accepted Answer

Frequent changes in pay-for-performance system can result in a violation of the psychological contract between the organization and employees. This can lead to a decrease in trust and commitment from employees towards the organization, as they may not feel they can rely on the system to reward their performance fairly and consistently.

Quiz 11: Rewarding Performance

The "do only what you get paid for" syndrome is a potential problem tied to which of the following conditions?

In most firms,pay-for-performance compensation systems experience a credibility gap among approximately ________ of employees.

Which of the following best explains the findings of the Kaiser Permanente Northern California study?

Pay-for-performance has little effect on employees' effort level and commitment to the organization.

Research suggests that pay-for-performance raises productivity but decreases job satisfaction.

David is frustrated at his company's inability to maintain a single system of pay-for-performance and is finding it difficult to adapt to new policies.David is probably:

A key assumption behind pay-for-performance compensation is that:

Nearly 95% of U.S.companies are expected to use pay-for-performance plans by 2014.

Pay-for-performance is likely to enhance the spirit of cooperation in an organization,as employees will work to help one another improve their job performance.

Most employees at Sterling Enterprises work on a team.The firm is considering the implementation of a pay for performance plan.Which of the following would be the most likely challenge of such a plan?

What is the most common type of pay for performance used by firms?

The experience of Century Telephone Company clearly showed that pay-for-performance programs may promote:

Pay-for-performance or incentive compensation systems are built on the assumption that individual employees and work teams differ in how much they contribute to the firm.

It is most likely true that the use of pay-for-performance systems is:

What is the primary concern about physicians receiving incentives from pharmaceutical firms and state governments?

Resources,Inc.has recently increased its emphasis on pay-for-performance.Within the last several months,there has been a sharp increase in employee competition and the sabotaging of projects.The incentive plan has most likely:

One advantage of pay-for-performance compensation systems is the relative ease of accurately assessing an employee's actual contribution to the company.

Camara and Jose always ask the professor in their American Government class exactly what will be on the next exam.They ask this question so that they can study for no more than they absolutely must.This is an example of:

Blair and Jose always ask the professor in their American Government class exactly what will be on the next exam.They ask this question so that they can study for no more than they absolutely must.This is an example of the "do only what you get paid for" syndrome.

If a firm frequently changes the basis of its pay-for-performance system,it will most likely: