Question 1

One significant difference between gainsharing and profit-sharing plans is that gainsharing-plan payouts are generally distributed more frequently.

Accepted Answer

Gainsharing plans typically distribute payouts more frequently, as they are based on achieving specific performance targets and employees can see the results of their efforts more often. Profit-sharing plans, on the other hand, distribute payouts based on overall company profits, which may only be distributed annually or even less frequently.

Question 2

The Canadian Securities Administrators (CSA)requires companies to report compensation levels for top-paid executives.

Accepted Answer

The CSA does require companies to report compensation levels for top-paid executives as part of their disclosure obligations. This information can typically be found in a company's Management Information Circular or Annual Information Form.

Question 3

The reinforcement theory to compensation management suggests that managers pay at-or below-market wages.

Accepted Answer

The reinforcement theory suggests that managers should pay above-market wages to reinforce desirable behaviors and outcomes from employees.

Question 4

Organizations that link pay to individual performance may be more likely to attract individualistic employees,whereas organizations relying more heavily on team rewards are more likely to attract team-oriented employees.

Accepted Answer

This statement is true as employees who are more individualistic may prefer to work in organizations where their pay is linked to their individual performance, while employees who are more team-oriented may prefer to work in organizations where team rewards are emphasized.

Question 5

Gainsharing plans,like the Scanlon plan,and other pay-for-performance plans include monetary awards only.

Accepted Answer

Gainsharing plans, like the Scanlon plan, and other pay-for-performance plans can include non-monetary awards such as recognition, promotions, and additional training opportunities.

Question 6

One disadvantage of merit pay is its inability to define and reward a broad range of performance dimensions.

Accepted Answer

The answer of One disadvantage of merit pay is its...

Question 7

Different pay systems appear to attract people with different personality traits and values.

Accepted Answer

Research suggests that people with a preference for teamwork, cooperation, and intrinsic motivation are more attracted to pay systems that emphasize collective rewards and recognition, while individuals with a preference for competition, individual achievement, and extrinsic motivation may be more attracted to pay systems that offer individual incentives and performance-based pay.

Question 8

Individual incentive pay plans are more commonly found in organizations than are merit pay plans.

Accepted Answer

Merit pay plans are more commonly found in organizations because they are typically easier to implement across a wide range of job types and are more closely tied to overall performance appraisals, making them more popular for rewarding employees.

Question 9

From a reinforcement theory standpoint,the performance motivation of stock option plans is particularly high.

Accepted Answer

The answer of From a reinforcement theory standpoint,the performance motivation...

Question 10

One solution to profit-sharing during a downturn is to design plans that have downside risk but not upside risk.

Accepted Answer

Profit-sharing plans that only have downside risk and not upside risk would not incentivize employees or align their interests with the company's success. Effective profit-sharing plans typically involve sharing both the upside and downside to motivate and reward employees for contributing to the company's performance.

Question 11

While the agency theory has value in the analysis and design of managerial compensation,it is not applicable to non-managerial compensation.

Accepted Answer

The agency theory can be applied to non-managerial compensation as well, as it concerns the relationship between principals (such as employers) and agents (such as employees) in achieving mutually beneficial outcomes.

Question 12

Under merit pay,the flow of feedback tends to be multidirectional,from supervisor,peers,and subordinates to the employee.

Accepted Answer

Under merit pay, feedback primarily flows from supervisors to employees, focusing on individual performance rather than a multidirectional feedback system involving peers and subordinates.

Question 13

There is strong research evidence that profit-sharing plans contribute to organizational performance.

Accepted Answer

The answer of There is strong research evidence that profit-sharing...

Question 14

The four performance measures of a balanced scorecard include financial measures,customer measures,internal measures,and learning and growth measures.

Accepted Answer

This statement is true. The four performance measures of a balanced scorecard are financial measures, customer measures, internal measures, and learning and growth measures.

Question 15

The performance motivational effects of either profit sharing or gainsharing are likely to be greater in smaller firms or units than in larger organizations or units.

Accepted Answer

This is because in smaller firms or units, the impact of individual contributions is more visible and the incentive of sharing in the profits or gains is more meaningful to employees. In larger organizations or units, the effects may be diluted due to a greater number of employees and less visibility of individual contributions.

Question 16

Research suggests that the use of pay-for-performance plans among top-and middle-level managers result in increased levels of profitability.

Accepted Answer

Research has shown that the use of pay-for-performance plans among top and middle-level managers can result in increased levels of profitability for organizations.

Question 17

A criticism of merit pay programs is that the differential in pay between high performers and mediocre,or even poor performers is not significant enough to influence employee behaviour or attitudes.

Accepted Answer

This is a common criticism of merit pay programs, as the difference in pay may not be enough to truly motivate employees to improve their performance.

Question 18

Group incentive pay plans tend to use a broader range of performance measures than do individual-oriented plans.

Accepted Answer

Group incentive pay plans typically focus on overall team or department performance and therefore consider a broader range of performance measures, such as team productivity, customer satisfaction, and quality improvement. In contrast, individual-oriented plans often use more specific and narrowly defined measures, such as sales quotas or individual performance reviews.

Question 19

Pay plans are typically used to energize,direct,or control employee behaviour.

Accepted Answer

Pay plans are structures put in place to incentivize, guide, or regulate employee action and conduct through monetary rewards and incentives.

Question 20

Incentive pay refers to linking annual pay increases to performance appraisal ratings.

Accepted Answer

Incentive pay is additional compensation awarded for performance above expected standards, not necessarily linked to annual pay increases or performance appraisal ratings. It's designed to motivate and reward employees for exceeding performance or productivity goals.

Quiz 9: Recognizing Employee Contributions With Pay