Question 1

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

The statement indicates that employees are rewarded for developing new products quickly, which suggests that the incentive plan is tied to the goal of being first-to-market with new technology.

Question 2

Major advantages of piecework systems are that the wage payment is simple to compute, and an organization can predict labor costs with reasonable accuracy.

Accepted Answer

Piecework systems pay employees based on the amount of work completed, which makes wage payment easy to compute. Additionally, because the organization pays for each unit of work completed, it can reasonably predict labor costs.

Question 3

Generally, a bonus plan does not become part of an employee's base pay.

Accepted Answer

A bonus plan is typically a separate, discretionary payment or incentive that is not included in an employee's regular salary or wages.

Question 4

Incentive plans may fail because employees have little ability to affect performance standards.

Accepted Answer

Incentive plans can fail if employees feel they have little control or ability to influence the performance standards set, leading to demotivation and disengagement.

Question 5

Incentive plans can create an organizational environment of shared commitment since individuals contribute to organizational success.

Accepted Answer

Incentive plans reward individuals for their contributions towards achieving organizational goals. This can create a sense of shared commitment and motivation towards working together to accomplish organizational success.

Question 6

Standard hour plans are based on specific production standards set for individual jobs.

Accepted Answer

The answer of Standard hour plans are based on specific...

Question 7

In order to make sure that the pay they give their executives is similar to that of similar companies, Robix can use competitive benchmarking.

Accepted Answer

Competitive benchmarking involves comparing the pay practices of one company with other companies in its industry in order to ensure that their compensation is competitive and in line with industry standards. This can be useful for Robix to determine whether their executive pay is fair and competitive with other companies in the same industry.

Question 8

More than 80 percent of companies globally are offering variable pay programs.

Accepted Answer

According to WorldatWork's Total Rewards Survey, more than 80 percent of companies globally are indeed offering variable pay programs.

Question 9

Historically, incentive plans have not been a major element of strategic compensation management.

Accepted Answer

Incentive plans have been a major element of strategic compensation management, especially in recent years where organizations are increasingly focused on performance-based pay and incentivizing employees to meet specific goals and targets.

Question 10

Meshing compensation and organizational objectives help employees assume ownership of their jobs, which can, in turn, improve their effort and overall job performance.

Accepted Answer

Meshing compensation with organizational objectives can create a sense of ownership among employees, which has been linked to improved effort and job performance.

Question 11

For incentive plans to work effectively, employees must see a clear connection between the incentive payments they receive and their performance.

Accepted Answer

Incentive plans are designed to motivate employees to improve and exceed their performance. To achieve this level of engagement, employees must understand the direct correlation between their performance and the incentives they receive. Therefore, a visible connection between performance and incentive payments is necessary for the success of an incentive plan.

Question 12

The standard hour plan provides bonus payment for completing work in less than the specified time.

Accepted Answer

The standard hour plan does not provide bonus payment for completing work in less than the specified time.

Question 13

Piecework may be inappropriate where technology changes are frequent.

Accepted Answer

Piecework incentivizes workers to prioritize speed over quality, which may be counterproductive if frequent technology changes require frequent adaptation and attention to detail. This can result in mistakes or inefficiencies that ultimately cost the company more in lost time, resources, and revenue than it saves via piecework incentives.

Question 14

Fixed pay is more flexible than variable pay.

Accepted Answer

Variable pay is more flexible as it allows for adjustments based on performance, whereas fixed pay remains constant.

Question 15

Incentive plans based on productivity can reduce labor costs.

Accepted Answer

Incentive plans based on productivity can motivate employees to work more efficiently and produce more in less time, thereby reducing labor costs for the company.

Question 16

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

Accepted Answer

The performance threshold in incentive plans is the minimum level of performance that an employee must achieve to receive any incentive payment or reward. It is not the amount awarded to an employer.

Question 17

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

The description fits the definition of a straight piecework program where employees are paid based on the number of units produced.

Question 18

Under a straight piecework plan, if five minutes is the standard time to produce one unit and the employee's hourly rate is $7.50. The piece rate is $1.50 per unit.

Accepted Answer

The piece rate would be calculated by taking the hourly rate and dividing it by the standard production time per unit. In this case, $7.50 divided by 1/12 (or 5 minutes in decimal form) would equal $90 per hour or $1.50 per minute. Therefore, the piece rate would be $0.75 per unit, not $1.50 per unit.

Question 19

Management must be careful to ensure that incentive payments are viewed as both a reward and an entitlement.

Accepted Answer

Management must be careful to ensure that incentive payments are viewed as a reward for exceptional performance, rather than an entitlement or expected part of compensation. By setting clear performance criteria and communicating the purpose and goal of the incentive program, management can promote a positive and motivating atmosphere for employees.

Question 20

Under a differential piece rate, employees whose production performance exceeds the standard output receive a higher rate for all of their work than the rate paid to those who do not exceed the standard.

Accepted Answer

A differential piece rate pays employees who exceed the standard output a higher rate for all of their work.

Quiz 10: Pay-For-Performance: Incentive Rewards