Question 1

Profit-sharing plans have limited motivational value as payments are only made once a year or deferred until retirement.

Accepted Answer

Profit-sharing plans may have limited motivational value because the infrequent nature of payments can reduce their immediate impact on employee motivation and engagement.

Question 2

Robix wants to increase employee job satisfaction and improve customer awareness. One way they could accomplish this is by instituting a gainsharing plan.

Accepted Answer

The answer of Robix wants to increase employee job satisfaction...

Question 3

Stock options are rights attached to the achievement of specific organizational objectives.

Accepted Answer

Stock options are rights granted to employees to purchase shares of the company at a fixed price, not directly tied to specific organizational objectives.

Question 4

Employees are comfortable with the employee stock ownership plan because the federally established Pension Benefit Guaranty Corporation guarantees them their contribution to the plan.

Accepted Answer

While employees may feel more secure with an ESOP, the Pension Benefit Guaranty Corporation only guarantees certain types of pension plans, not ESOPs.

Question 5

When the team developing the XLR at Robix brought it in under budget, team members received a bonus. The amount each individual received varied based on salary level. In this situation, the team bonus was paid out in proportion to their relative contribution to the team.

Accepted Answer

The bonus was varied based on salary level, not based on the relative contribution of each team member to the project.

Question 6

ESOPs have been criticized because a pensioner can become dependent on the stock price.

Accepted Answer

ESOPs (Employee Stock Ownership Plans) are retirement plans that allow employees to own a portion of the company they work for through stocks. As a result, their retirement income is tied to the performance of the company's stock price. This can be risky as the pensioner has limited control over the stock price, making them dependent on the company's performance. Therefore, ESOPs have been criticized for making retirement income vulnerable to market volatility.

Question 7

Robix senior management wants to use an incentive plan that will allow all Robix employees to benefit from the plan's payout. This means they should be looking at enterprise incentive plans.

Accepted Answer

Enterprise incentive plans are designed to provide incentives or benefits to all employees of a company, rather than just a select few. Therefore, implementing an enterprise incentive plan would allow all Robix employees to benefit from the plan's payout, as senior management desires.

Question 8

Robix uses an incentive payout that is based upon increases in sales volume. Robix is using a Scanlon plan.

Accepted Answer

The Scanlon Plan is a type of gainsharing program that focuses on productivity improvements and cost savings, rather than solely on increases in sales volume.

Question 9

When the team developing the XLR at Robix brought it in under budget, team members received a bonus. The amount each individual received varied based on their role in cutting development costs. In this situation, the team bonus was paid out in proportion to their relative contribution to the team.

Accepted Answer

The statement clearly indicates that team members received a bonus in proportion to their relative contribution to the team, which implies that the distribution of bonus was based on performance and role in cost-cutting.

Question 10

The idea behind the Scanlon plan is that employees should offer ideas to improve productivity and, in turn, be rewarded for those ideas.

Accepted Answer

The statement accurately summarizes the concept of the Scanlon plan.

Question 11

In most profit-sharing plans, about 20 to 25 percent of net profits are shared with employees.

Accepted Answer

This is generally true for most profit-sharing plans, but the exact percentage can vary depending on the company and the plan itself.

Question 12

Employers use stock ownership incentive plans to give employees a share in the company's success.

Accepted Answer

Employers use stock ownership incentive plans to provide employees with a share in the company's success, and to incentivize them to perform better.

Question 13

By using employee stock ownership plans, employers can provide retirement benefits for their employees at a relatively low cost.

Accepted Answer

Employee stock ownership plans (ESOPs) allow employees to acquire ownership in the company they work for, typically through the purchase of company stock. ESOPs offer several advantages, including providing retirement benefits for employees at a relatively low cost to the employer.

Question 14

In an effort to increase employee productivity, Robix has initiated a stock option program. This means that for a limited period of time, employees will be able to purchase some shares of stock in Robix as a set price.

Accepted Answer

The statement mentions the initiation of a stock option program to increase employee productivity, indicating that employees will be given the opportunity to purchase shares of stock at a set price for a limited time period.

Question 15

Perquisites are special nonmonetary benefits given to executive employees.

Accepted Answer

Perquisites, also known as perks, may include things like company cars, expense accounts, or memberships to exclusive clubs. They are often given to high-level executives as a way to reward them for their work and to encourage them to stay with the company.

Question 16

Robix senior management has as one of its goals to promote interaction and support between management and employees, as they feel that this would improve productivity and, ultimately, company profitability. Robix should consider an Improshare plan.

Accepted Answer

Improshare plans are designed to promote interaction and teamwork between employees and management, and to encourage productivity and profitability through shared incentives. Therefore, an Improshare plan would be a good fit for Robix's goal of promoting interaction and support between management and employees.

Question 17

A major criticism of short-term incentives for executives is that they place too much emphasis on monthly or quarterly performance, which may lead to negligence of long-term survival and growth objectives.

Accepted Answer

Short-term incentives can create a focus on immediate results at the expense of important long-term objectives such as investment in research and development, building sustainable relationships with customers, and developing human capital.

Question 18

The performance threshold in incentive pay programs is

Accepted Answer

The performance threshold in incentive pay programs is the minimum level an employee must reach in order to qualify for variable pay. In other words, if an employee's performance falls below the threshold, they will not receive any additional pay beyond their fixed salary or base pay. The threshold is set as a way to ensure that employees are meeting certain performance standards before being rewarded with additional pay.

Question 19

A weakness of profit-sharing plans is that employees do not have total control over the profitability of an organization.

Accepted Answer

Profit-sharing plans involve distributing a portion of the profits of an organization among its employees. However, employees do not have complete control over the profitability of the organization, as it is affected by a range of factors beyond their control, such as market conditions and management decisions.

Question 20

Robix has a stock option program, which means that it rewards employees' performance by giving them shares of stock.

Accepted Answer

The answer of Robix has a stock option program, which...

Quiz 10: Pay-For-Performance: Incentive Rewards