Question 1

A type of incentive plan that generally is organization-wide and that provides employees with a share of the organization's profits in a specified period is a(n)

Accepted Answer

The description best matches a profit-sharing plan, which provides employees with a share of the organization's profits in a given period. Group incentive plans, individual incentive plans, and gainsharing plans may involve different types of incentives, such as bonuses, commissions, or awards, and may focus on specific goals or performance measures. A semi-variable incentive plan may combine fixed and variable components, such as a base salary plus a bonus based on sales or revenue.

Question 2

A plan in which a production standard is set for a specific work group and its members are paid incentives if the group exceeds the production standard, is known as a(n)

Accepted Answer

A team or group incentive plan is a type of incentive plan in which a production standard is set for a specific work group, and its members are paid incentives if the group exceeds the production standard. This type of plan is designed to encourage cooperation and teamwork among group members and to promote productivity and efficiency.

Question 3

A term plan that refers to any plan that ties pay to productivity or to some other measure of the firm's profitability is called

Accepted Answer

The term plan that ties pay to productivity or profitability is referred to as variable pay. A profit-sharing plan refers to a specific type of variable pay that distributes a portion of a company's profits to employees. Quality circles are employee-led groups that focus on improving processes and productivity. Fringe benefits refer to benefits beyond regular wages or salaries, such as insurance or retirement plans. Supplemental pay benefits refer to additional pay provided to employees for specific reasons, such as working overtime or hazardous job duties.

Question 4

Popularized by Frederick Taylor, financial rewards paid to workers whose production exceeds some predetermined standard came into use in the late 1800s.These financial rewards are commonly referred to as

Accepted Answer

Financial incentives are financial rewards paid to workers whose production exceeds some predetermined standard.

Question 5

A type of incentive plan that is an organization-wide pay plan designed to reward employees for improvements in organizational productivity is

Accepted Answer

A gainsharing program is specifically designed to incentivize employees to improve organizational productivity. In this type of incentive plan, employees receive bonuses or other rewards when they meet or exceed productivity or efficiency targets within the organization. These programs are typically organization-wide, and employees at all levels can be eligible to participate.

Question 6

When a worker is rewarded by a percent premium that equals the percent by which his or her performance is above standard, this is known as

Accepted Answer

The given scenario describes the differential piece-rate plan, where the worker is rewarded a premium that equals the percent by which their performance is above standard. Gainsharing involves sharing the cost savings achieved due to improved performance, while the percent incentive plan and premium plan are vague terms and can refer to different types of incentives. The bonus hour plan is not relevant to the given scenario.

Question 7

Amy received $2000 from her employer last week in order to recognize the extra hours, beyond normal work hours, that she had worked in the past month.Amy's payment was a(n)

Accepted Answer

The answer of Amy received $2000 from her employer last...

Question 8

Today, any plan that ties pay to productivity or profitability is called

Accepted Answer

Variable pay refers to any plan that ties pay to productivity or profitability, as it varies based on performance outcomes.

Question 9

Aziz is the human resources professional at a consulting engineering company.He has been asked by the executive team to suggest incentives that would most likely motivate the junior engineers who have recently graduated from university and are generally in their mid to late 20's.Which of the following should Aziz suggest?

Accepted Answer

Junior engineers in their mid to late 20's are likely to be socially conscious and value work-life balance. Offering paid time off to volunteer for charitable organizations would align with their values and provide them with a sense of purpose outside of work, which can increase job satisfaction and motivation. High-end fitness equipment and luxury cruises may be appealing to some, but may not be universally motivating. On-site day care and elder care may be more relevant to older employees with children or aging parents.

Question 10

The following are all disadvantages of a piecework incentive plan except that

Accepted Answer

Piece-rate plans appearing equitable in principle is not a disadvantage; it is actually an advantage as it suggests fairness in compensation based on output.

Question 11

The following are all types of incentive plans except

Accepted Answer

The question states "except" so we are looking for the answer that is not a type of incentive plan. Straight salary and commission is a type of pay structure, not an incentive plan. The other options listed (profit-sharing plans, individual incentive programs, spot bonuses, and group incentive programs) are all types of incentive plans.

Question 12

Accurate ________ are a precondition for effective variable pay plans.

Accepted Answer

Performance appraisals provide a measurement of employee performance, which is necessary to determine the appropriate variable pay. Without accurate performance appraisals, it would be difficult to determine how much variable pay should be given and to whom. Job evaluation and job descriptions are important for determining the worth of a job and its requirements, but they do not directly relate to individual performance. Salary curves are used to determine the overall salary structure of an organization and do not directly relate to variable pay plans.

Question 13

Amy is part of a team of 4 software developers.Upon completion of a major client project, she and each of her team members received a set amount in addition to their base salary.All received the same additional amount.Amy received this payment as part of a

Accepted Answer

The scenario describes a group incentive program where all team members receive the same additional amount for completing a project, rewarding the team as a whole rather than individuals separately.

Question 14

Under this pay system, each worker receives the minimum hourly wage plus an incentive for each piece produced above a set number of pieces per hour.This system is known as a

Accepted Answer

A guaranteed piecework plan combines a minimum hourly wage with an incentive for producing above a set number of pieces, ensuring workers receive a base pay plus additional earnings for higher productivity.

Question 15

Aziz is the human resources professional at a consulting engineering company.He has been asked by the executive team to suggest incentives that would most likely motivate the senior engineers who have worked in their professional capacity for at least 20 years and are generally in their early 50's.Which of the following should Aziz suggest?

Accepted Answer

Senior engineers in their 50s who have been with the company for 20 years are likely to value recognition for their contributions. Therefore, a recognition program would be an important incentive to offer. Adventure travel would also likely appeal to this age group, as it provides an opportunity for them to try new experiences and challenge themselves. Providing both recognition and adventure travel would show appreciation for their work and provide a unique benefit. On-site day care, luxury cruises, and paid time off for volunteering are all good incentives, but they may not be as relevant or motivating for this specific group of employees.

Question 16

The piecework plan is expressed in monetary terms, whereas the standard hour plan is expressed in

Accepted Answer

The standard hour plan rewards employees with a premium that equals the percentage by which their performance exceeds a set standard, rather than being directly tied to monetary units like dollars or cents.

Question 17

Under this pay system, each worker receives a set payment for each piece produced or processed in a factory or shop.This system is known as a

Accepted Answer

The description matches the definition of a straight piecework plan, where workers are paid a fixed rate per piece produced or processed. The other options do not accurately describe this pay system.

Question 18

A type of incentive plan that gives income over and above base salary to individual employees who meet a specific individual performance standard is a(n)

Accepted Answer

An individual incentive program gives additional income to employees who meet a specific performance standard. Straight commission, spot bonuses, profit-sharing plans, and cash bonus systems are all different types of incentives, but they are not specifically tied to individual performance standards.

Question 19

Ira, the manager of a woodworking business, is considering implementing a piecework incentive plan for the woodworkers reporting to him.You are an HR consultant he has asked for advice as to the benefits of implementing such a plan.You advise him of all of the following except that

Accepted Answer

The answer of Ira, the manager of a woodworking business,...

Question 20

Which is the most commonly used and oldest type of incentive plan system of pay based on the number of items processed by each individual worker in a unit of time?

Accepted Answer

The piecework plan is the most commonly used and oldest type of incentive plan system based on the number of items processed by each individual worker in a unit of time. This plan motivates workers to produce more items in less time to earn more pay.

Quiz 12: Pay-for-Performance and Financial Incentives