Question 1

As one approach to implementing performance-based pay plans, indexed stock options:

Accepted Answer

Indexed stock options are designed to ensure that employees are not punished if the economy takes a downturn. They are often tied to larger economic indicators, so the value of the stock options is not solely dependent on the performance of the company. This helps to reduce the risk for employees and incentivizes them to work towards overall economic growth, rather than just the success of their specific company. None of the other choices accurately describe indexed stock options.

Question 2

Improshare

Accepted Answer

The answer of Improshare
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Question 3

Combined distribution plans:

Accepted Answer

Combined distribution plans involve distributing a portion of profits immediately to employees, while setting aside the remaining amount in a designated account for future distribution.

Question 4

Performance based pay recognizes that people working in the same job can contribute to the organization at a different level in terms of value and seeks to provide an incentive for maximizing their contribution.

Accepted Answer

Performance based pay is designed to reward individuals for their added value and incentivize them to contribute more to the organization. This recognizes that not all employees will perform at the same level, and seeks to motivate and retain high performers.

Question 5

What challenges does a multinational company face in using performance-based pay?

Accepted Answer

Different laws and regulations in different countries can create challenges in implementing performance-based pay. Cultural values can also differ and influence the effectiveness of such a system in motivating employees.

Question 6

Profit-sharing plans:

Accepted Answer

Profit-sharing plans are designed to distribute profits to employees when the organization is financially able to do so, aligning employee interests with company performance.

Question 7

Which of the following questions need to be answered when an organization is establishing a commission pay program?

Accepted Answer

The answer of Which of the following questions need to...

Question 8

Employee stock ownership plans (ESOPs):

Accepted Answer

ESOPs are types of broad-based stock ownership plans that grant shares of stock to employees as a means of long-term savings and retirement. They usually do not link stocks that can be purchased to individual or group performance indicators, and payments can vary depending on the specifics of the plan. Therefore, all of the above choices accurately describe ESOPs.

Question 9

When designed appropriately, team-based incentives offer four major advantages when compared with individual incentive systems. Which of the following statements describes one of those advantages?

Accepted Answer

All four statements are advantages of team-based incentive systems. The first statement describes how the performance of one team member can serve as a model for others to follow, leading to improved performance across the team. The second statement refers to the phenomenon of social facilitation, whereby the presence of others can increase motivation and effort. The third statement highlights the additional benefits of team camaraderie and support in reinforcing the effectiveness of rewards. Finally, the fourth statement suggests that team-based incentives can mitigate the negative effects of peer pressure by promoting positive group norms and accountability.

Question 10

Stock option plans:

Accepted Answer

Stock option plans give employees the right to buy stock during a specified period of time or under other specified conditions. The other options given are not true - B) Stock option plans are still common and legal after Enron, C) Stock option plans are not restricted to executives, and D) Stock option plans may be based on individual or company-wide performance.

Question 11

Dakota stopped by the alteration shop yesterday. In the shop was posted a sign that said, "Buttons put on for $3, zippers repaired for $8, dresses hemmed for $10, pants hemmed for $8.50, all other prices based on job." From this information, you should be able to tell that the alteration shop uses a:

Accepted Answer

The answer of Dakota stopped by the alteration shop yesterday....

Question 12

A _____ plan is an award of shares with restrictions that require a predetermined length of service to elapse before vesting occurs.

Accepted Answer

The description in the question matches the definition of time-based restricted stock, where the shares are awarded with restrictions and vesting occurs only after a predetermined length of service has elapsed. The other options listed in the question, such as performance-vested restricted stock or premium-priced stock options, have different characteristics and definitions.

Question 13

Broad-based stock option plans

Accepted Answer

The answer of Broad-based stock option plans
...

Question 14

When compared to merit pay, incentives tied to unit or companywide performance

Accepted Answer

Incentives tied to unit or companywide performance can create an ownership mentality in employees, which is not true for merit pay. Options A, B, and C are not applicable for incentives tied to unit or companywide performance.

Question 15

Deferred distribution plans:

Accepted Answer

Deferred distribution plans place earnings in an escrow account for distribution upon retirement, termination, disability, or death. They are not related to gain-sharing plans or top management performance and may not be as popular as current distribution plans because they lack immediacy.

Question 16

Gain-sharing plans are premised on the assumption that:

Accepted Answer

Gain-sharing plans involve sharing cost savings or productivity improvements with employees, which is based on the assumption that costs can be reduced and productivity improved by eliminating wasted materials and labor, developing new or better products, or working smarter. This approach incentivizes employees to work towards common goals and reap the rewards of their efforts.

Question 17

Current distribution plans:

Accepted Answer

Option D provides a clear and tangible method of distributing profits to employees on a regular basis. This can help to motivate employees and create a sense of ownership in the company's success. Options A, B, and E are all valid distribution plans, but they do not necessarily provide the same level of immediate impact as quarterly or annual profit sharing. Option C is incorrect, as there is no mention of any specific type of profit sharing plan in the given information.

Question 18

The Scanlon and Rucker plans for gain sharing are based on the principle that:

Accepted Answer

The Scanlon and Rucker plans for gain sharing are based on the principle that management should adopt a philosophy of employee participation. This means that employees should be involved in decision-making processes and their ideas should be valued. This approach can lead to increased motivation and engagement among employees, which can help to improve overall organizational performance. The other options are not consistent with the principles of the Scanlon and Rucker plans.

Question 19

In setting up a combined payment plan for salespeople, the most critical question for an organization to answer is,"

Accepted Answer

The most critical question for an organization when setting up a combined payment plan for salespeople is determining the balance between salary and commission. This balance directly impacts the motivation and behavior of salespeople, influencing their focus on short-term sales versus long-term customer relationships.

Question 20

The Scanlon Plan

Accepted Answer

The Scanlon Plan is a gainsharing program that primarily focuses on reducing labor costs and sharing the resulting savings with employees. It does not exclusively apply to startup firms, does not solely use complex measures of performance, and was not developed during the Industrial Revolution.

Quiz 11: Using Performance-Based Pay to Achieve Strategic Objectives