Question 1

Ryobi is a large,international power tool manufacturer that develops affordable,high-quality products such as drills,circular saws,and routers for both homeowners and craftspeople.As the company continues to grow,its top executives want to ensure that employees are appropriately paid for their performance and that financial incentives are both fair and effective.Currently,the firm provides merit raises based on performance appraisals; however,executives are considering changing the current incentive plan. Which of the following questions is most relevant to the decision by Ryobi executives to discontinue all merit raises?

Accepted Answer

In order for merit raises to be effective, there should be a clear and consistent connection between productivity and merit pay. Thus, rather than focus on what incentive plans other manufacturing firms provide, the focus should be on Ryobi's productivity goals and linked merit pay. Gainsharing plans and high-performing managers are less relevant to the decision.

Question 2

How does merit pay differ from a bonus?

Accepted Answer

Merit pay is any salary increase the firm awards to an individual employee based on his or her individual performance. It is different from a bonus in that it usually becomes part of the employee's base salary, whereas a bonus is a one-time payment.

Question 3

An employer would most likely use an enterprise incentive management system to ________.

Accepted Answer

Tracking the performance of dozens or hundreds of measures and then computing individual employees' incentives is time consuming. As one solution, vendors provide enterprise incentive management (EIM) systems. These automate the planning, analysis, and management of incentive compensation plans.

Question 4

Merit raises typically become part of an employee's base salary.

Accepted Answer

A merit raise is any salary increase the firm awards to an individual employee based on his or her individual performance. It usually becomes part of the employee's base salary.

Question 5

According to research,which of the following has a significant impact on employee engagement?

Accepted Answer

Although not usually considered an "incentive," job design can significantly influence employee motivation and retention.

Question 6

Ryobi is a large,international power tool manufacturer that develops affordable,high-quality products such as drills,circular saws,and routers for both homeowners and craftspeople.As the company continues to grow,its top executives want to ensure that employees are appropriately paid for their performance and that financial incentives are both fair and effective.Currently,the firm provides merit raises based on performance appraisals; however,executives are considering changing the current incentive plan. Which of the following,if TRUE,undermines the argument that Ryobi should discontinue all merit raises?

Accepted Answer

If Ryobi managers have noticed productivity improvements among employees who receive merit raises, then the system is most likely effective and should not be discontinued. If employees want stock options instead of raises, or managers lack the necessary training to conduct performance appraisals, then merit raises should be discontinued.

Question 7

Tanner's employer puts a predetermined portion of profits into a trust account for Tanner's retirement.Which of the following is most likely the type of profit-sharing plan used by Tanner's employer?

Accepted Answer

With deferred profit-sharing plans, the employer puts cash awards into trust accounts for the employees' retirement. Here the employer generally distributes the awards based on a percentage of the employee's salary, or some measure of the employee's contribution to company profits.

Question 8

In a ________,the executive receives his or her shares only if he or she meets the preset performance targets.

Accepted Answer

Instead of stock options, more firms grant various types of performance shares such as performance-contingent restricted stock; the executive receives his or her shares only if he or she meets the preset performance targets.

Question 9

During difficult economic times,employers have to cut costs.What are some strategies for minimizing the costs associated with employee health care? What no-cost or low-cost methods are available to employers who want to recognize and reward hard-working employees?

Accepted Answer

The answer of During difficult economic times,employers have to cut...

Question 10

Ryobi is a large,international power tool manufacturer that develops affordable,high-quality products such as drills,circular saws,and routers for both homeowners and craftspeople.As the company continues to grow,its top executives want to ensure that employees are appropriately paid for their performance and that financial incentives are both fair and effective.Currently,the firm provides merit raises based on performance appraisals; however,executives are considering changing the current incentive plan. Which of the following,if TRUE,best supports the argument that Ryobi should eliminate all merit raises?

Accepted Answer

In order for merit raises to be effective, the performance appraisals need to be consistent and fair. Enterprise management systems, social recognition programs, and monthly sales quotas are less relevant to the decision.

Question 11

Workers at a t-shirt shop are paid a sum for each t-shirt they produce.Which incentive plan is most likely used by the employer?

Accepted Answer

Piecework involves paying the worker a sum (called a piece rate) for each unit he or she produces. Merit pay or a merit raise is any salary increase the firm awards to an individual employee based on his or her individual performance.

Question 12

Tyrone,a data entry clerk,is paid a basic hourly rate.He receives an extra percentage of his rate when his productivity is above normal.Which incentive plan is most likely used by Tyrone's employer?

Accepted Answer

A standard hour plan is a plan by which a worker is paid a basic hourly rate but is paid an extra percentage of his or her rate for production exceeding the standard per hour or per day. It is similar to piecework payment but based on a percent premium.

Question 13

Which of the following is the most commonly used tool for motivating employees?

Accepted Answer

Surveys find that firms most frequently use employee recognition programs to motivate employees. Merchandise, special events, travel, training, and variable pay are used less frequently to motivate employees.

Question 14

Which term refers to any plan that ties pay to productivity or profitability?

Accepted Answer

The term variable pay refers to incentive plans that tie a group's or individual's pay to the firm's profitability or productivity. Piecework is a type of incentive plan that bases pay on output.

Question 15

Which term refers to an incentive plan in which a person is paid a sum for each item sold,with a strict proportionality between results and rewards regardless of output?

Accepted Answer

Piecework generally implies straight piecework, which entails a strict proportionality between results and rewards regardless of output. The term variable pay refers to incentive plans that tie a group's or individual's pay to the firm's profitability or productivity.

Question 16

Plans in which a corporation contributes shares of its own stock to a trust established to purchase shares of the firm's stocks for employees are known as ________.

Accepted Answer

Employee stock ownership plans (ESOPs) are company-wide plans in which the employer contributes shares of its own stock to a trust established to purchase shares of the firm's stock for employees. The firm generally makes these contributions annually in proportion to total employee compensation, with a limit of 15% of compensation.

Question 17

Angelo,a process engineer with Global Semiconductor,is following a technical path rather than a management path at the firm.Which of the following has most likely been implemented by Global Semiconductor?

Accepted Answer

Dual-career ladders are a way to manage professionals' pay. At many employers, a bigger salary requires rerouting from engineering to management. However, not all professionals want such paths. Therefore, many employers institute one path for managers, and another for technical experts, allowing the latter to earn higher pay without switching to management.

Question 18

Every month,Angela,a manager at a manufacturing facility,meets briefly with each of her subordinates and shows them a graph of their productivity on the assembly line.Which term best describes Angela's activity?

Accepted Answer

Performance feedback means providing quantitative or qualitative information on task performance to change or maintain performance; showing workers a graph of their performance trend is an example. A performance appraisal may involve showing productivity graphs but would involve more time and occur less frequently.

Question 19

Which of the following terms refers to any salary increase the firm awards to an individual employee based on his or her individual performance?

Accepted Answer