Question 1

If you had repair work done on your car,the compensation system the shop uses to pay the mechanics is most likely the ________ plan.

Accepted Answer

The standard hour compensation system is used in auto repair shops where each repair job is assigned a standard number of hours needed to complete the work. The mechanic is paid a fixed rate per hour, regardless of the time they actually take to complete the job. This system is considered fair to both the shop and the mechanic as it encourages the mechanic to work efficiently and complete jobs within the standard time frame, while also ensuring that they are paid fairly for their work.

Question 2

Standard hour plan is to Rowan plan as straight piecework is to ______________ plan.

Accepted Answer

Just like standard hour plan is a modification of Rowan plan, straight piecework is a modification of Taylor or Merrick plan. In Taylor or Merrick plan, workers are paid according to the number of pieces they produce, with no consideration for time taken or efficiency. This can sometimes result in low-quality work or workers rushing to complete tasks, which is why it is not commonly used.

Question 3

It is observed that _____ is/are commanding a larger share of the total compensation for all employee groups.

Accepted Answer

D

Question 4

Advantages of individual incentive plans include all of the following except:

Accepted Answer

The advantages of individual incentive plans include lowered production costs, less direct supervision, and higher productivity. However, there is no guarantee that greater trust between workers and management will be achieved through these plans. In fact, if the incentive plan is perceived as unfair or if management does not follow through on its promises, trust between workers and management may actually decrease.

Question 5

Variable pay as a percent of payroll is __ percent.

Accepted Answer

Variable pay as a percent of payroll is typically around 12 percent, as per industry standards and surveys.

Question 6

All of the following are true regarding merit pay except _______

Accepted Answer

Research has shown that removal of merit pay may lower satisfaction, but does not necessarily impact performance. The other options, A, C, and D, are all true regarding merit pay.

Question 7

Which of the following is not a problem with team compensation?

Accepted Answer

Consistency is generally considered a positive aspect of team compensation, as it ensures fairness and reliability in how team members are rewarded.

Question 8

Which of the following is not true of lump-sum bonuses?

Accepted Answer

The answer of Which of the following is not true...

Question 9

Surveys show the most popular type of variable pay plan is ____________

Accepted Answer

The answer of Surveys show the most popular type of...

Question 10

The authors argue that for merit pay to live up to its potential,all of the following should be done except _________

Accepted Answer

The authors do not argue for the use of more peer than supervisor raters as one of the necessary conditions for merit pay to live up to its potential.

Question 11

A _____ plan divides a task into simple actions and determines the time an average worker takes to complete each action.

Accepted Answer

The Bedeaux plan is a work measurement system that breaks down tasks into simple actions and assigns time values to each action, allowing for the calculation of the time an average worker would take to complete them.

Question 12

The common feature to all types of incentive plans is:

Accepted Answer

A standard of performance is the common feature to all types of incentive plans. Incentive plans are designed to motivate employees by tying their compensation to their level of performance. To do this effectively, there must be a clear standard of performance against which employees can be evaluated and rewarded. Without a performance standard, it would be difficult to determine how much incentive pay an employee should receive. Options B, C, and D may be features of some incentive plans, but they are not universal to all incentive plans.

Question 13

The most frequently used incentive system is the:

Accepted Answer

Straight piecework is the most frequently used incentive system because it is easy to understand and calculate, and it provides a direct correlation between individual effort and pay. The employee is paid a certain amount per unit produced, which motivates workers to produce more in order to earn more. The other options are less commonly used, with standard hour plan providing a flat rate per hour worked, Halsey 50-50 plan paying a bonus in addition to the hourly rate, and Taylor differential piece-rate plan paying different rates for different levels of performance.

Question 14

A penalty for poor performance rather than reward for good is an example of:

Accepted Answer

A reverse incentive plan penalizes poor performance instead of rewarding good performance.

Question 15

Which of the following is not true about individual spot awards?

Accepted Answer

The statement "A majority of companies do not feel that these awards are effective" is not true. In fact, individual spot awards are widely used and considered effective by many companies as a way to recognize exceptional performance and increase employee motivation and engagement.

Question 16

In which of the following incentive pay plans does the wage rate not increase for production above the standard?

Accepted Answer

The answer of In which of the following incentive pay...

Question 17

Paying a dime for every bottle collected and turned into a collection center is an example of:

Accepted Answer

Paying a dime for every bottle collected and turned into a collection center is an example of straight piecework, where the worker is paid based on the number of units produced or work completed. Commission-based work involves a percentage of sales or profits, while a standard hour-based work pays workers for the number of hours they work. A Rowan plan is a type of bonus plan based on the time saved by a worker's increased efficiency.

Question 18

Compensation security is highest for workers who fail to complete tasks within the standard time under the _____ plan?

Accepted Answer

The Gantt plan provides a guaranteed minimum wage, ensuring compensation security even if workers fail to complete tasks within the standard time.

Question 19

Usually _____ are awarded for exceptional performance,often on special projects or for performance that so exceeds expectations as to be deserving of an add-on bonus.

Accepted Answer

Individual spot awards are specifically given for exceptional performance, often on special projects, and are separate from regular merit pay or lump-sum bonuses. Variable pay awards and merit pay are more tied to overall performance or longevity with the company, while lump-sum bonuses may be given for a variety of reasons beyond just exceptional performance.

Question 20

An incentive system with three piecework rates is the _____ plan.

Accepted Answer

The answer of An incentive system with three piecework rates...

Quiz 10: Pay-For-Performance Plans