Question 1

In which of the following situations would it be LEAST appropriate to use an incentive plan?

Accepted Answer

Incentive plans are less effective when employees are unskilled, as their lack of skills may prevent them from increasing productivity, even if they are motivated.

Question 2

With which type of gainsharing plan bases employee bonuses on the difference between the number of labor hours a firm should have used with the number of labor hours actually used during a specific period?

Accepted Answer

This type of gainsharing plan is called Improshare, which stands for "improved productivity through sharing." The plan is designed to reward employees for finding ways to reduce the amount of labor necessary to reach a given level of production. The bonus is based on the difference between the standard labor hours that would have been needed to produce a given level of output and the actual labor hours used during a specific period. This plan aims to motivate workers to be more efficient and productive.

Question 3

How often do most firms tend to compute financial performance measures used in gainsharing plans?

Accepted Answer

The answer of How often do most firms tend to...

Question 4

What is the most common form of payment in gainsharing plans?

Accepted Answer

Cash is the most common form of payment in gainsharing plans. This is because it provides immediate and tangible rewards to employees for their contributions to improving productivity and reducing costs. Other forms of payment, such as stock options or vacation time, may be more complicated or less desirable for employees.

Question 5

Behavior modification is based on the idea that people will repeat behavior for which they are punished.

Accepted Answer

Behavior modification is actually based on the idea that people will repeat behavior for which they are rewarded, not punished.

Question 6

When developing the involvement system for a gainsharing plan,which of the following is NOT a commonly used element?

Accepted Answer

Employee mediations are not commonly used as an element in gainsharing plans. Steering committees, update meetings, suggestion systems, and problem-solving teams are commonly used methods for involving employees in gainsharing programs.

Question 7

Company-wide 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

The described company-wide plans are known as employee stock ownership plans, which allow employees to own a portion of the company's stock through a trust. This can serve as an incentive for employees and can also provide certain tax benefits for the corporation.

Question 8

According to Vroom's theory,if expectancy,instrumentality,or valence is equal to zero,there will be no employee motivation.

Accepted Answer

According to Vroom's expectancy theory, motivation is the product of expectancy, instrumentality, and valence. If any one of these factors is zero, then motivation will be zero. Therefore, if expectancy, instrumentality, or valence is equal to zero, there will be no employee motivation.

Question 9

What type of gainsharing plan determines employee bonuses by dividing payroll expenses by total sales?

Accepted Answer

The Scanlon plan is a gainsharing program that calculates bonuses based on the ratio of labor costs to sales value of production, encouraging employees to improve productivity and efficiency.

Question 10

According to Maslow's theory,a manager will not be able to motivate an employee with challenging tasks if the employee does not make enough money to pay for basic necessities.

Accepted Answer

Maslow's hierarchy of needs states that basic physiological and safety needs such as food, shelter, and financial security must be met before an individual can be motivated by higher-order needs such as self-esteem or self-actualization. Therefore, if an employee is struggling to meet basic needs due to low pay, challenging tasks will not be a motivating factor.

Question 11

All of the following are essential in order for incentive plans to be effective EXCEPT ________.

Accepted Answer

The answer of All of the following are essential in...

Question 12

The work of Edward Deci suggests that managers should primarily rely on extrinsic rewards to motivate employees.

Accepted Answer

Edward Deci's research suggests that intrinsic motivation is more effective than extrinsic rewards in motivating employees. Therefore, managers should focus on creating an environment that supports employees' autonomy, competence, and relatedness to their work, rather than relying solely on external rewards.

Question 13

According to Herzberg's motivation theory,good working conditions will prevent dissatisfaction but will not lead to feelings of satisfaction.

Accepted Answer

According to Herzberg's motivation theory, good working conditions, such as comfortable surroundings and adequate tools and equipment, will prevent dissatisfaction (hygiene factors), but they will not necessarily lead to feelings of satisfaction or motivation. Satisfaction and motivation come from factors such as recognition, achievement, responsibility, and personal growth (motivational factors).

Question 14

Research indicates that employee stock ownership plans may ________.

Accepted Answer

Research suggests that employee stock ownership plans (ESOPs) increase employee commitment and motivation. This is because employees have a vested interest in the success of the company since they own a portion of the company through their ESOPs. This can lead to improved productivity and job satisfaction among employees. ESOPs may also improve communication between employees and employers, but this is not the primary benefit of ESOPs. ESOPs do not necessarily encourage employees to retire too early or place firms at greater risk for employee lawsuits. ESOPs may have some impact on transparency within global organizations, but this is not a key benefit of ESOPs.

Question 15

Herzberg's Hygiene-Motivator theory is based on Maslow's hierarchy of needs.

Accepted Answer

Herzberg's theory builds upon Maslow's idea that lower-level needs must be met before higher-level needs become motivating factors. However, Herzberg believed that certain factors (called hygiene factors) such as job security, working conditions, and salary were necessary but not sufficient for motivation, whereas other factors (called motivators) such as achievement, recognition, and the work itself were the true sources of motivation.

Question 16

Robert Katz popularized the use of financial incentives for workers whose production exceeds some predetermined standard.

Accepted Answer

Frederick Taylor popularized the use of financial incentives in the late 1800s.

Question 17

Which of the following is the primary benefit of employee stock ownership plans?

Accepted Answer

Employee stock ownership plans (ESOPs) allow firms to borrow against the stock held in trust, providing a financing benefit.

Question 18

Vroom's expectancy theory observes that people will not pursue rewards that they find unattractive or where their chances of success are very low.

Accepted Answer

Vroom's expectancy theory suggests that individuals are motivated to pursue rewards that they find attractive and that they believe they have a reasonable chance of obtaining. They are less likely to pursue rewards that they do not find appealing or where their perceived chance of success is low.

Question 19

In Herzberg's Hygiene-Motivator theory,working conditions are motivator factors,and challenging assignments are hygiene factors.

Accepted Answer

In Herzberg's theory, hygiene factors are the basic necessities that must be met for job satisfaction (such as salary, working conditions), while motivator factors are factors that contribute to job satisfaction and higher performance (such as challenging assignments, recognition).

Question 20

Most firms link employees' pay to performance because financial incentives are extremely successful at motivating employees to perform above required standards.

Accepted Answer

Studies suggest that employees don't see a strong connection between pay and performance, and their performance is not particularly influenced by the company's incentive plan. About 83% of companies with such programs say their programs are only somewhat successful or not successful at all.

Quiz 12: Pay for Performance and Financial Incentives