Major Challenges
Dealing with Potential Problems
Types of Pay for Performance Plans
Designing Pay for Performance Plans
Rewarding Excellence in Customer Service
100
It is most likely true that the use of pay-for-performance systems is: A) increasing rapidly around the world. B) declining due to implementation problems. C) failing to motivate employees as employers had expected. D) increasing slowly among small businesses in the high-tech industry.
A) increasing rapidly around the world.
100
What is the most popular incentive given by employers? A) Company cars B) Exotic vacations C) Restaurant gift cards D) Consumer electronics
D) Consumer electronics
100
A firm is offering a one-time tangible prize to the employee who receives the highest customer service evaluation in a particular month. This company is using a(n) ________ incentive. A) bonus B) award C) promotion D) merit increase
B) award
100
Approximately ________ of companies reward their executives with short-term year-end bonuses. A) 25% B) 40% C) 75% D) 90%
D) 90%
100
A survey of 1,400 employers showed that ________ of them factor customer satisfaction into their calculation of incentive payments to employees. A) 75% B) 55% C) 35% D) 15%
C) 35%
200
What is the most common type of pay for performance used by firms? A) Perks B) Bonuses C) Stock options D) Nonmonetary rewards
B) Bonuses
200
Marianne is binding biology notes at a university bookstore. She is paid based upon the number of note packs she binds in a day. Marianne is compensated on a: A) gainsharing system B) bonus reward system. C) merit pay system. D) piece-rate system.
D) piece-rate system.
200
Which of the following best explains why individual-based incentive plans work? A) Equity theory B) Maslow's hierarchy C) Expectancy theory D) Achievement theory
C) Expectancy theory
200
In general, perquisites are: A) part of team-based pay-for-performance plans. B) offered to top-performing employees at all levels. C) nonmonetary incentives awarded to executives. D) are not well received by most executives.
C) nonmonetary incentives awarded to executives.
200
Look! A freebie!
Fletcher is awesome!
300
The "do only what you get paid for" syndrome is a potential problem tied to which of the following conditions? A) Companies do not use a pay-for-performance strategy. B) Employees help develop a pay-for-performance strategy. C) Pay is closely tied to specific performance indicators. D) Employee intrinsic drives are reinforced.
C) Pay is closely tied to specific performance indicators.
300
What is the main requirement for the successful implementation of a piece-rate plan? A) Training managers on the employee's work process. B) Limiting labor union influences and regulations. C) Giving employees control of work pace and quality. D) Outsourcing most tasks to overseas organizations.
C) Giving employees control of work pace and quality.
300
A firm should most likely use merit pay as an element of a(n): A) team-based compensation plan. B) plantwide compensation plan. C) equity-based compensation plan. D) individual-based compensation plan.
D) individual-based compensation plan.
300
Most companies use a ________ when setting up their sales compensation plan. A) straight commission plan B) combination plan C) straight salary plan D) gainsharing plan
B) combination plan
300
And another freebie!
I am going to study harder to the upcoming Celebration.
400
Camara and Jose always ask the professor in their American Government class exactly what will be on the next exam. They ask this question so that they can study for no more than they absolutely must. This is an example of: A) the negative effects of pay-for-performance on the spirit of cooperation. B) the "do only what you get paid for" syndrome. C) negative psychological contracts. D) an increase of intrinsic drives.
B) the "do only what you get paid for" syndrome.
400
Piece-rate pay-for-performance would most likely work well with: A) secretaries who also fill in as receptionists paid for the amount of correspondence they type each day. B) police officers paid for the number of arrests they make for drunk driving during a single month. C) school teachers paid on the basis of the number of students who have passed standardized tests. D) sewing machine operators paid for the number of pairs of pants they sew in a given work day.
D) sewing machine operators paid for the number of pairs of pants they sew in a given work day.
400
Which of the following is an advantage of individual-based pay-for-performance plans? A) Quality goals and production goals are accomplished. B) Rewarded performance is likely to be repeated. C) Flexibility is enhanced among supervisors. D) Equity is relatively easy to achieve.
B) Rewarded performance is likely to be repeated.
400
Which of the following is the LEAST likely result of using long-term income incentives to reward CEOs? A) Frequent CEO turnover B) Soaring CEO pay increases C) CEO options losing value when stock market falls D) Unclear connection between CEO pay and firm performance
A) Frequent CEO turnover
400
If a sales manager wants his sales professionals to service the product and spend time with customers, then a straight salary compensation plan is best.
Yep
500
A key assumption behind pay-for-performance compensation is that: A) the importance of the job needs to be weighed in figuring the incentive. B) the organization's performance depends on individuals' performance. C) teams are not suitable "vehicles" for most corporate incentive programs. D) accurate job evaluations and market surveys are critical to calculate incentives.
B) the organization's performance depends on individuals' performance.
500
To minimize problems, a pay-for-performance plan should: A) appropriately link pay and performance. B) use pay-for-performance as a stand-alone program. C) downplay the rewards to avoid an over-focus on productivity. D) use a single-layer, simple program.
A) appropriately link pay and performance.
500
Merit pay differs from bonus programs in what way? A) Merit pay raises the employee's base pay permanently; bonuses do not. B) Bonuses are nonfinancial rewards; merit pay is a financial reward. C) Merit pay is disbursed several times a year; bonuses are given on a yearly basis. D) Bonuses are used much less often than merit pay in individual-based pay plans.
A) Merit pay raises the employee's base pay permanently; bonuses do not.
500
Which of the following is the LEAST likely reason for the distance between executive performance and long-term incentives? A) Executives rarely know how much their equity in the firm is worth. B) Executives are unlikely to have control over the value of the company's stock. C) Incentive plans are not always consistent with the firm's long-term strategic objectives. D) Golden parachutes fail to address what to pay executives when they are terminated from a firm.
D) Golden parachutes fail to address what to pay executives when they are terminated from a firm.
500
A straight-salary sales compensation plan has a tendency to encourage salespeople to emphasize sales volume over customer service.
Nope
M
e
n
u