CHAPTER 11 - PART 1

1.

1 point

25) A firm should most likely use merit pay as an element of a(n):

A) team-based compensation plan.

C) equity-based compensation plan.

B) plantwide compensation plan.

D) individual-based compensation plan.

2.

1 point

49) ________ is a plantwide pay-for-performance plan which returns a portion of company savings to employees as a lump-sum bonus.

C) A merit increase

A) Gainsharing

B) A team-based plan

D) A profit-sharing plan

3.

1 point

27) 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

D) merit increase

C) promotion

B) award

4.

1 point

3) A key assumption behind pay-for-performance compensation is that:

B) the organization's performance depends on individuals' performance.

A) the importance of the job needs to be weighed in figuring the incentive.

D) accurate job evaluations and market surveys are critical to calculate incentives.

C) teams are not suitable "vehicles" for most corporate incentive programs.

5.

1 point

17) 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.

D) sewing machine operators paid for the number of pairs of pants they sew in a given work 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.

6.

1 point

33) Individual-based pay-for-performance are most likely to:

D) work against TQM at an organization.

A) provide employees with a broader understanding of an organization.

B) significantly enhance trust between management and labor.

C) give organizations compensation flexibility.

7.

1 point

32) An individual-based incentive compensation system has a number of disadvantages, such as:

C) placing employees at financial risk.

D) promoting too narrow of a job focus.

A) fostering social pressure to limit performance.

B) failing to address production goals.

8.

1 point

26) Merit pay differs from bonus programs in what way?

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.

B) Bonuses are nonfinancial rewards; merit pay is a financial reward.

9.

1 point

20) If a team is paid based on meeting its production goals, and each member of the team must contribute a minimal percentage toward that goal to share in the team award, then the pay-for-performance system is:

C) using other HRM programs at the same time.

B) promoting the belief that performance makes a difference.

A) promoting increased employee involvement in corporate growth.

D) using multiple layers of rewards.

10.

1 point

31) Which of the following is most likely true about individual-based compensation systems?

D) They match the individualistic culture of the U.S.

B) They provide tax advantages to manufacturers.

A) They facilitate performance measurement.

C) They promote independence from supervision.

11.

1 point

23) Healthy living incentives most likely benefit employers in all of the following ways EXCEPT by:

C) receiving tax breaks.

A) lowering health insurance premiums.

D) reducing worker stress.

B) reducing absenteeism.

12.

1 point

38) Perry wants employees with unique skills and backgrounds to be able to tackle common projects. Flexibility in work assignments is also very important to his firm. Perry's best choice of an incentive program, based on these factors, would be a(n):

B) team-based plan.

A) individual-based plan.

D) corporate-based plan.

C) plantwide plan.

13.

1 point

14) To minimize problems, a pay-for-performance plan should:

D) use a single-layer, simple program.

A) appropriately link pay and performance.

C) downplay the rewards to avoid an over-focus on productivity.

B) use pay-for-performance as a stand-alone program.

14.

1 point

45) Reservation Specialists are able to speed up their turnaround time with customers by suggesting that customers put their questions/complaints in writing. This results in the specialists beating their productivity "numbers," but has buried the correspondence specialists in paperwork, destroying their productivity. This is an example of the team-based compensation plan drawback of:

B) the social pressure to limit performance.

A) the difficulties of identifying meaningful groups.

C) the free-riding effect.

D) intergroup competition.

15.

1 point

9) Most employees at Sterling Enterprises work on a team. The firm is considering the implementation of a pay for performance plan. Which of the following would be the most likely challenge of such a plan?

A) Establishing an HR scorecard for each team

C) Separating individual contributions from team contributions

B) Isolating individual control over work processes

D) Creating a psychological contract between teams and the firm

16.

1 point

19) What is the most popular incentive given by employers?

C) Restaurant gift cards

D) Consumer electronics

A) Company cars

B) Exotic vacations

17.

1 point

36) Bowen Productions wants to increase the flexibility of its workforce while increasing productivity and cooperation. Bowen would be best served by a(n):

B) team-based plan.

C) plantwide plan.

D) corporate-based plan.

A) individual-based plan.

18.

1 point

7) What is the primary concern about physicians receiving incentives from pharmaceutical firms and state governments?

C) Private health insurance becoming unaffordable.

B) Doctors placing financial gain ahead of patient care.

D) Medicare and Medicaid running out of money.

A) Doctors and nurses lacking time to see the most needy patients.

19.

1 point

46) Team-based incentive plans work best when:

C) the contributions of individuals can be accurately isolated.

A) the goal is encouraging innovation within groups.

B) individual employees are performance-goal oriented.

D) cooperation is less important than internal competition.

20.

1 point

30) 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.

21.

1 point

18) Which of the following is LEAST likely to cause the failure of a pay-for-performance program?

B) High-tech firms using piece-rate plans

A) HR hiring unskilled employees

C) Employees failing to received adequate training

D) Managers lacking performance appraisal training

22.

1 point

40) Which of the following is an advantage of team-based pay-for-performance plans?

C) They encourage individual productivity.

A) They encourage independence among employees.

D) They allow for financial flexibility.

B) They make performance measurement easier.

23.

1 point

43) Which of the following is the most likely problem of using team-based pay-for-performance plans?

C) Intergroup competition causes a performance decline.

A) Employees' retirement funds are put at risk.

B) Group cohesiveness is severely limited.

D) Managers have difficulty appraising group performance.

24.

1 point

42) In any group, some individuals put in more effort than others. On occasion, the contribution is markedly less than the average of the rest of the team. The most appropriate term for this is:

D) job autonomy.

A) limited group cohesiveness.

C) single-mindedness.

B) the free-riding effect.

25.

1 point

5) 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:

B) the "do only what you get paid for" syndrome.

C) negative psychological contracts.

A) the negative effects of pay-for-performance on the spirit of cooperation.

D) an increase of intrinsic drives.

26.

1 point

10) David is frustrated at his company's inability to maintain a single system of pay-for-performance and is finding it difficult to adapt to new policies. David is probably:

A) encountering dissonance with his psychological contract.

C) suffering from the "do only what you get paid for" syndrome.

D) receiving only financial rewards rather than nonfinancial rewards.

B) recognizing an increase in his short-term intrinsic drives.

27.

1 point

4) 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.

D) Employee intrinsic drives are reinforced.

C) Pay is closely tied to specific performance indicators.

B) Employees help develop a pay-for-performance strategy.

28.

1 point

7) Felix Enterprises has relatively few levels of hierarchy, and the firm's technology lends itself to breaking employees into self-contained groups. The workforce is highly committed and intrinsically motivated by their work. These conditions most likely lend themselves to a:

A) plantwide incentive program.

B) gainsharing incentive program.

D) corporate-based incentive program.

C) team-based incentive program.

29.

1 point

22) Which of the following would most likely enhance the perceived fairness of a pay-for-performance system?

C) Managers implementing a process for making appeals

A) Employees receiving variable and base pay

D) Managers strictly limiting the amount of employee input

B) Employees making final decisions on the system design

30.

1 point

11) If a firm frequently changes the basis of its pay-for-performance system, it will most likely:

A) diminish its credibility gap.

D) increase employees' intrinsic drive to perform beyond expectations.

C) generate fear among employees due to a lack of control.

B) violate its psychological contract with employees.

31.

1 point

16) 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.

D) piece-rate system.

C) merit pay system.

32.

1 point

41) Dan, Laura, and Chuck are preparing a poster presentation for an upcoming business conference. Laura and Chuck have each dedicated over 10 hours to the task. Dan has contributed about 2 hours to the project, but he will receive equal credit with Laura and Chuck for the project's completion. In HR terms, Dan is:

A) a free-rider.

C) a lesser-contributor.

D) negligent.

B) experience deficient.

33.

1 point

24) Public and nonpublic praise, honorary titles, and expanded job responsibilities are all examples of:

D) employee services.

C) nonfinancial rewards.

A) financial rewards.

B) lump-sum payments.

34.

1 point

12) In most firms, pay-for-performance compensation systems experience a credibility gap among approximately ________ of employees.

C) 50%

A) 15%

D) 75%

B) 25%

35.

1 point

39) You want to foster group cohesiveness and facilitate performance measurement. An incentive program that would most likely help you do this would be:

A) gainsharing.

C) a corporate-based plan.

B) a plantwide plan.

D) a team-based plan.

36.

1 point

6) Resources, Inc. has recently increased its emphasis on pay-for-performance. Within the last several months, there has been a sharp increase in employee competition and the sabotaging of projects. The incentive plan has most likely:

C) discouraged employee cooperation.

B) decreased personal motivation.

A) expanded the credibility gap.

D) diminished managerial powers over subordinates.

37.

1 point

50) Which of the following plantwide plans incorporates the ideas of employees, union leaders, and top managers to generate cost-saving ideas?

A) Improshare

C) Scanlon plan

B) Rucker plan

D) McGregor plan

38.

1 point

21) If managers increase employee involvement in the design of an incentive compensation system, which of the following will most likely occur?

A) Employees will be more committed to the plan.

C) Employees' intrinsic drives will be sharply reduced.

D) Managers will be better able to evaluate performance.

B) Managers will spend more time in conflict resolution.

39.

1 point

35) Pay-for-performance plans are more likely to succeed when:

D) customers complete service questionnaires.

A) cooperation is critical to success.

B) an employee's job demands autonomy.

C) a firm utilizes cross-functional teams.

40.

1 point

34) Which of the following is LEAST associated with the failure of individual-based pay-for-performance systems?

C) Managers and employees disagree on the evaluation.

D) The job is primarily knowledge-based.

B) Supervisors manipulate employee ratings.

A) Performance appraisals are used for only one purpose.

41.

1 point

8) Lantech, a small manufacturer discussed in your text, ended its pay-for-performance program because of:

B) ethical violations that led to employee lawsuits.

C) increases in employee conflicts and stress.

A) problems linking group and individual incentives.

D) excessive union involvement.

42.

1 point

48) How does plantwide pay-for-performance work?

A) Employees are rewarded for quality improvements.

C) Employees are divided into teams that receive rewards based on team performance.

D) Employees receive bonuses based on the corporation's stock market performance.

B) Employees receive a portion of the firm's cost savings.

43.

1 point

28) Which of the following best explains why individual-based incentive plans work?

B) Maslow's hierarchy

D) Achievement theory

C) Expectancy theory

A) Equity theory

44.

1 point

1) 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.

45.

1 point

13) Which of the following best explains the findings of the Kaiser Permanente Northern California study?

A) External rewards decrease internal motivation and performance.

C) Incentive plans increase productivity but lower overall job satisfaction.

B) Nonmonetary rewards are less motivating than monetary rewards.

D) Employee performance increases linearly with increased monetary rewards.

46.

1 point

37) When implementing a team-based compensation plan, a firm would most likely:

B) reward the best performer on each team.

A) allow team members to distribute rewards.

D) use bonuses or noncash rewards.

C) assess performance with narrow criteria.

47.

1 point

15) What is the main requirement for the successful implementation of a piece-rate plan?

D) Outsourcing most tasks to overseas organizations.

C) Giving employees control of work pace and quality.

B) Limiting labor union influences and regulations.

A) Training managers on the employee's work process.

48.

1 point

29) Expectancy theory claims that:

C) individuals who do not set goals are more intrinsically motivated than those who do set goals.

B) people tend to perform activities that will be rewarded.

D) employers that reward employees may not gain any increase in quality or efficiency in productivity.

A) people are usually consistent in their performance.

49.

1 point

2) What is the most common type of pay for performance used by firms?

B) Bonuses

C) Stock options

A) Perks

D) Nonmonetary rewards

50.

1 point

44) All of the following are disadvantages associated with team-based pay-for-performance plans EXCEPT:

D) intergroup competition.

C) the free-riding effect.

A) difficulties identifying meaningful groups.

B) diminishing quality goals.