Question 1

In 2014,a company employee received an option to purchase the company's stock at $45 per share.If the stock is trading at $40 a share in 2016,the employee will most likely:

Accepted Answer

A)   exercise the option, receiving a gain of $5.
B)   exercise the option, receiving a gain of $40.
C)   not bother to exercise the options.
D)   buy the stock at $45 per share.
E)   sell the shares to a third party slightly above the market price.F) D) and E)
G) C) and D)

Question 2

Which of the following incentive plans would enable its employees to think like owners,taking a broad view of what they need to do in order to make the organization more effective?

Accepted Answer

A)   Merit pay
B)   Gain sharing
C)   The Scanlon plan
D)   Performance bonuses
E)   Profit sharingF) C) and E)
G) A) and C)

Question 3

As an incentive to work efficiently,some organizations pay production workers a _____,a wage based on the amount they produce.

Accepted Answer

A)   merit pay
B)   sales commission
C)   standard hour pay
D)   piecework rate
E)   special bonusF) B) and D)
G) A) and E)

Question 4

Group bonuses typically reward the performance of all employees in an organization.

Accepted Answer

A) True 
 B)False

Question 5

Developed in the 1930s,the Scanlon plan is a variation of the:

Accepted Answer

A)   profit sharing plans.
B)   gainsharing plans.
C)   merit pay plans.
D)   individual bonus plans.
E)   commission plans.F) B) and E)
G) D) and E)

Question 6

Which of the following statements is true about standard hour plans?

Accepted Answer

A)   They encourage employees to focus exclusively on customer service.
B)   They succeed only for employees who are not motivated by money.
C)   They encourage employees to focus mainly on quality.
D)   In terms of their pros and cons, they are very different from piecework plans.
E)   They encourage employees to work as fast as they can.F) A) and C)
G) B) and C)

Question 7

Johan,a manager of a construction company,believes that a piecework plan benefits all types of work areas.However,his colleague,George,argues that a piecework plan is not suitable for a few complex jobs and that it might have a negative impact on the work production.Which of the following statements,if true,strengthens George's argument?

Accepted Answer

A)   It is easy to measure the output of managers using a piecework plan.
B)   A piecework plan is not suitable for very routine, standardized jobs.
C)   Complex jobs involve the coordination of many team members to complete tasks.
D)   Using a piecework plan helps employee empowerment.
E)   Incentive plans do not impact productivity when work involves complex jobs.F) A) and C)
G) B) and E)

Question 8

Alan,a manager at Conephase,decides to sell his shares at the current market value.He had purchased the stock at $20 per share a few years ago.However,the current market rate per share is $15.In this case,Alan should:

Accepted Answer

A)   avoid selling the stock and wait for the market value to be higher than $20.
B)   ask a lower-level employee to purchase the stocks at his price.
C)   apply the Scanlon plan.
D)   negotiate with stock market authorities to increase the market value.
E)   sell his shares at the current rate or wait for the rate decrease.F) A) and B)
G) C) and D)

Question 9

A multi-national organization uses a gainsharing program in which employees receive a bonus if the ratio of labor costs to the sales value of production is below a set standard.This incentive plan is referred to as the:

Accepted Answer

A)   group bonus.
B)   merit pay plan.
C)   Scanlon plan.
D)   piecework rate.
E)   team award.F) B) and C)
G) None of the above

Question 10

Employee participation in pay-related decisions can be part of a general move toward:

Accepted Answer

A)   employee empowerment.
B)   centralized decision making.
C)   self ownership.
D)   high power distance.
E)   federalism.F) C) and D)
G) A) and E)

Question 11

From employers' perspective,an advantage of merit pay is that it is cheap.

Accepted Answer

A) True 
 B)False

Question 12

Retention bonuses are one-time incentives paid to top managers,engineers,top-performing salespeople,and information technology specialists in exchange for remaining with the company.

Accepted Answer

A) True 
 B)False

Question 13

Ashance Inc.,a manufacturing company,includes bonuses based on the year's profits or other measures related to the organization's goals as an incentive method.Sometimes,to gain tax advantages,the actual payment of the bonus is deferred.Which of the following is being exemplified in this scenario?

Accepted Answer

A)   Long-term incentive
B)   Balanced scorecard
C)   Piecework plan
D)   Employee stock incentive plan
E)   Short-term incentiveF) A) and E)
G) D) and E)

Question 14

Which of the following incentive programs measures improvements in productivity and effectiveness and distributes a portion of the earnings to all employees?

Accepted Answer

A)   Merit pay
B)   Team award
C)   Commission
D)   Standard hour plans
E)   GainsharingF) A) and C)
G) C) and D)

Question 15

_____ gives the biggest pay increases to the best performers and to those whose pay is relatively low for their job.

Accepted Answer

A)   Piecework pay system
B)   Merit pay system
C)   Standard hour plan
D)   Differential plan
E)   Skill-based planF) All of the above
G) B) and C)

Question 16

Which of the following is a disadvantage of using incentive plans?

Accepted Answer

A)   The goals of an incentive plan may interfere with other management goals.
B)   The goals of incentive plans can seldom be linked to particular outcomes or behaviors.
C)   Incentive plans cannot be used to promote group and organizational performance.
D)   Incentive plans cause dissatisfaction among the non-performing employees in the organization.
E)   Incentive plans are not very effective for jobs other than sales and service.F) C) and D)
G) B) and E)

Question 17

An organization wants to provide its employees information about what its goals are and what it expects employees to accomplish.It is planning to implement an incentive plan that helps employees understand the organization's goals.Which of the following should be used by this organization?

Accepted Answer

A)   A retention bonus
B)   A piecework rate system
C)   A merit pay system
D)   The Scanlon plan
E)   A balanced scorecardF) C) and E)
G) A) and E)

Question 18

Incentive pay is specifically designed to energize,direct,or control employees' behavior and is influential because the amount paid is linked to certain predefined behaviors or outcomes.

Accepted Answer

A) True 
 B)False

Question 19

Employee stock ownership plans (ESOPs) are attractive to employers.Along with tax and financing advantages,ESOPs give employers a way to build pride in and commitment to the organization.Which of the following statements weakens this argument?

Accepted Answer

A)   Employees are not allowed to participate in general body meetings as shareholders.
B)   The stocks within the trust are too widely diversified to earn high returns.
C)   The stock earnings are taxed at high rates.
D)   Employees are forced to return the stock profits to the organization.
E)   Risks involved will directly affect employees' retirement income.F) A) and E)
G) None of the above

Question 20

Which of the following is an organization-level incentive plan that is intended to motivate employees to align their activities with the organization's goals?

Accepted Answer

A)   Profit sharing
B)   Gainsharing
C)   Merit pay
D)   Group bonus
E)   Scanlon planF) B) and E)
G) C) and D)

Exam 13: Recognizing Employee Contributions With Pay

Which of the following statements is true about standard hour plans?

Correct Answer
verified

Which of the following incentive programs measures improvements in productivity and effectiveness and distributes a portion of the earnings to all employees?

Correct Answer
verified

An organization wants to provide its employees information about what its goals are and what it expects employees to accomplish.It is planning to implement an incentive plan that helps employees understand the organization's goals.Which of the following should be used by this organization?

Correct Answer
verified

Which of the following incentive plans would enable its employees to think like owners,taking a broad view of what they need to do in order to make the organization more effective?

Correct Answer
verified

Correct Answer
verified

In 2014,a company employee received an option to purchase the company's stock at $45 per share.If the stock is trading at $40 a share in 2016,the employee will most likely:

Correct Answer
verified

Employee stock ownership plans (ESOPs) are attractive to employers.Along with tax and financing advantages,ESOPs give employers a way to build pride in and commitment to the organization.Which of the following statements weakens this argument?

Correct Answer
verified

From employers' perspective,an advantage of merit pay is that it is cheap.

Correct Answer
verified

Employee participation in pay-related decisions can be part of a general move toward:

Correct Answer
verified

A multi-national organization uses a gainsharing program in which employees receive a bonus if the ratio of labor costs to the sales value of production is below a set standard.This incentive plan is referred to as the:

Correct Answer
verified

Ashance Inc.,a manufacturing company,includes bonuses based on the year's profits or other measures related to the organization's goals as an incentive method.Sometimes,to gain tax advantages,the actual payment of the bonus is deferred.Which of the following is being exemplified in this scenario?

Correct Answer
verified

As an incentive to work efficiently,some organizations pay production workers a _____,a wage based on the amount they produce.

Correct Answer
verified

Alan,a manager at Conephase,decides to sell his shares at the current market value.He had purchased the stock at $20 per share a few years ago.However,the current market rate per share is $15.In this case,Alan should:

Correct Answer
verified

Which of the following is a disadvantage of using incentive plans?

Correct Answer
verified

Developed in the 1930s,the Scanlon plan is a variation of the:

Correct Answer
verified

Group bonuses typically reward the performance of all employees in an organization.

Correct Answer
verified

Incentive pay is specifically designed to energize,direct,or control employees' behavior and is influential because the amount paid is linked to certain predefined behaviors or outcomes.

Correct Answer
verified

Retention bonuses are one-time incentives paid to top managers,engineers,top-performing salespeople,and information technology specialists in exchange for remaining with the company.

Correct Answer
verified

_____ gives the biggest pay increases to the best performers and to those whose pay is relatively low for their job.

Correct Answer
verified

Which of the following is an organization-level incentive plan that is intended to motivate employees to align their activities with the organization's goals?

Correct Answer
verified

Exam 13: Recognizing Employee Contributions With Pay

Which of the following statements is true about standard hour plans?

Correct AnswerverifiedShow Answer

Which of the following incentive programs measures improvements in productivity and effectiveness and distributes a portion of the earnings to all employees?

Correct AnswerverifiedShow Answer

An organization wants to provide its employees information about what its goals are and what it expects employees to accomplish.It is planning to implement an incentive plan that helps employees understand the organization's goals.Which of the following should be used by this organization?

Correct AnswerverifiedShow Answer

Which of the following incentive plans would enable its employees to think like owners,taking a broad view of what they need to do in order to make the organization more effective?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

In 2014,a company employee received an option to purchase the company's stock at $45 per share.If the stock is trading at $40 a share in 2016,the employee will most likely:

Correct AnswerverifiedShow Answer

Employee stock ownership plans (ESOPs) are attractive to employers.Along with tax and financing advantages,ESOPs give employers a way to build pride in and commitment to the organization.Which of the following statements weakens this argument?

Correct AnswerverifiedShow Answer

From employers' perspective,an advantage of merit pay is that it is cheap.

Correct AnswerverifiedShow Answer

Employee participation in pay-related decisions can be part of a general move toward:

Correct AnswerverifiedShow Answer

A multi-national organization uses a gainsharing program in which employees receive a bonus if the ratio of labor costs to the sales value of production is below a set standard.This incentive plan is referred to as the:

Correct AnswerverifiedShow Answer

Ashance Inc.,a manufacturing company,includes bonuses based on the year's profits or other measures related to the organization's goals as an incentive method.Sometimes,to gain tax advantages,the actual payment of the bonus is deferred.Which of the following is being exemplified in this scenario?

Correct AnswerverifiedShow Answer

As an incentive to work efficiently,some organizations pay production workers a _____,a wage based on the amount they produce.

Correct AnswerverifiedShow Answer

Alan,a manager at Conephase,decides to sell his shares at the current market value.He had purchased the stock at $20 per share a few years ago.However,the current market rate per share is $15.In this case,Alan should:

Correct AnswerverifiedShow Answer

Which of the following is a disadvantage of using incentive plans?

Correct AnswerverifiedShow Answer

Developed in the 1930s,the Scanlon plan is a variation of the:

Correct AnswerverifiedShow Answer

Group bonuses typically reward the performance of all employees in an organization.

Correct AnswerverifiedShow Answer

Incentive pay is specifically designed to energize,direct,or control employees' behavior and is influential because the amount paid is linked to certain predefined behaviors or outcomes.

Correct AnswerverifiedShow Answer

Retention bonuses are one-time incentives paid to top managers,engineers,top-performing salespeople,and information technology specialists in exchange for remaining with the company.

Correct AnswerverifiedShow Answer

_____ gives the biggest pay increases to the best performers and to those whose pay is relatively low for their job.

Correct AnswerverifiedShow Answer

Which of the following is an organization-level incentive plan that is intended to motivate employees to align their activities with the organization's goals?

Correct AnswerverifiedShow Answer

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