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Exam 10: Pay-For-Performance Plans

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Question 21

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Maxwell Construction Corp.employs a lot of uneducated laborers.The company wants to introduce a variable-pay plan that is easy to understand and does not cost much to administer.Which of the following variable-pay plans is Maxwell most likely to introduce?

A) Balanced scorecard plan
B) Gain-sharing plan
C) Stock ownership plan
D) Cash profit sharing plan

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Question 22

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A fast and efficient worker would earn more money under a Rowan plan than under a Halsey 50-50.

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Question 23

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TreeDen Corp.experiences an increase in employee turnover rate.Upon investigating, it discovers that employees are dissatisfied with the company's pay.Employees cannot see a direct link between their performance and their pay.They are also unhappy about having to pay out of their pockets to obtain grants.In this case, TreeDen is most likely using a _____.

High performance ratings are nearly always statistically related to high merit increases.

The free-rider problem is common in firms using individual incentive plans.

_____ have the disadvantage of requiring employees to spend money to obtain their incentive.

When a firm is _____ on business risk, and its outcomes are _____, its performance is more likely to be higher without any incentive plans.

The trend in recent variable-pay design is to combine the best of _____ and _____ plans.

Which of the following is the most commonly used team incentive performance standard?

Gain-sharing plans do not to use a historical standard to set productivity standards since environmental conditions can change quickly.

A group performance-based pay plan is superior to an individual plan when production methods and labor mix must change to meet changing pressures.

Unions prefer individual incentive pay plans to group incentive pay plans since members can earn more money.

If you had repair work done on your car, the shop most likely used the _____ plan to pay the mechanic.

Employees working under individual incentive plans tend to resist the introduction of new technology.

Merit pay is a pay-for-performance plan used for more than three-quarters of all exempt, clerical, and administrative employees.

Surveys show the most popular type of variable pay plans are _____.

Menthorp Inc.wants to design a variable-pay plan that fosters teamwork and business knowledge of its employees.In order to ensure maximum motivation, Menthorp wants its variable-pay plan to show a clear performance-reward link.Which of the following plans is most suitable for Menthorp?

Which of the following is NOT true of merit bonuses?

Standard hour plans are better for nonrepetitive jobs requiring numerous skills for completion.

In gain-sharing plan formulas, _____ are in the numerator and _____ are in the denominator.