Multiple Choice
Identify the choice that best completes the statement or
answers the question.
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1.
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“Pay for Performance” refers to a wide range of compensation options
EXCEPT for:
a. | bonuses | b. | salary | c. | salary
commissions | d. | team incentives | e. | merit based pay |
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2.
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All of the following are advantages of incentive pay plans EXCEPT for:
a. | they are variable costs linked to achievement of results | b. | incentives are paid
if objectives are met; if objectives are not achieved, incentives are withheld | c. | they respond to
employee needs | d. | incentives foster teamwork | e. | incentives distribute success to those who
produce that success |
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3.
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Which one of the following is NOT a performance measure that would be rewarded
with an incentive:
a. | quality of product/service | b. | cost control | c. | Productivity | d. | customer satisfaction | e. | Motivation |
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4.
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Which one of the following is NOT an individual incentive:
a. | bonus | b. | piecework | c. | commissions | d. | merit pay | e. | stock
options |
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5.
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The following are problems with merit pay plans EXCEPT for:
a. | managers may have little guidance in defining and measuring
performance | b. | there may not be a clear link between employee effort and performance and merit
pay | c. | the employee may believe that organizational politics are a factor in merit pay
decisions | d. | merit pay systems are too specific in award criteria | e. | lack of honesty and
cooperation between management and employees |
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6.
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A “double track wage system” is found in which type of pay
plan:
a. | sales incentives plans | b. | management plans | c. | piece rate
plans | d. | professional employee plans | e. | all of the
above |
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7.
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“Balanced scorecards” are yardsticks that:
a. | are focused on short term financial results only | b. | allow companies to
focus on building future economic value | c. | measure inputs and outcomes | d. | all of the
above | e. | none of the above |
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8.
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All of the following are criteria typically used to set team performance
measures EXCEPT:
a. | increased waste product | b. | improvements in efficiency | c. | improved product
quality | d. | reduction in material or labour costs |
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9.
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An advantage of team incentive plans is:
a. | they create an opportunity for the team to put a limit on
performance | b. | the more complex the payout formula, the greater impact on team
performance | c. | it is easy for individual team members to see how their effort contributes to the
team success/incentive bonus | d. | team incentives can broaden the scope of the
contribution that employees are motivated to make |
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10.
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The success of an incentive pay plan depends on all of the following,
EXCEPT:
a. | the plan being clearly related to performance | b. | its suitability to
both the organizational needs and to the management group | c. | being perceived as
equitable by employees | d. | the organizational climate in which it
operates |
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True/False
Indicate whether the statement is true or
false.
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1.
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Productivity studies show that there is little to no effect on productivity when
organizations install a pay-for-performance program.
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2.
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Incentive plans tend to work better in organizations where morale is low and
there is a lack of harmony between employees and management.
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3.
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For merit pay to work effectively, increases granted should be distinguishable
from employees' regular pay.
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4.
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Piecework incentive systems can work against an organizational culture promoting
workforce cooperation, creativity or problem solving.
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5.
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Both a merit raise and a lump sum merit bonus add an increase to the
employee’s base salary.
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6.
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A straight commission plan compensates sales employees based on various duties
that are not reflected in their sales volume.
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7.
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Professional employees may be motivated through bonuses and merit
increases.
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8.
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An advantage of team incentives is that individuals view their individual
contributions as highly valuable and rewarded.
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9.
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Pension plans are the primary long-term incentive offered to executives.
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10.
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Employee stock ownership plans have been established by Canadian Tire and Sears
Canada.
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