Question 1

In 2011, a study by the American Psychological Association found that __________ of employees feel they receive inadequate nonmonetary awards and recognition for their contributions at work.

Accepted Answer

According to the study by the American Psychological Association in 2011, 43 percent of employees feel they receive inadequate nonmonetary awards and recognition for their contributions at work.

Question 2

Enterprise incentive plans include

Accepted Answer

The answer of Enterprise incentive plans include
...

Question 3

Employees on the XL27 production line at Robix whose work exceeds a standard level of output receive a higher rate of pay than those whose work meets the standard. They are working under the __________ incentive plan.

Accepted Answer

The differential piece rate incentive plan pays employees at a higher rate for exceeding a standard level of output than those who meet the standard. This matches the description provided in the question. The other options listed (standard piece rate, exception bonus rate, and individual rate pay) do not involve payment based on exceeding a standard level of output.

Question 4

Employees on the T13 production line at Robix are paid a set rate for each unit produced. They are working under the __________ incentive plan.

Accepted Answer

Straight piecework involves paying employees a fixed rate for each unit produced. This is the simplest form of piecework incentive plan and is often used in industries where production is based on repetitive tasks.

Question 5

Rate busting refers to

Accepted Answer

Rate busting is when an employee produces significantly more than the norm, often leading to disapproval from coworkers who may feel pressured to increase their own output or who may be concerned about changes to work expectations or incentive structures.

Question 6

A study on bonus versus actual pay raises showed that improving one's pay through merit increases by 1 percent would increase future performance by __________ percent.

Accepted Answer

A 1 percent merit increase in pay is shown to improve future performance by 2 percent according to the study.

Question 7

Raj likes to give small rewards to employees "caught in the act" of doing something good, even if that effort is not directly tied to a performance standard. When he does this, Raj is making use of a

Accepted Answer

Raj is using a spot bonus, which is a type of non-monetary reward given to employees for their exceptional performance or contributions to the organization beyond their job responsibilities. Even if the effort is not directly tied to a performance standard, the spot bonus recognizes and reinforces positive behavior and encourages others to follow suit.

Question 8

Piecework is appropriate when

Accepted Answer

Piecework is most appropriate when a job is fairly standardized, meaning that the work involved can be easily quantified and measured. This allows for clear productivity standards to be established, which is necessary for determining fair piecework rates. Piecework may not be appropriate when quality is of greater importance than quantity, as workers may sacrifice quality in order to produce more pieces for higher pay. Additionally, piecework may not be suitable when technology changes frequently, as this can affect production rates and make it difficult to establish fair piecework rates.

Question 9

__________ is the single word that best describes the design of individual incentive plans.

Accepted Answer

Flexibility is crucial in individual incentive plans to accommodate different roles, goals, and changing circumstances.

Question 10

Research shows that a merit increase in the range of __________ is necessary to serve as a pay motivator.

Accepted Answer

The answer of Research shows that a merit increase in...

Question 11

The pay for employees on the KRX line at Robix is not based on the actual amount of time it takes them to complete a job. Rather, they are paid based on a predetermined amount of time for completing the job. These employees are working under the

Accepted Answer

The pay plan described in the scenario is the standard hour plan, where employees are paid based on a predetermined amount of time for completing a job rather than the actual time it takes them to complete it.

Question 12

Which of the following is NOT one of the reasons why variable pay plans may not achieve their proposed objectives or lead to organizational improvements?

Accepted Answer

The employment of employee and management committees to gain cost-reduction improvements is not a reason why variable pay plans may not achieve their proposed objectives or lead to organizational improvements. The other options, failure of incentive plans to satisfy employee expectations for pay gains, failure of management in giving adequate attention to the design and implementation of a plan, and limited ability of employees to affect performance standards, are all potential reasons why variable pay plans may not be effective.

Question 13

Group incentive plans include

Accepted Answer

The answer of Group incentive plans include
...

Question 14

A reward given to a consumer service representative who put in extra effort to fill a new customer's large order, even though this was not specifically tied to the employee's performance standards, is a

Accepted Answer

A spot bonus is given to an employee for exceptional effort, performance or contribution that is not part of their regular performance standards or goals. In this scenario, the consumer service representative went above and beyond their normal duties to fill a large order, which warrants a spot bonus.

Question 15

Which of the following is NOT an advantage of an incentive pay program?

Accepted Answer

Incentives are intended to reward employees who are responsible for producing success or achieving specific performance targets, rather than distributing it evenly among all employees regardless of their contribution. Therefore, option C is not an advantage of an incentive pay program.

Question 16

Contemporary reasons given by organizations for implementing incentive plans are

Accepted Answer

All of the given reasons A, B, and C are contemporary reasons given by organizations for implementing incentive plans. These reasons aim to improve the performance and productivity of employees while aligning their efforts with the overall goals of the organization. By linking compensation rewards to the achievement of specific targets, employees are motivated to work harder and produce better results, which ultimately benefits the organization as a whole. Therefore, organizations use incentive plans as a tool to drive performance improvements and achieve their strategic objectives.

Question 17

When setting performance measures for incentive systems, we can say that the best measures are those that

Accepted Answer

Quantitative measures are more objective and easier to understand than qualitative measures, and they provide a clear connection between performance and rewards. Simple measures are also easier to communicate and track, and they help ensure that employees understand what is expected of them. Finally, a clear relationship between improved performance and rewards helps motivate employees to improve their performance.

Question 18

According to Sammer, which of the following is NOT a characteristic of a successful incentive plan?

Accepted Answer

According to Sammer, technically detailed, quantitative, and extremely thorough payout formulas are not necessarily a characteristic of a successful incentive plan. Instead, the payout formulas should be clear and easy for employees to understand. The focus should be on identifying important organizational metrics, involving employees in the process, and establishing a clear link between performance and payout.

Question 19

Robix Industries has announced the rollout of a new incentive program for its production team. A baseline of performance has been established based upon actual production numbers from the last six quarters. If productivity exceeds that deadline in a quarter, 80 percent of the money that is saved will be given to the employees. What type of plan is this?

Accepted Answer

This plan is a gain sharing plan, as employees are rewarded for exceeding a baseline of production and saving the company money. Gain sharing plans are a form of incentive compensation that promote teamwork and productivity.

Question 20

A worker at Robix paid under a straight piecework rate made $12.75 an hour this week. If each unit took the employee twelve minutes to produce, the piece rate is __________ per unit.

Accepted Answer

To find out the piece rate, we need to first convert the employee's hourly wage into a minute rate:
$12.75 per hour = $12.75 / 60 minutes = $0.2125 per minute

Then, we can use the time it takes to produce each unit to calculate the piece rate:
1 unit / 12 minutes = 0.0833 units per minute

Finally, we can divide the minute rate by the units per minute to find the piece rate:
$0.2125 per minute / 0.0833 units per minute ≈ $2.55 per unit

Quiz 10: Pay-For-Performance: Incentive Rewards