Question 1

The Scanlon plan includes all of the following features except .

Accepted Answer

The Scanlon plan emphasizes group achievement and cooperation rather than individual achievement.

Question 2

Which profit-sharing plan provides tax advantages for employees by deferring income taxes, often until the employee retires?

Accepted Answer

A deferred profit-sharing plan allows employees to defer income taxes on their share of profits until they withdraw the funds, typically at retirement, providing tax advantages.

Question 3

Jamie's company is running a contest to encourage employees to work more hours than required. The employee with the most hours clocked at the end of the week wins a bonus of $400. Jamie is excited when she wins the contest by clocking 57 hours in the contest week instead of her normal 40, because it is a nice addition to the $6 per hour she makes. How much pay will Jamie earn for the week of the contest?

Accepted Answer

The answer of Jamie's company is running a contest to...

Question 4

Which of the following is not a basic tenet of behavior modification?

Accepted Answer

Behavior modification focuses on the use of rewards and punishments to influence behavior, but it does not necessarily require that employees understand the link between their behavior and the consequences. The focus is on the observable change in behavior rather than the cognitive understanding of the individual.

Question 5

Which plan uses a trust to hold stock in individual employee accounts and distributes it to employees upon retirement?

Accepted Answer

An employee stock ownership plan (ESOP) uses a trust to hold stock in individual employee accounts and distributes it to employees upon retirement.

Question 6

What type of profit-sharing plan involves the firm simply distributing a percentage of profits as profit shares to employees at regular intervals?

Accepted Answer

A cash plan involves distributing a percentage of profits directly to employees at regular intervals, typically in the form of cash bonuses.

Question 7

What type of profit-sharing plan involves the firm placing a predetermined portion of profits in each employee's account under a trustee's supervision?

Accepted Answer

A deferred profit-sharing plan involves the firm placing a predetermined portion of profits into each employee's account, which is managed under a trustee's supervision, and is typically distributed at a later date, often upon retirement.

Question 8

According to the Sarbanes-Oxley Act of 2002, if a company must restate financial statements due to material noncompliance with a financial reporting requirement, the act requires that the CEO .

Accepted Answer

The Sarbanes-Oxley Act requires the CEO to repay any bonuses or other incentive-based or equity-based compensation received during the 12 months prior to the issuance of the financial statements that need to be restated due to material noncompliance.

Question 9

Which of the following is a disadvantage of using straight salary to compensate salespeople?

Accepted Answer

Straight salary isn't tied to sales results, which may not motivate salespeople to maximize their sales performance.

Question 10

What type of profit-sharing plan involves the firm distributing total annual profits each year among employees based on their merit rating?

Accepted Answer

The answer of What type of profit-sharing plan involves the...

Question 11

What type of pay plan is being used when workers are paid a sum for each unit they produce?

Accepted Answer

Piecework is a pay plan in which workers are paid a sum for each unit they produce.

Question 12

Which of the following is an advantage of using a combination of salary and commission as compensation for salespeople?

Accepted Answer

A combination of salary and commission provides a guaranteed minimum income through the salary component, while still offering the incentive of earning more through commissions based on performance.

Question 13

Under the Fair Labor Standards Act, which bonus below would not be included in overtime pay computations?

Accepted Answer

A Christmas bonus is considered a discretionary bonus and is not included in overtime pay computations under the Fair Labor Standards Act.

Question 14

Companywide plans in which a corporation contributes shares of its own stock or cash to be used to purchase company stock to a trust established to purchase shares of the firm's stock for employees are called .

Accepted Answer

Employee stock ownership plans (ESOPs) are companywide plans where a corporation contributes its own stock or cash to a trust, which is then used to purchase company stock for employees.

Question 15

is any salary increase the firm awards to an individual employee based on his or her individual performance.

Accepted Answer

Merit pay is a salary increase awarded to an individual employee based on their individual performance.

Question 16

All of the following are advantages of team incentives except that .

Accepted Answer

Team incentives can lead to situations where an individual's pay is not directly proportional to their personal efforts, as the rewards are distributed based on team performance rather than individual contributions.

Question 17

Which of the following is true of recognition programs?

Accepted Answer

The answer of Which of the following is true of...

Question 18

Which of the following methods is not used to pay using group incentive plans?

Accepted Answer

All the methods listed are possible ways to structure group incentive plans, as they each provide a different approach to distributing pay among group members based on collective or individual performance.

Question 19

Behavior modification is also known as .

Accepted Answer

Behavior modification is also known as reinforcement theory, which focuses on changing behavior through the use of rewards or punishments.

Question 20

How does merit pay differ from a bonus?

Accepted Answer

Merit pay becomes part of an employee's base pay, reflecting ongoing performance, while a bonus is typically a one-time payment that does not alter the base salary.

Quiz 12: Pay-For-Performance and Financial Incentives