Question 1

In the process of designing incentives,managers should make sure that:

Accepted Answer

Attitudes that influence the success of incentive pay include whether employees value the rewards and think the pay plan is fair.

Question 2

An organization should keep information,such as changes made to its incentive plan,confidential from its employees.

Accepted Answer

Along with empowerment, communicating with employees is important. It demonstrates to employees that the pay plan is fair. It is particularly important to communicate with employees when changing the plan. Employees tend to feel concerned about changes.

Question 3

An employee at CellWorks who produces 10 components in an hour earns $9 ($.90 × 10)per hour,while another employee who produces 15 components earns $13.50 ($.90 × 15).This is an example of a:

Accepted Answer

Incentive pay in which the employer pays the same rate per piece, no matter how much the worker produces is referred to as straight piecework plan.

Question 4

The balanced-scorecard approach should be avoided while designing executive pay.

Accepted Answer

The balanced-scorecard approach is useful in designing executive pay.

Question 5

Wayan Inc.,a health care insurance company,pays an incentive based on the average work per hour.Wayan pays $10 for billing 20 medical charts per hour.An employee who bills 30 charts would earn $15 per hour.Hence,Wayan pays the same rate per chart no matter how many charts an employee produces per hour.Which of the following is being exemplified in this scenario?

Accepted Answer

Straight piecework plan is an incentive pay in which an employer pays the same rate per piece, no matter how much a worker produces. In this scenario, Wayan is employing a straight piecework plan.

Question 6

Incentive pay for executives lays the groundwork for significant ethical issues.

Accepted Answer

Incentive pay for executives lays the groundwork for significant ethical issues. When an organization links pay to its stock performance, executives need the ethical backbone to be honest about their company's performance even when dishonesty or clever shading of the truth offers the tempting potential for large earnings.

Question 7

_____ refers to an incentive pay in which the wage paid is higher when a greater amount is produced.

Accepted Answer

Differential piece rate refers to an incentive pay in which the piece rate is higher when a greater amount is produced.

Question 8

The many kinds of incentive pay fall into three broad categories: _____

Accepted Answer

The many kinds of incentive pay fall into three broad categories: incentives linked to individual, group, or organizational performance. Choices from these categories should consider not only their strengths and weaknesses, but also their fit with the organization's goals.

Question 9

Jules & Co.,a smartphone manufacturing company,provides wages to its employees based on the number of smartphones the workers assemble.The more the employees assemble,the more they earn.This type of plan is called:

Accepted Answer

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

Question 10

Token Inc.is an envelope manufacturer based in Dallas.The employees of the organization receive incentive pay based on the amount of work produced.If the output of an employee is more than the average production volume,then the organization pays an incentive in addition to wages and salaries.In this case,which of the following incentives is offered by Token Inc.?

Accepted Answer

Piecework rate is the wage based on the amount of work produced. In this scenario, Token pays its employees a piecework rate.

Question 11

A pay structure specifically designed to energize,direct,or control employees' behavior is known as:

Accepted Answer

Along with wages and salaries, many organizations offer incentive pay-that is, pay specifically designed to energize, direct, or control employees' behavior.

Question 12

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

Accepted Answer

An incentive pay designed to support a management goal may interfere with other management goals. If incentive pay is extremely rewarding, employees may focus on only the performance measures rewarded under the plan and ignore measures that are not rewarded.

Question 13

A piecework rate plan is best suited for:

Accepted Answer

The piecework rate plan is most suited for very routine, standardized jobs with output that is easy to measure. For complex jobs or jobs with hard-to-measure outputs, piecework plans do not apply very well.

Question 14

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

Accepted Answer

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

Question 15

Which of the following types of incentive plans are used to reward individual performance?

Accepted Answer

Organizations may reward individual performance with a variety of incentives such as merit pay, piecework rates, sales commission, and so on.

Question 16

A feature of an effective incentive pay plan is that it should:

Accepted Answer

An effective incentive pay plan should have performance measures that are linked to the organization's goals.

Question 17

The balanced scorecard helps employees understand the organization's goals and how they can contribute to these goals.

Accepted Answer

Not only does the balanced scorecard combine the advantages of different incentive-pay plans, it helps employees understand the organization's goals. By communicating the balanced scorecard to employees, the organization shows employees information about what its goals are and what it expects employees to accomplish.

Question 18

For incentive pay to motivate employees to contribute to the organization's success,the pay plans must be well designed.Which of the following statements would strengthen this argument?

Accepted Answer

For incentive pay to motivate employees to contribute to the organization's success, employees should value the rewards or incentives that are being offered.

Question 19

Stock options are best suited to motivate day-to-day effort or to attract and retain top individual performers.

Accepted Answer

Relying heavily on profit sharing or stock ownership may increase cooperation but do little to motivate day-to-day effort or to attract and retain top individual performers.

Question 20

Vactin Motors,an automobile company,ties individual performance,profits,and other measures of employees' success to a particular form of pay.This form of pay is influential because the amount paid is linked to certain predefined behaviors or outcomes.Which of the following is exemplified in this scenario?

Accepted Answer

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

Quiz 13: Recognizing Employee Contributions With Pay