Chapter 10 - Pay-for-Performance Plans

Chapter 10: Pay-for-Performance Plans

 

Multiple Choice Questions

 

1. (p. 336) It is observed that _____ is/are commanding a larger share of the total compensation

for all employee groups. 

A. 

merit pay

B. 

health benefits

C. 

retirement benefits

D.

 variable pay

Difficulty: Medium

 

2. (p. 336) Surveys show the most popular type of variable pay plan is ____________

A. stock options.

B. gainsharing.

C. individual incentives.

D

.

special recognition

Difficulty: Medium

3. (p. 336) Variable pay as a percent of payroll is __ percent.

A. 5

B

. 12

C. 17

D. 21

Difficulty: Medium

4. (p. 337) All of the following are true regarding merit pay except _______

A. it has a small, but significant effect on performance.

B

. removal of merit pay lowers satisfaction but not performance.

C. departments and units with merit pay show higher performance.

D. merit pay has a sorting effect.

Difficulty: Difficult

5. (p. 338) The authors argue that for merit pay to live up to its potential, all of the following

should be done except _________

A

.

use more peer than supervisor raters.

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Chapter 10 - Pay-for-Performance Plans

B. improve the accuracy of appraisals.

C. allocate enough merit money to truly reward performance.

D. ensure merit pay differentiates across performance levels.

Difficulty: Medium

6. (p. 338-39) Which of the following is not true of lump-sum bonuses? 

A

.

 They help maintain competitive pay position relative to competitors.

B. 

They are less expensive than merit pay.

C. 

Employees dislike them.

D. 

They are a more visible reward than merit pay.

 

Difficulty: Difficult

 

7. (p. 340) Usually _____ are awarded for exceptional performance, often on special projects or

for performance that so exceeds expectations as to be deserving of an add-on bonus. 

A. 

variable pay awards

B

.

 individual spot awards

C. 

lump-sum bonuses

D. 

merit pay

Difficulty: Medium

 

8. (p. 340) Which of the following is not true about individual spot awards? 

A. 

Smaller companies may be more casual about recognition.

B. 

Someone in the organization alerts top management to the exceptional performance.

C

.

 A majority of companies do not feel that these awards are effective.

D. 

Smaller companies are more subjective about deciding the size of the award.

Difficulty: Medium

 

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© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any

manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.