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Chapter 12: Pay for Performance and Financial IncentivesMultiple Choice1. Frederick Taylor referred to the tendency of employees to work at the slowest pace possible and to produce at the minimum acceptable level as _.a. social loafingb. systematic soldieringc. human natured. group shifte. group norms(b; easy; p. 472)2. Which non-case incentive do employees most prefer? a. electronicsb. season tickets to an entertainment venue of the employees choicec. a trip to a destination of the employees choiced. a shopping spree at a store of the employees choicee. home improvement items(c; moderate; p. 473)3. Who proposed a two-factor theory that explains how motivator factors relate to satisfaction and hygiene factors relate to dissatisfaction?a. Frederick Taylorb. Abraham Maslowc. Frederick Herzbergd. David McClellande. Edward Deci(c; easy; p. 473)4. Herzbergs Hygiene-Motivator theory of motivation suggests that extrinsic factors like _ cause dissatisfaction.a. advancementb. responsibilityc. respectd. working conditionse. recognition(d; moderate; p. 473)5. Herzbergs Hygiene-Motivator theory of motivation suggests that intrinsic factors like _ cause satisfaction.a. working conditionsb. payc. achievementd. incentive paye. friendships at work(c; moderate; p. 473)6. The Hygiene-Motivator theory is also called the _.a. two-factor theoryb. learned needs theoryc. equity theoryd. theory of extrinsic motivatione. hierarchy of needs(a; easy; p. 473)7. Hygiene factors affect a continuum that ranges from _.a. dissatisfaction to satisfactionb. no dissatisfaction to no satisfactionc. dissatisfaction to no dissatisfactiond. satisfaction to no satisfactione. none of the above(c; moderate; p. 473)8. Motivator factors affect a continuum that ranges from _.a. dissatisfaction to satisfactionb. no dissatisfaction to no satisfactionc. dissatisfaction to no dissatisfactiond. satisfaction to no satisfactione. none of the above(d; moderate; p. 473)9. Who distinguished between intrinsic motivation and extrinsic motivation?a. Frederick Taylorb. Abraham Maslowc. Frederick Herzbergd. David McClellande. Edward Deci(e; easy; p. 474)10. Rebeccas manager wants to acknowledge her outstanding service record for the past quarter. Her manager decides to give Rebecca a bonus of $1000 as a reward. This is an example of using _ to reinforce behavior.a. intrinsic motivationb. extrinsic motivationc. physiological needsd. extinctione. recognition(b; moderate; p. 474)11. Vrooms expectancy theory states that a persons motivation to exert some level of effort is a function of all of the following except _.a. the probability that the effort will lead to performanceb. the perceived relationship between performance and obtaining the rewardc. the perceive value of the rewardd. the amount of intrinsic motivation associated with the behaviore. all of the above affect a persons effort(d; difficult; p. 474)12. In Vrooms theory of motivation, motivation is equal to E * I * V, where E represents _.a. existenceb. extrinsic motivationc. expectancyd. esteeme. energy(c; moderate; p. 474)13. In Vrooms theory of motivation, motivation is equal to E * I * V, where I represents _.a. intrinsic motivationb. internalizationc. instrumentalityd. imperative actione. none of the above(c; moderate; p. 474)14. In Vrooms theory of motivation, motivation is equal to E * I * V, where V represents _.a. valueb. valencec. victoryd. vigilancee. viral motivation(b; moderate; p. 474)15. Expectancy could also be referred to as the _.a. probability that effort will lead to successb. perceived relationship between successful performance and obtaining a desired rewardc. perceived value a person attaches to a rewardd. luck associated with each persone. degree of optimism a person has(a; easy; p. 474)16. Instrumentality in Vrooms theory of motivation refers to the _.a. probability that effort will lead to successb. perceived relationship between successful performance and obtaining a desired rewardc. perceived value a person attaches to a rewardd. luck associated with each persone. degree of optimism a person has(b; moderate; p. 474)17. Which component in Vrooms theory of motivation emphasizes that people wont pursue rewards they find unattractive?a. expectancyb. instrumentalityc. valenced. probabilitye. intrinsic motivation(c; moderate; p. 474)18. _ is a team or group incentive plan that ties pay to some measure of a firms overall profitability.a. Variable payb. Pay for performancec. Intermittent payd. Profitability-based paye. Competency-based pay(a; easy; p. 474)19. Behavior modification is based upon the principles of rewards and punishments advanced by _.a. Frederick Taylorb. Abraham Maslowc. Frederick Herzbergd. B.F. Skinnere. Edward Deci(d; easy; p. 474)20. Which of the following terms refers to changing behavior through rewards or punishments that are contingent on performance?a. intermittent payb. behavior modificationc. personal developmentd. instrumentalitye. internal motivation(b; easy; p. 474)21. Which of the following is not a basic tenet of behavior modification?a. Behavior that leads to rewards tends to be repeated.b. Behavior that appears to lead to punishment tends not to be repeated.c. Properly scheduled rewards can be used to encourage some behaviors.d. Properly scheduled punishments can be used to minimize some behaviors.e. Employees must understand the link between rewards and punishments and their behavior.(e; difficult; p. 474)22. Behavior modification is also known as _.a. expectancy theoryb. reinforcement theoryc. hygiene-motivator theoryd. leader-member exchangee. attribution theory(b; easy; p. 474)23. Under the Fair Labor Standards Act, which bonus below would not be included in overtime pay computations?a. Christmas bonusb. bonus promised to new hiresc. bonus provided for in a union contractd. bonus announced to induce employees to work moree. all of the above would be included(a; moderate; p. 475)24. Jamies 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?a. $240b. $640c. $803d. $1048e. $1448(d; difficult; p. 475; AACSB: analytical skill)25. 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 _.a. repay any bonuses received during the 12 months prior to the issuance of the financial statements in questionb. make a public apology to stock holdersc. resign from the position of CEOd. open his or her private records for investigation by an independent auditore. all of the above(a; moderate; p. 475)26. What type of pay plan is being used when workers are paid a sum for each unit they produce?a. base payb. competency-based payc. job-based payd. piecework e. bonus(d; easy; p. 475)27. _ is any salary increase the firm awards to an individual employee based on his or her individual performance. a. Merit payb. Variable payc. Competency-based payd. Job-based paye. Piecework(a; easy; p, 476)28. How does merit pay differ from a bonus?a. Merit pay becomes part of an employees base pay, but a bonus does not.b. A bonus becomes part of an employees base pay, but merit pay does not.c. Merit pay is linked to individual performance, while a bonus is not.d. A bonus is linked to individual performance, while merit pay is linked to company performance.e. A bonus is a type of gift. (a; moderate; p. 476)29. Which of the following is true of recognition programs?a. They have a positive impact on performance.b. They are expensive to administer.c. They reduce intrinsic motivation.d. They reduce extrinsic motivation.e. a and b(e; moderate; p. 478)30. Which of the following is a disadvantage of using straight salary to compensate salespeople?a. It encourages account servicing.b. It isnt tied to results.c. It makes it easy to switch territories.d. It encourages product training.e. It encourages prospecting.(b; moderate; p. 480)31. Which of the following is an advantage of using a combination of salary and commission as compensation for salespeople?a. provides a guaranteed minimum for the salespeopleb. eliminates some incentive valuec. rewards only for resultsd. completely tied to performancee. complicated to administer(a; moderate; p. 481)32. Which of the following methods is not used to pay using group incentive plans?a. All members receive the pay earned by the highest producer.b. All members receive pay earned by the lowest producer.c. All members receive pay equal to the average pay earned by the group.d. All members receive the same pay based on the piece rate for the groups job.e. All of the above are possible methods.(e; easy; p. 484)33. All of the following are advantages of team incentives except that _.a. team planning is reinforcedb. workers pay may not be proportional to his or her effortsc. jealousy is reducedd. problem solving is encouragede. collaboration is encouraged(b; moderate; p. 484)34. What type of profit-sharing plan involves the firm simply distributing a percentage of profits as profit shares to employees at regular intervals?a. cash planb. Lincoln incentive systemc. Jefferson incentive systemd. deferred profit-sharing plane. employee stock ownership plan(a; easy; p. 486)35. What type of profit-sharing plan involves the firm distributing total annual profits each year among employees based on their merit rating? a. cash planb. Lincoln incentive systemc. Jefferson incentive systemd. deferred profit-sharing plane. employee stock ownership plan(b; easy; p. 486)36. What type of profit-sharing plan involves the firm placing a predetermined portion of profits in each employees account under a trustees supervision?a. cash planb. Lincoln incentive systemc. Jefferson incentive systemd. deferred profit-sharing plane. employee stock ownership plan(d; easy; p. 486)37. Which profit-sharing plan provides tax advantages for employees by deferring income taxes, often until the employee retires?a. cash planb. Lincoln incentive systemc. Jefferson incentive systemd. deferred profit-sharing plane. employee stock ownership plan(d; easy; p. 486)38. 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 firms stock for employees are called _.a. cash plansb. Lincoln incentive systemsc. Jefferson incentive systemsd. deferred profit-sharing planse. employee stock ownership plans(e; easy; p. 487)39. Which plan uses a trust to hold stock in individual employee accounts and distributes it to employees upon retirement?a. cash planb. Lincoln incentive systemc. Jefferson incentive systemd. deferred profit-sharing plane. employee stock ownership plan(e; easy; p. 487)40. The Scanlon plan includes all of the following features except _.a. a philosophy of cooperationb. an emphasis on individual achievementc. identityd. an involvement systeme. a sharing of benefits formula(b; difficult; p. 488)41. Which incentive plan is based on a philosophy that managers and employees must cooperate together? a. cash planb. Lincoln incentive systemc. Scanlon pland. deferred profit-sharing plane. employee stock ownership plan(c; moderate; p. 488)42. Identity in the Scanlon plan refers to a focus on _.a. a philosophy of cooperationb. the clear articulation of the company mission and visionc. a high level of competence from employees at all levelsd. improvement suggestions from employeese. sharing benefits that result from improvement suggestions(b; moderate; p. 488)43. Competence in the Scanlon plan refers to a focus on _.a. a philosophy of cooperationb. the clear articulation of the company mission and visionc. a high level of competence from employees at all levelsd. improvement suggestions from employeese. sharing benefits that result from improvement suggestions(c; easy; p. 488)44. Sharing of benefits in the Scanlon plan refers to a focus on _.a. a philosophy of cooperationb. the clear articulation of the company mission and visionc. a high level of competence from employees at all levelsd. improvement suggestions from employeese. sharing benefits that result from improvement suggestions(e; easy; p. 488)45. A(n) _ plan is an incentive plan that engages many or all employees in a common effort to achieve a companys productivity objectives with any resulting cost-savings gains shared among employees and the company.a. Scanlonb. Lincoln incentivec. gainsharingd. ESOPe. variable pay(c; moderate; p. 488)46. Gainsharing is an incentive plan that _.a. uses a trust to hold stock in individual employee accounts and distributes it to employees upon retirementb. engages many or all employees in a common effort to achieve a companys productivity objectives with any resulting cost-savings gains shared among employees and the companyc. contributes company shares of its own stock or cash to be used to purchase company stock to a trust established to purchase shares of the firms stock for employeesd. provides tax advantages for employees by deferring income taxes, often until the employee retirese. involves the firm simply distributing a percentage of profits as profit shares to employees at regular intervals(b; moderate; p. 488)47. Cash profit-sharing is an incentive plan that _.a. uses a trust to hold stock in individual employee accounts and distributes it to employees upon retirementb. engages many or all employees in a common effort to achieve a companys productivity objectives with any resulting cost-savings gains shared among employees and the companyc. contributes company shares of its own stock or cash to be used to purchase company stock to a trust established to purchase shares of the firms stock for employeesd. provides tax advantages for employees by deferring income taxes, often until the employee retirese. involves the firm simply distributing a percentage of profits as profit shares to employees at regular intervals(e; moderate; p. 486)48. The Lincoln incentive system is an incentive plan that _.a. uses a trust to hold stock in individual employee accounts and distributes it to employees upon retirementb. engages many or all employees in a common effort to achieve a companys productivity objectives with any resulting cost-savings gains shared among employees and the companyc. contributes company shares of its own stock or cash to be used to purchase company stock to a trust established to purchase shares of the firms stock for employeesd. provides tax advantages for employees by deferring income taxes, often until the employee retirese. involves the firm distributing total annual profits each year among employees based on their merit rating (e; moderate; p. 486)49. Deferred profit-sharing is an incentive plan that _.a. uses a trust to hold stock in individual employee accounts and distributes it to employees upon retirementb. engages many or all employees in a common effort to achieve a companys productivity objectives with any resulting cost-savings gains shared among employees and the companyc. contributes company shares of its own stock or cash to be used to purchase company stock to a trust established to purchase shares of the firms stock for employeesd. provides tax advantages for employees by deferring income taxes, often until the employee retirese. involves the firm distributing total annual profits each year among employees based on their merit rating (d; moderate; p. 486)50. An employee stock ownership plan is an incentive plan that _.a. engages many or all employees in a common effort to achieve a companys productivity objectives with any resulting cost-savings gains shared among employees and the companyb. focuses on the sharing of benefits between employer and employeesc. contributes company shares of its own stock or cash to be used to purchase company stock to a trust established to purchase shares of the firms stock for employeesd. provides tax advantages for employees by deferring income taxes, often until the employee retirese. involves the firm distributing total annual profits each year among employees based on their merit rating (c; moderate; p. 487)51. The Scanlon plan is an incentive plan that _.a. engages many or all employees in a common effort to achieve a companys productivity objectives with any resulting cost-savings gains shared among employees and the companyb. focuses on the sharing of benefits between employer and employeesc. contributes company shares of its own stock or cash to be used to purchase company stock to a trust established to purchase shares of the firm
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