C12: Variable Pay: Improving Performance With
Variable Pay – Questions With Solutions
Which of the following describes a purpose of variable pay?
(A) To reward individuals for acquisition of new skills and competencies
(B) To ensure the individuals' value relative to the labor market
(C) To differentiate the pay of individuals who achieve results from those who
do not
(D) To reward individuals for their sustained performance over time. Right
Ans - (C) To differentiate the pay of individuals who achieve results from
those who do not
What business strategy often includes a combination of price, quality,
dependability and ease of purchase that competitors cannot match?
(A) Operational excellence
(B) Product/service leadership
(C) Customer intimacy Right Ans - (A) Operational excellence
Which of the following business objectives would relate most to a
product/service leadership strategy?
(A) Improve operational efficiency
(B) Time from innovation to market
(C) Customer attraction and retention
(D) Reduce costs Right Ans - (B) Time from innovation to market
In which of the following stages of the business life cycle would an
organization generally be focused on maintaining/increasing market share,
improving productivity and reducing cost of sales?
(A) Start-up
(B) Growth
(C) Mature
(D) Decline Right Ans - (C) Mature
, Which of the following business objectives would relate most to the start-up
stage of a business life cycle?
(A) Maximize profits
(B) Product quality
(C) Maintain/increase market share
(D) Obtaining capital Right Ans - (D) Obtaining capital
What influences can variable pay provide in relation to organizational
performance?
(A) Customer satisfaction, brand awareness and product quality
(B) Focus, alignment, motivation and reinforcement
(C) Attraction, penetration, innovation and collaboration
(D) Growth, efficiency and capability Right Ans - (B) Focus, alignment,
motivation and reinforcement
What are the three categories of variable pay?
(A) Cash, noncash and equities
(B) Quarterly, annual and spot bonuses
(C) Incentives, bonuses and recognition Right Ans - (C) Incentives, bonuses
and recognition
Which of the following plans is a type of long-term incentive plan?
(A) Equity-based plan
(B) Profit-sharing plan
(C) Individual performance-based plan
(D) Performance-sharing plan Right Ans - (A) Equity-based plan
Which individual performance-based plan would be most appropriate for an
account representative with a high degree of influence over company sales?
(A) Performance against predetermined objectives (MBO) plan
(B) Output-based plan
(C) Commission plan Right Ans - (C) Commission plan
Variable Pay – Questions With Solutions
Which of the following describes a purpose of variable pay?
(A) To reward individuals for acquisition of new skills and competencies
(B) To ensure the individuals' value relative to the labor market
(C) To differentiate the pay of individuals who achieve results from those who
do not
(D) To reward individuals for their sustained performance over time. Right
Ans - (C) To differentiate the pay of individuals who achieve results from
those who do not
What business strategy often includes a combination of price, quality,
dependability and ease of purchase that competitors cannot match?
(A) Operational excellence
(B) Product/service leadership
(C) Customer intimacy Right Ans - (A) Operational excellence
Which of the following business objectives would relate most to a
product/service leadership strategy?
(A) Improve operational efficiency
(B) Time from innovation to market
(C) Customer attraction and retention
(D) Reduce costs Right Ans - (B) Time from innovation to market
In which of the following stages of the business life cycle would an
organization generally be focused on maintaining/increasing market share,
improving productivity and reducing cost of sales?
(A) Start-up
(B) Growth
(C) Mature
(D) Decline Right Ans - (C) Mature
, Which of the following business objectives would relate most to the start-up
stage of a business life cycle?
(A) Maximize profits
(B) Product quality
(C) Maintain/increase market share
(D) Obtaining capital Right Ans - (D) Obtaining capital
What influences can variable pay provide in relation to organizational
performance?
(A) Customer satisfaction, brand awareness and product quality
(B) Focus, alignment, motivation and reinforcement
(C) Attraction, penetration, innovation and collaboration
(D) Growth, efficiency and capability Right Ans - (B) Focus, alignment,
motivation and reinforcement
What are the three categories of variable pay?
(A) Cash, noncash and equities
(B) Quarterly, annual and spot bonuses
(C) Incentives, bonuses and recognition Right Ans - (C) Incentives, bonuses
and recognition
Which of the following plans is a type of long-term incentive plan?
(A) Equity-based plan
(B) Profit-sharing plan
(C) Individual performance-based plan
(D) Performance-sharing plan Right Ans - (A) Equity-based plan
Which individual performance-based plan would be most appropriate for an
account representative with a high degree of influence over company sales?
(A) Performance against predetermined objectives (MBO) plan
(B) Output-based plan
(C) Commission plan Right Ans - (C) Commission plan
