BUSMHR 3100: Final Exam questions
with complete solutions A+ rated
Incentive Pay - correct answer ✔✔ - forms of pay linked to an employee's performance as an individual,
group member, or organization member
- influential because the amount paid is linked to certain predefined behaviors or outcomes
- may be in the form of a commission or a bonus
Effective Incentive Pay Requirements - correct answer ✔✔ - Performance measures are linked to the
organization's goals
- employees believe they can meet performance standards
- organization gives employees the resources they need to meet their goals
- employees value the rewards given
- employees believe the reward system is fair
- pay plan takes into account that employees may ignore any goals that are not rewarded
Motivating Employees with Incentives - correct answer ✔✔ - employees must feel like the incentive plan
is fair
- give employees a say in allocating incentives
- employees want interesting work, appreciation for their efforts, flexibility and a sense of belonging to
the work group and the inner satisfaction of work well done
Examples of Incentives - correct answer ✔✔ - piecework rates, standard hour plans, merit pay, individual
bonuses, sales commissions
Piecework rate - correct answer ✔✔ a wage based on the amount an employee produces
Straight piecework plan - correct answer ✔✔ the employer pays the same rate per piece no matter how
much the worker produces
,Differential piece rates - correct answer ✔✔ the piece rate depends on the amount produced
Standard Hour Plan - correct answer ✔✔ - an incentive plan that pays workers extra for work done in
less time than a preset "standard time"
- similar to piecework plans
Merit Pay - correct answer ✔✔ - a system of linking pay increases to ratings on performance appraisals
- use a merit increase grid (individual's performance rating, individual's compa-ratio)
Performance Bonuses - correct answer ✔✔ - not rolled into base pay
- employee must re-earn them during each performance period
- may be a one-time reward
- may be linked to objective performance measures, rather than subjective ratings
Sales Commissions - correct answer ✔✔ - commissions: incentive pay calculated as a percentage of sales
(some earn a commission in addition to a base salary)
- straight commission plan: some earn only commissions
- some earn no commissions at all, but a straight salary
Commission - correct answer ✔✔ - performance bonuses for production workers are not rolled into base
pay
- the bonuses could be tied to various measures including the quantity of products shipped in a specific
time period
Gainsharing - correct answer ✔✔ - group incentive program that measures improvements in productivity
and effectiveness and distributes a portion of each to employees
- addresses challenge of identifying appropriate performance measures for complex jobs
- frees employees to determine how to improve their own and their group's performance
, 10 Conditions for Effective Gainsharing - correct answer ✔✔ - management commitment
- need for change or commitment to continuous improvement
- management acceptance and encouragement of employee input
- high levels of cooperation and interaction
- employment security
- information sharing on productivity and costs
- goal setting
- commitment of all involved parties to the process of change and improvement
- performance standard and calculation that employees understand and consider fair and that is closely
related to managerial objectives
- employees who value working in groups
Group Bonuses - correct answer ✔✔ - tends to be for smaller work groups
- reward the members of a group for attaining a specific goal, usually measured in terms of physical
output
Team Awards - correct answer ✔✔ - similar to group bonuses but more likely to use a broad range of
performance measures (cost savings, successful completion of a project, meeting deadlines)
Types of Pay for Organizational Performance - correct answer ✔✔ - profit sharing, stock options,
employee stock ownership plans
Profit Sharing - correct answer ✔✔ - incentive pay in which payments are a percentage of the
organization's profits and do not become part of the employees' base salary
- may encourage employees to think like owners
- evidence is not clear whether profit sharing helps organizations perform better
Stock Options - correct answer ✔✔ - rights to buy a certain number of shares of stock at a specified price
- traditionally stock options have been granted to executives
with complete solutions A+ rated
Incentive Pay - correct answer ✔✔ - forms of pay linked to an employee's performance as an individual,
group member, or organization member
- influential because the amount paid is linked to certain predefined behaviors or outcomes
- may be in the form of a commission or a bonus
Effective Incentive Pay Requirements - correct answer ✔✔ - Performance measures are linked to the
organization's goals
- employees believe they can meet performance standards
- organization gives employees the resources they need to meet their goals
- employees value the rewards given
- employees believe the reward system is fair
- pay plan takes into account that employees may ignore any goals that are not rewarded
Motivating Employees with Incentives - correct answer ✔✔ - employees must feel like the incentive plan
is fair
- give employees a say in allocating incentives
- employees want interesting work, appreciation for their efforts, flexibility and a sense of belonging to
the work group and the inner satisfaction of work well done
Examples of Incentives - correct answer ✔✔ - piecework rates, standard hour plans, merit pay, individual
bonuses, sales commissions
Piecework rate - correct answer ✔✔ a wage based on the amount an employee produces
Straight piecework plan - correct answer ✔✔ the employer pays the same rate per piece no matter how
much the worker produces
,Differential piece rates - correct answer ✔✔ the piece rate depends on the amount produced
Standard Hour Plan - correct answer ✔✔ - an incentive plan that pays workers extra for work done in
less time than a preset "standard time"
- similar to piecework plans
Merit Pay - correct answer ✔✔ - a system of linking pay increases to ratings on performance appraisals
- use a merit increase grid (individual's performance rating, individual's compa-ratio)
Performance Bonuses - correct answer ✔✔ - not rolled into base pay
- employee must re-earn them during each performance period
- may be a one-time reward
- may be linked to objective performance measures, rather than subjective ratings
Sales Commissions - correct answer ✔✔ - commissions: incentive pay calculated as a percentage of sales
(some earn a commission in addition to a base salary)
- straight commission plan: some earn only commissions
- some earn no commissions at all, but a straight salary
Commission - correct answer ✔✔ - performance bonuses for production workers are not rolled into base
pay
- the bonuses could be tied to various measures including the quantity of products shipped in a specific
time period
Gainsharing - correct answer ✔✔ - group incentive program that measures improvements in productivity
and effectiveness and distributes a portion of each to employees
- addresses challenge of identifying appropriate performance measures for complex jobs
- frees employees to determine how to improve their own and their group's performance
, 10 Conditions for Effective Gainsharing - correct answer ✔✔ - management commitment
- need for change or commitment to continuous improvement
- management acceptance and encouragement of employee input
- high levels of cooperation and interaction
- employment security
- information sharing on productivity and costs
- goal setting
- commitment of all involved parties to the process of change and improvement
- performance standard and calculation that employees understand and consider fair and that is closely
related to managerial objectives
- employees who value working in groups
Group Bonuses - correct answer ✔✔ - tends to be for smaller work groups
- reward the members of a group for attaining a specific goal, usually measured in terms of physical
output
Team Awards - correct answer ✔✔ - similar to group bonuses but more likely to use a broad range of
performance measures (cost savings, successful completion of a project, meeting deadlines)
Types of Pay for Organizational Performance - correct answer ✔✔ - profit sharing, stock options,
employee stock ownership plans
Profit Sharing - correct answer ✔✔ - incentive pay in which payments are a percentage of the
organization's profits and do not become part of the employees' base salary
- may encourage employees to think like owners
- evidence is not clear whether profit sharing helps organizations perform better
Stock Options - correct answer ✔✔ - rights to buy a certain number of shares of stock at a specified price
- traditionally stock options have been granted to executives
