Question 1

Which of the following is a major concern about executive compensation?

Accepted Answer

A)  the timing of the stock awards
B)  the lack of objective performance data
C)  the lack of perquisites
D)  the growing gap between leaders and the company's lowest-paid employeesE) B) and D)
F) A) and B)

Question 2

Last year,many CEOs of Canada's largest companies earned less than $500,000 base pay,yet their overall compensation was on average more than $9 million.What was the major source for the large total pay?

Accepted Answer

A)  stock options
B)  executive perquisites
C)  bonuses
D)  benefitsE) B) and D)
F) All of the above

Question 3

Which of the following is NOT a type of stock plan?

Accepted Answer

A)  stock option plan
B)  stock bonus plan
C)  stock purchase plan
D)  stock incentive planE) A) and B)
F) B) and C)

Question 4

In most profit-sharing plans,about 20 to 25 percent of net profits are shared with employees.

Accepted Answer

A) True 
 B)False

Question 5

Stock options are rights attached to the achievement of specific organizational objectives.

Accepted Answer

A) True 
 B)False

Question 6

Employees receive a specified payment for each unit produced under a straight piecework program.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is NOT a reason that merit raises may fail to achieve their intended purpose?

Accepted Answer

A)  Merit raises may be based on seniority or favouritism.
B)  The performance appraisal system is deficient.
C)  Employees are unable to differentiate between merit and other pay increases.
D)  Incentive rewards are linked to organizational goals.E) C) and D)
F) All of the above

Question 8

ABC Corporation has a sales compensation plan that requires salespeople to be paid for performing various duties not reflected in their sales volume.What type of pay plan does this exemplify?

Accepted Answer

A)  a straight salary plan
B)  a merit plan
C)  lump-sum merit pay
D)  a standard hour planE) B) and D)
F) C) and D)

Question 9

One clear trend in strategic compensation management is the growth of incentive programs for employees throughout the organization.

Accepted Answer

A) True 
 B)False

Question 10

At Steelcase,an office furniture maker,employees can earn more than their base pay if they produce more units,such as upholstering more chairs.This part of their pay is determined on units produced.Which of the following plans is being used here?

Accepted Answer

A)  piece rate plan
B)  completion pay plan
C)  time division plan
D)  standard hour planE) None of the above
F) A) and B)

Question 11

The level of incentives given to executives may depend on their level in the firm.

Accepted Answer

A) True 
 B)False

Question 12

Management must be careful to ensure that incentive payments are viewed as both a reward and an entitlement.

Accepted Answer

A) True 
 B)False

Question 13

What is the philosophy behind the Scanlon Plan?

Accepted Answer

A)  Rewards are shared with employees based on improved profits.
B)  Employees should offer ideas and suggestions to improve productivity and,in turn,be rewarded for their constructive efforts.
C)  Organizational profits should improve through sales efforts.
D)  Managers and employees should establish quality and quantity goals for optimum organizational performance.E) A) and B)
F) B) and C)

Question 14

Merit raises may be perpetuated year after year even if performance declines.

Accepted Answer

A) True 
 B)False

Question 15

The idea behind the Scanlon Plan is that employees not only should offer ideas to improve productivity,but also should be rewarded for those ideas.

Accepted Answer

A) True 
 B)False

Question 16

Because of failing popularity and media scandals,the number of Canadian companies granting stock options to nonexecutive personnel has been decreasing in recent years.

Accepted Answer

A) True 
 B)False

Question 17

What is a major problem with profit sharing plans?

Accepted Answer

A)  They increase the fixed costs of organizations.
B)  The line of sight between employee performance and organizational profits is blurred.
C)  The profits distributed to employees can be too much.
D)  There is no agreed upon procedure to determine profits.E) C) and D)
F) A) and D)

Question 18

Perquisites are special benefits given to executive employees.

Accepted Answer

A) True 
 B)False

Question 19

Malo is an engineer.Her salary range was extended to the range used for administrative employees.What is this type of pay system?

Accepted Answer

A)  a hybrid wage system
B)  broadbanding
C)  extended range pay system
D)  a double-track wage systemE) C) and D)
F) B) and C)

Question 20

What's the overarching philosophy of gainsharing plans?

Accepted Answer

A)  Gains that are shared with employees will multiply over time.
B)  Involved employees will improve productivity through more effective use of organizational resources.
C)  Organizations need to pay employees more.
D)  Individual incentives are motivational.E) None of the above
F) A) and B)

Exam 10: Pay for Performance: Incentive Rewards

One clear trend in strategic compensation management is the growth of incentive programs for employees throughout the organization.

Correct AnswerverifiedShow Answer

Merit raises may be perpetuated year after year even if performance declines.

Correct AnswerverifiedShow Answer

Employees receive a specified payment for each unit produced under a straight piecework program.

Correct AnswerverifiedShow Answer

Which of the following is a major concern about executive compensation?

Correct AnswerverifiedShow Answer

Which of the following is NOT a type of stock plan?

Correct AnswerverifiedShow Answer

What is a major problem with profit sharing plans?

Correct AnswerverifiedShow Answer

What's the overarching philosophy of gainsharing plans?

Correct AnswerverifiedShow Answer

Perquisites are special benefits given to executive employees.

Correct AnswerverifiedShow Answer

Which of the following is NOT a reason that merit raises may fail to achieve their intended purpose?

Correct AnswerverifiedShow Answer

Last year,many CEOs of Canada's largest companies earned less than $500,000 base pay,yet their overall compensation was on average more than $9 million.What was the major source for the large total pay?

Correct AnswerverifiedShow Answer

ABC Corporation has a sales compensation plan that requires salespeople to be paid for performing various duties not reflected in their sales volume.What type of pay plan does this exemplify?

Correct AnswerverifiedShow Answer

Because of failing popularity and media scandals,the number of Canadian companies granting stock options to nonexecutive personnel has been decreasing in recent years.

Correct AnswerverifiedShow Answer

Stock options are rights attached to the achievement of specific organizational objectives.

Correct AnswerverifiedShow Answer

What is the philosophy behind the Scanlon Plan?

Correct AnswerverifiedShow Answer

In most profit-sharing plans,about 20 to 25 percent of net profits are shared with employees.

Correct AnswerverifiedShow Answer

Malo is an engineer.Her salary range was extended to the range used for administrative employees.What is this type of pay system?

Correct AnswerverifiedShow Answer

Management must be careful to ensure that incentive payments are viewed as both a reward and an entitlement.

Correct AnswerverifiedShow Answer

The idea behind the Scanlon Plan is that employees not only should offer ideas to improve productivity,but also should be rewarded for those ideas.

Correct AnswerverifiedShow Answer

The level of incentives given to executives may depend on their level in the firm.

Correct AnswerverifiedShow Answer

At Steelcase,an office furniture maker,employees can earn more than their base pay if they produce more units,such as upholstering more chairs.This part of their pay is determined on units produced.Which of the following plans is being used here?

Correct AnswerverifiedShow Answer

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