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Q:
Jessica recently had outpatient surgery. Her insurance plan requires a deductible of $500. This means that the insurance company will pay 100% of the first $500, but after that will only pay a percentage of the bill.
Q:
On average, medical benefits and payments for time not worked consume about the same amount of each benefit dollar.
Q:
Additional Case 12.1
The HR Director of The Camera Center is leading the executive team through a review of the company's benefits plan. He begins by explaining how the firm funds the benefits plan. After a few questions on that matter, he moves on to clarify what they must offer by law and what benefits the firm would like to provide.
A highly entrepreneurial, performance-driven company, The Camera Center provides an excellent profit-sharing plan and one of the best retirement packages in the industry. The firm commits a high portion of compensation funds to the benefits plan. The workforce tends to be college-educated, young professionals who are just starting their families.
The CEO wants the total benefits plan reviewed and repackaged, if necessary, to align it with The Camera Center's business culture and strategy. He also wants to contain costs as much as possible and simplify benefits administration.
Refer to Additional Case 12.1. When reviewing the legally required benefits, the HR Director would most likely address:
A) health insurance.
B) pensions and retirement plans.
C) family and medical leave.
D) life and disability insurance.
Q:
Additional Case 12.1
The HR Director of The Camera Center is leading the executive team through a review of the company's benefits plan. He begins by explaining how the firm funds the benefits plan. After a few questions on that matter, he moves on to clarify what they must offer by law and what benefits the firm would like to provide.
A highly entrepreneurial, performance-driven company, The Camera Center provides an excellent profit-sharing plan and one of the best retirement packages in the industry. The firm commits a high portion of compensation funds to the benefits plan. The workforce tends to be college-educated, young professionals who are just starting their families.
The CEO wants the total benefits plan reviewed and repackaged, if necessary, to align it with The Camera Center's business culture and strategy. He also wants to contain costs as much as possible and simplify benefits administration.
Refer to Additional Case 12.1. The HR Director's initial explanation is about the ________ of the benefits plan.
A) contributions
B) co-payments
C) deductible
D) flexibility
Q:
Health insurance typically covers all of the following EXCEPT:
A) prescriptions.
B) medical leave.
C) hospital costs.
D) physician charges.
Q:
The growth of benefits costs has pushed employers to:
A) diversify the workforce.
B) hire more part-time employees.
C) move from managed care to traditional health insurance.
D) ask for more government intervention in the health industry.
Q:
All of the following are legally required benefits EXCEPT:
A) paid time off.
B) Social Security.
C) workers' compensation.
D) unemployment insurance.
Q:
Legally required benefits include only:
A) health insurance.
B) life insurance.
C) medical leave.
D) disability insurance.
Q:
Which of the following is most likely true?
A) Unions have done very little with regard to indirect compensation for members.
B) Benefits given at unionized firms are typically given at nonunionized firms at a later date.
C) Most large unions have been unsuccessful at securing and retaining pensions for members.
D) Unions rarely request employee benefits beyond those that are legally required.
Q:
Social Security and unemployment insurance benefits originated in:
A) 1971.
B) 1964.
C) 1958.
D) 1935.
Q:
Raj has personal investment plans for retirement. He also is involved with his company's retirement plan; his company contributes to his retirement each month. His personal contributions are ________, and his company's contributions are ________.
A) tax-free / tax-deferred
B) tax-deferred / tax-deferred
C) tax-deferred / tax-free
D) tax-free / tax-free
Q:
Employee benefits accounted for about ________ of employers' payrolls in 2013.
A) 10%
B) 20%
C) 30%
D) 40%
Q:
Kevin's new employer informs him that he will be allowed a flexible benefits program for the duration of his employment at Comfortable Furniture. This means that Kevin will most likely be able to:
A) receive paid time off after six months with the firm.
B) select the benefits he wants most from a menu of options.
C) receive more direct compensation by forfeiting employee benefits.
D) reduce his coinsurance payments by selecting a managed care plan.
Q:
Which term refers to annual out-of-pocket expenses that an insurance policyholder must make before an insurance plan makes any reimbursements?
A) Co-payment
B) Contribution
C) Coinsurance
D) Deductible
Q:
Retirement benefits are primarily an effective employee retention tool because they:
A) provide valuable tax savings to employers.
B) decrease in value when an employee job-hops.
C) increase over the time that an employee works for a firm.
D) offer employees the opportunity to take early retirement.
Q:
Effective employee benefits packages:
A) help firms train and motivate their employees.
B) maximize traditional insurance coverage.
C) help firms recruit and retrain employees.
D) replace the need for unemployment insurance.
Q:
Which of the following accounts for the largest portion of indirect compensation paid by most employers?
A) Legally required benefits
B) Payments for time not worked
C) Retirement and savings plans
D) Life and disability insurance
Q:
American companies spend an average of nearly ________ per year per employee on benefits.
A) $9,000
B) $12,000
C) $20,000
D) $25,000
Q:
The benefits portion of a compensation package most likely plays an important role in:
A) rewarding employees' performance.
B) attracting and retaining employees.
C) managing the profits of the company.
D) managing employee performance.
Q:
Employee benefits are used to:
A) reward employee performance.
B) provide security for employees.
C) motivate greater productivity.
D) comply with federal regulation.
Q:
Sadie is meeting with her boss to discuss her indirect compensation, which is another term for:
A) nonmonetary perks.
B) employee benefits.
C) base pay.
D) total compensation.
Q:
With regards to employee benefits, the United States differs from other developed countries in that:
A) the United States government covers the costs of most employee benefits.
B) United States employers provide a small percentage of employee benefits.
C) most other countries provide better benefits than the United States.
D) United States employers provide most of their employees' benefits.
Q:
Customer service rewards for salespeople are typically individual-based, team-based, or plant-based.
Q:
Benson Marketing is a small firm with fewer than 100 employees. The CEO wants to implement a pay-for-performance system. The CEO wants the plan to motivate employees, attract top workers, and reduce fixed costs. Which of the following would be most appropriate for Benson?
A) Straight-commission
B) Profit sharing
C) Gainsharing
D) Merit pay
Q:
In regards to pay-for-performance programs, which of the following is most likely characteristic of small firms than large firms?
A) Conflicts about pay differences are minimal because of close co-worker relationships.
B) Linking pay incentives to team performance is easier at small firms than large ones.
C) Small firms lack personnel able to design and administer complex incentive plans.
D) Clearly established grievance procedures allow employees to address unfair pay.
Q:
A straight-salary sales compensation plan has a tendency to encourage salespeople to emphasize sales volume over customer service.
Q:
If a sales manager wants his sales professionals to service the product and spend time with customers, then a straight salary compensation plan is best.
Q:
A survey of 1,400 employers showed that ________ of them factor customer satisfaction into their calculation of incentive payments to employees.
A) 75%
B) 55%
C) 35%
D) 15%
Q:
What is the difference between a straight commission and a straight salary system? What are the benefits of each? How can a firm ensure that a sales team does not overlook customer satisfaction for high sales volume?
Q:
What is the difference between stock options, stock purchase plans, and stock awards as given to corporate executives? Why are long-term incentive plans for executives frequently criticized?
Q:
________ are noncash incentives given to a firm's executives.
Q:
Firms that give perks to executives are not legally required to disclose such awards..
Q:
Long-term incentive plans are linked very closely with executive performance.
Q:
Stock options provide the executive with "free" company stock, normally with no strings attached.
Q:
Additional Case 11.1
The HR department at Sussex Enterprises has been asked to evaluate the effectiveness of the firm's team-based incentive plan. Managers at the firm report a decline in worker performance, an increase in interpersonal conflicts, and an increase in complaints about free riding team members. In addition, the manufacturing group has been accused of producing more units than the marketing group can sell. HR at Sussex needs to determine if the current incentive plan is appropriate or should be replaced.
Refer to Additional Case 11.1. Sussex executives have decided to change the firm's pay-for-performance plan to one that is plantwide. Which of the following characteristics of Sussex, if true, best supports this decision?
A) Sussex is a midsize firm in a stable product market.
B) Sussex is a large, global firm in a cyclical product market.
C) Most employee contributions at Sussex can be clearly isolated.
D) Sussex managers want to encourage innovation within work groups.
Q:
Which of the following is a negative aspect of straight-salary sales compensation plans?
A) Increase in employee turnover
B) Increase of fixed compensation costs
C) Complicated to design and administer
D) Reduced motivation to spend time with customers
Q:
When setting up a compensation plan for salespeople to encourage them to service accounts, a ________ plan is the best choice.
A) straight commission
B) combination
C) straight salary
D) merit
Q:
Tanglewood Enterprises wants a sales compensation plan that is simple to administer, controls sales costs, and encourages salespeople to be entrepreneurial. Which of the following would be the best compensation plan for Tanglewood?
A) Straight commission plan
B) Combination plan
C) Straight salary plan
D) Merit plan
Q:
In what way are compensation programs for salespeople different from compensation programs for other types of employees?
A) Accurate market data on pay practices are easier to find for salespeople than for other types of employees.
B) The reward system for non-salespeople is more supervisory than it is for salespeople.
C) There is less performance variation between salespeople than between non-salespeople.
D) Perceptions of pay inequity are a lesser concern for salespeople than for non-salespeople.
Q:
Most companies use a ________ when setting up their sales compensation plan.
A) straight commission plan
B) combination plan
C) straight salary plan
D) gainsharing plan
Q:
Which term refers to a bonus given to executives that is proportional to the change in company stock prices, rather than changes in profitability measures?
A) Stock appreciation rights
B) Performance plan units
C) Performance share plans
D) Phantom stock
Q:
________ permit the executive to buy stock at, or below, cost during a limited time.
A) Formula-based stocks
B) Restricted stock plans
C) Stock appreciation rights
D) Stock purchase plans
Q:
In general, perquisites are:
A) part of team-based pay-for-performance plans.
B) offered to top-performing employees at all levels.
C) nonmonetary incentives awarded to executives.
D) are not well received by most executives.
Q:
Which of the following is the LEAST likely reason for the distance between executive performance and long-term incentives?
A) Executives rarely know how much their equity in the firm is worth.
B) Executives are unlikely to have control over the value of the company's stock.
C) Incentive plans are not always consistent with the firm's long-term strategic objectives.
D) Golden parachutes fail to address what to pay executives when they are terminated from a firm.
Q:
Approximately ________ of companies reward their executives with short-term year-end bonuses.
A) 25%
B) 40%
C) 75%
D) 90%
Q:
Which of the following is the LEAST likely result of using long-term income incentives to reward CEOs?
A) Frequent CEO turnover
B) Soaring CEO pay increases
C) CEO options losing value when stock market falls
D) Unclear connection between CEO pay and firm performance
Q:
What types of plantwide incentive plans are available to firms? What are the primary disadvantages of such plans?
Q:
What are the advantages and disadvantages of team-based pay-for-performance plan? Under what conditions are such compensation plans most effective? Why are team-based incentives less appropriate tools for rewarding high performers at small firms?
Q:
What are the disadvantages of individual-based pay-for-performance plans? What are the disadvantages of plantwide plans? How do firms benefit from implementing multiple-layers-of-rewards systems?
Q:
A corporate-wide pay-for-performance plan that rewards employees with company stocks, either as an outright grant or at a favorable price that may be below market value, is referred to as a(n) ________.
Q:
A corporate-wide pay-for-performance plan that uses a formula to allocate a portion of declared profits to employees is referred to as ________.
Q:
________ is a plantwide pay-for-performance plan in which a portion of the company's cost savings is returned to workers, usually in the form of a lump-sum bonus.
Q:
________ is a theory of behavior holding that people tend to do those things that are rewarded.
Q:
A one-time reward usually given in the form of a tangible prize is called a(n) ________.
Q:
A(n) ________ is a financial incentive that is given on a one-time basis and does not raise the employee's base pay permanently.
Q:
Corporatewide pay-for-performance compensation plans place employees at considerable financial risk.
Q:
Profit sharing is best used in small to medium-sized firms, while gainsharing works in any size company.
Q:
A common problem associated with gainsharing is that such plans exacerbate normal labor and management tensions.
Q:
Gainsharing can significantly improve productivity, but at the same time decrease production quality, as employees strive to produce more at the expense of quality.
Q:
Plantwide pay-for-performance plans are likely to be effective in large companies that function in an unstable product market.
Q:
A significant advantage of team-based pay-for-performance plans is that they eliminate the social pressure to limit performance.
Q:
Team-based pay plans normally reward team members individually based upon how much they contributed to the team's overall performance.
Q:
The best environment for individual-based pay-for-performance plans is with jobs with minimal autonomy.
Q:
It is not an uncommon problem for individual-based pay-for-performance plans to work against achieving quality goals.
Q:
The future rewards theory maintains that people tend to do those things that are rewarded.
Q:
Awards, merit pay, and bonuses are all similar in that they are paid once a year, do not raise the employee's base salary, and are based on performance.
Q:
Team-based pay plans are the most widely-used pay-for-performance plans in industry.
Q:
Additional Case 11.2
Richland Manufacturing uses an individual-based pay-for-performance plan for employees.
Manager input in the form of performance evaluations primarily determines individual employee rewards. Performance appraisals at Richland are used for multiple purposes including compensation, training, and work planning. Since implementing the plan, many managers have noticed that employees tend to play it safe by setting modest rather than challenging goals for themselves. Employees have also been avoiding important tasks, such as satisfying the needs of customers and keeping work areas neat. In addition, most employees express disbelief that pay and performance are actually linked. As a result, Richland is considering making modifications to the system.
The HR Director wants a system that will reward all employees based on the entire company's performance because he wants to increase employee commitment. The VP of Operations wants to reward specific productivity and quality improvements with a simply structured system that considers labor costs as well as other production expenses. The VP of Operations also believes that labor and management should work together to allocate the rewards.
Refer to Additional Case 11.2. The VP of Operations would most likely favor a:
A) profit sharing plan.
B) team-based plan.
C) Scanlon plan.
D) Rucker plan.
Q:
Additional Case 11.2
Richland Manufacturing uses an individual-based pay-for-performance plan for employees.
Manager input in the form of performance evaluations primarily determines individual employee rewards. Performance appraisals at Richland are used for multiple purposes including compensation, training, and work planning. Since implementing the plan, many managers have noticed that employees tend to play it safe by setting modest rather than challenging goals for themselves. Employees have also been avoiding important tasks, such as satisfying the needs of customers and keeping work areas neat. In addition, most employees express disbelief that pay and performance are actually linked. As a result, Richland is considering making modifications to the system.
The HR Director wants a system that will reward all employees based on the entire company's performance because he wants to increase employee commitment. The VP of Operations wants to reward specific productivity and quality improvements with a simply structured system that considers labor costs as well as other production expenses. The VP of Operations also believes that labor and management should work together to allocate the rewards.
Refer to Additional Case 11.2. Employees avoiding important tasks is most likely a problem associated with:
A) lack of promotion opportunities for employees.
B) employee motivation as explained by expectancy theory.
C) the deterioration of quality that comes with individual-based plans.
D) the single-mindedness and focus that comes with individual-based plans.
Q:
Additional Case 11.2
Richland Manufacturing uses an individual-based pay-for-performance plan for employees.
Manager input in the form of performance evaluations primarily determines individual employee rewards. Performance appraisals at Richland are used for multiple purposes including compensation, training, and work planning. Since implementing the plan, many managers have noticed that employees tend to play it safe by setting modest rather than challenging goals for themselves. Employees have also been avoiding important tasks, such as satisfying the needs of customers and keeping work areas neat. In addition, most employees express disbelief that pay and performance are actually linked. As a result, Richland is considering making modifications to the system.
The HR Director wants a system that will reward all employees based on the entire company's performance because he wants to increase employee commitment. The VP of Operations wants to reward specific productivity and quality improvements with a simply structured system that considers labor costs as well as other production expenses. The VP of Operations also believes that labor and management should work together to allocate the rewards.
Refer to Additional Case 11.2. Most Richland managers want to use an individual-based pay-for-performance plan to reward high performers but are concerned about increasing employees' base pay permanently due to costs. Which of the following would most likely be appropriate in this case?
A) A merit pay program
B) A bonus program
C) A Rucker plan
D) Gainsharing
Q:
Additional Case 11.2
Richland Manufacturing uses an individual-based pay-for-performance plan for employees.
Manager input in the form of performance evaluations primarily determines individual employee rewards. Performance appraisals at Richland are used for multiple purposes including compensation, training, and work planning. Since implementing the plan, many managers have noticed that employees tend to play it safe by setting modest rather than challenging goals for themselves. Employees have also been avoiding important tasks, such as satisfying the needs of customers and keeping work areas neat. In addition, most employees express disbelief that pay and performance are actually linked. As a result, Richland is considering making modifications to the system.
The HR Director wants a system that will reward all employees based on the entire company's performance because he wants to increase employee commitment. The VP of Operations wants to reward specific productivity and quality improvements with a simply structured system that considers labor costs as well as other production expenses. The VP of Operations also believes that labor and management should work together to allocate the rewards.
Refer to Additional Case 11.2. Which of the following would most likely improve the success of Richland's current incentive plan?
A) Limiting the use of performance appraisals to compensation purposes
B) Offering team-based pay in addition to individual bonuses
C) Providing Scanlon plans to all employees
D) Encouraging employee competition
Q:
Additional Case 11.1
The HR department at Sussex Enterprises has been asked to evaluate the effectiveness of the firm's team-based incentive plan. Managers at the firm report a decline in worker performance, an increase in interpersonal conflicts, and an increase in complaints about free riding team members. In addition, the manufacturing group has been accused of producing more units than the marketing group can sell. HR at Sussex needs to determine if the current incentive plan is appropriate or should be replaced.
Refer to Additional Case 11.1. In addition to rewarding high performers, Sussex executives want to gain the maximum tax advantage, increase employee commitment, and maximize financial flexibility. Which pay-for-performance plan would be most appropriate for Sussex?
A) Individual-based
B) Corporate-wide
C) Plantwide
D) Team-based
Q:
Additional Case 11.1
The HR department at Sussex Enterprises has been asked to evaluate the effectiveness of the firm's team-based incentive plan. Managers at the firm report a decline in worker performance, an increase in interpersonal conflicts, and an increase in complaints about free riding team members. In addition, the manufacturing group has been accused of producing more units than the marketing group can sell. HR at Sussex needs to determine if the current incentive plan is appropriate or should be replaced.
Refer to Additional Case 11.1. Sussex executives have decided to change the firm's pay-for-performance plan to one that is individual-based. Which of the following best supports this decision?
A) The organizational structure at Sussex has many hierarchical levels.
B) Most positions at Sussex require autonomy and very little cooperation.
C) Most Sussex employees are intrinsically motivated and committed to their work.
D) Consumer demand for products and services offered by Sussex is relatively stable.
Q:
Additional Case 11.1
The HR department at Sussex Enterprises has been asked to evaluate the effectiveness of the firm's team-based incentive plan. Managers at the firm report a decline in worker performance, an increase in interpersonal conflicts, and an increase in complaints about free riding team members. In addition, the manufacturing group has been accused of producing more units than the marketing group can sell. HR at Sussex needs to determine if the current incentive plan is appropriate or should be replaced.
Refer to Additional Case 11.1. Which of the following would most likely improve the effectiveness of the current pay-for-performance plan at Sussex?
A) Establishing specific group goals
B) Offering gainsharing opportunities
C) Allowing employees to form their own teams
D) Providing the manufacturing group with better technology
Q:
Additional Case 11.1
The HR department at Sussex Enterprises has been asked to evaluate the effectiveness of the firm's team-based incentive plan. Managers at the firm report a decline in worker performance, an increase in interpersonal conflicts, and an increase in complaints about free riding team members. In addition, the manufacturing group has been accused of producing more units than the marketing group can sell. HR at Sussex needs to determine if the current incentive plan is appropriate or should be replaced.
Refer to Additional Case 11.1. Which of the following would be the best way to minimize free-riding at Sussex?
A) Making adjustments to the performance appraisal system
B) Requiring all team members to attend training sessions
C) Basing a portion of incentive payments on peer reviews
D) Increasing opportunities for intergroup competition
Q:
Corey is the president of a large corporation whose plants are very interdependent. Her corporation is vulnerable to cyclical ups and downs in product demand. Which of the following would be the best pay-for-performance plan for her corporation?
A) Scanlon plan
B) Rucker plan
C) ESOP program
D) Merit pay plan
Q:
Profit-sharing plans are most attractive to employers and employees alike when the firm:
A) employs mostly older workers who are near retirement age.
B) faces highly cyclical ups and downs in product demand.
C) is a small start-up in the high-tech field.
D) has high labor costs.
Q:
Employees who are rewarded on the basis of corporate-wide pay-for-performance plans:
A) show a clear increase in productivity, morale, and loyalty.
B) are put at risk due to factors affecting corporate stock prices.
C) are financially secure if they are in a profit-sharing plan.
D) typically pay very high taxes for their incentives.
Q:
Profit-sharing and ESOP-type compensation plans feature some significant drawbacks, such as:
A) having only a limited effect on organizational productivity.
B) increasing internal competition among employees.
C) generating labor-management conflicts.
D) increasing corporate tax responsibilities.
Q:
Which of the following is an advantage of corporatewide pay-for-performance plans?
A) Financial flexibility
B) Group cohesiveness
C) Minimal employee risks
D) Significant productivity improvements