Question : 36. Why do Deming and other quality experts think PFP : 1234340

 

36. Why do Deming and other quality experts think PFP is a bad idea?

A) Performance appraisal diverts attention away from the systems related to the quality of the product or service.

B) PFP places too much emphasis on getting employees to do their jobs right the first time.

C) PFP links rewards valued by the employee to organizational outcomes valued by the employer.

D) Performance appraisal decreases the intensity of competition among individual workers.

E) PFP only enhances organizational performance.

37. Which of the following is associated with Taylor’s differential rates?

A) There are two outcomes related to pay: one for performing below standard and the other for meeting or exceeding the standard.

B) They are used to pay a higher ranked worker more than one who is lower ranked.

C) The rate is based on a productivity index called labor contribution to value added.

D) They involve higher levels of employee involvement.

E) They are generally tied to company profits.

38. The Standard Hourly Rate:

A) pays the worker an incentive based on units of production.

B) relies on countable results as a basis for setting the PFP rate.

C) uses a formula to determine the employees share of cost savings.

D) uses a production standard that is expressed in time units.

E) is usually folded into the base pay of the recipient and is usually granted as a percentage of a worker’s base pay.

39. Acme Shoe Company is expanding nation-wide, and they wish to develop an incentive plan for their door-to-door salespeople. Which of the following plans is most appropriate?

A) Piece-rate plan

B) Commission plan

C) Profit sharing plan

D) Straight salary

E) Scanlon plan

40. All of the following statements are true regarding profit sharing plans EXCEPT:

A) they are often used as a means of reducing turnover.

B) they have been criticized as being remote and unrelated to performance.

C) they were designed to motivate cost savings.

D) the group that saves the most money receives the bonus.

E) they provide long-term incentives.

41. Which of the following is TRUE regarding group incentive plans?

A) Increased interest in PFP has resulted in a declining number of group incentive plans.

B) The use of group plans is particularly effective when cooperation and teamwork are less essential.

C) Group plans are most useful when tasks are so interrelated that it is difficult to identify a measure of individual output.

D) There is increasing evidence that group incentives do NOT increase productivity.

E) Individual plans are generally preferable to group plans when tasks are interrelated and teamwork is essential.

42. The Scanlon Plan:

A) uses standard hours rather than labor costs to determine incentive pay.

B) motivates the worker through rights to stock a fixed price which may be lower than the current stock market value.

C) is based on incentive pay based on units produced.

D) provides for less employee involvement than the Rucker Plan.

E) provides for a high level of employee participation through labor-management committees.

43. Research on Employee Stock Ownership Plans (ESOPs) shows:

A) ESOPs work better when combined with extensive employee involvement.

B) They have little effect on profitability.

C) Decrease in employee absenteeism under ESOPs.

D) ESOPs work better when the price of the stock is stable.

E) Restricted company flexibility in a competitive environment.

44. Which of the following statements is FALSE regarding short-term and long-term incentives?

A) Short-term incentives are usually additional salary rewards that an employee can receive on a quarterly or yearly basis.

B) Short-term incentives are based on meeting short-run objectives such as a quarterly sales or a production goal.

C) Long-term rewards focus on future profitability.

D) Stock options are a common short-term incentive.

E) Long-term incentives are usually best for upper-level executives who have a wider area of discretion in making decisions that affect the firm.

45. Which of the following is not a factor to be considered in designing a gain sharing program?

A) Potential for employee efforts

B) Organized employee suggestion system

C) Workforce interdependence.

D) Workforce composition.

E) Key organizational factors that affect the pay system

46. As the manager of a sales team, you want to establish a pay for performance system.  Currently they receive 100% commission in the form or cash.  You want to diversify the pay and control the budget while offering value to your staff.  Which of the following would you not consider?

A) Grant stock options for increases in repeat customer business.

B) Offer gift certificates to the gym, owned by the company, for sales above quota.

C) Increase their commission dollars per sale when they sell as a team.

D) Present a trip to the Bahamas, on the company yacht, to the team with the highest sales.

E) Award tickets for the company’s box seats at the local music amphitheatre.

47. You have announced a pay for performance system, however, your budget is not large enough to truly differentiate between your top performers and your marginal performers.  What is a possible outcome?

A) You may end up with high turnover among your marginal performers because of perceived inequity

B) All employees will be more motivated to achieve the new performance goals.

C) Employees will be motivated to work together in teams to increase the likelihood of rewards.

D) The composition of the workforce will shift to employees who thrive in high-risk situations.

E) Your top performers will perceive the plan as inequitable and may leave the company

48. A manager on a construction site wants to encourage safety on the job to minimize accidents.  What sort of pay for performance system would you recommend?

A) Increase the employee’s base pay.

B) Introduce a behavioral encouragement plan.

C) Change worker’s pay from base pay to a draw commission plan.

D) Implement a piece rate reward plan.

E) Increase the level of benefits offered to all employees.

49.  A current trend is to develop individual pay for performance plans where the incentive pay is:

A) Based on current performance, and not permanently tied to base pay

B) Linked to an absolute percentage of a the employee’s base pay

C) A variable percentage of the employee’s base pay.

D) A percentage of base pay budgeted a the beginning of the year and provides a permanent increase to an individual’s salary

E) Determined by the board of directors for all employees, similar to executive compensation.

50. Which reward is best suited to the following situation:  Production workers making close to minimum wage; the manager wants to introduce a pay for performance plan that will increase production numbers.  Work is interdependent.  Production output is measured daily.

A) Individual bonus based on a percentage of company profits, paid at the end of the year.

B) Group incentive; reward is a grocery store gift certificate of $100 awarded weekly.

C) Merit increase determined annually and typically 1 to 3% of base pay.

D) Individual incentive, reward is two tickets to Disney World awarded at the end of the year.

E) Group incentive; reward is ten cent increase to base pay for the next year’s pay.