Question : 51. The compensation program that least requires a participatory management style : 1250917

51. The compensation program that least requires a participatory management style is 
A. gainsharing plan.
B. incentive pay.
C. ESOPs.
D. profit sharing.

Under incentive pay programs, the management must exercise greater control over the employee.

52. Which one of the following pay programs has the greatest frequency of payout? 
A. Merit pay
B. Profit sharing
C. Incentive pay
D. Gainsharing

Incentives have a weekly payout. Merit pay and profit sharing payouts are on an annual or a semi annual basis. Gainsharing payouts occur either on a monthly or quarterly basis.

53. In merit pay programs, an individual’s compa-ratio represents his or her 
A. performance rating.
B. position in the pay range.
C. comparable worth versus others.
D. ratio of pay to benefits.

The compa-ratio helps control compensation costs and maintains the integrity of the pay structure.

54. Many merit increase grids indicate both the size and frequency of pay increases as determined by the individual’s performance rating and which one of the following? 
A. An individual’s compa-ratio
B. An individual’s pay grade
C. An individual’s seniority
D. An individual’s time spent in the current pay grade

The size and frequency of pay increases are determined by the individual’s performance rating and the individual’s compa-ratio.

55. A characteristic of most merit pay programs is 
A. frequent feedback.
B. feedback comes primarily from the supervisor.
C. linking of pay increases to group performance.
D. linking of pay increases to output.

The majority of information on individual performance is collected from the immediate supervisor.

56. In order to control compensation costs, administrators of merit pay programs must closely monitor the compa-ratio and what other factor? 
A. The number of pay grades in the pay structure.
B. The distribution of performance ratings.
C. The number of new hires.
D. The company’s stock price.

By controlling the distribution of performance ratings organizations can limit the number of individuals who fall into specific performance categories, thereby controlling the compa-ratios and thus the overall compensation costs.

57. Deming’s concerns about too much emphasis on “individual” performance in organizations are based on all of the following except 
A. system factors (e.g., coworkers, materials, and equipment) can affect individual performance.
B. merit pay encourages individualistic behaviors.
C. performance ratings are essentially “the result of a lottery.”
D. employees discuss and compare their performance ratings with those of other employees.

System factors are largely outside the worker’s control. Deming argued that the performance rating is essentially “the result of a lottery.” Performance rating systems need to be considered with caution or they can lead to behavior that is too individualistic and competitive.

58. Criticisms of traditional merit pay programs include all but one of the following. Name the exception. 
A. They tend to create an entitlement mentality
B. They tend to be costly to develop and time-consuming to administer
C. They tend to increase labor costs over the long run
D. They tend to be subject to distributive and procedural process issues

Employees assess the fairness of rewards based on how much they receive (distributive justice) and the process used to decide how much (procedural justice). Small differences in pay can add up to large differences over time. A big merit increase given early in an employee’s career remains part of base salary “forever.” It does not have to be re-earned each year and the cost to the organization grows over time.

59. When a supervisor gives an employee the opportunity to express his or her views, this is an example of 
A. distributive justice.
B. procedural fairness.
C. trust.
D. autonomy.

The opportunity to provide input is an important aspect of procedural justice.

60. The pay system that motivates performance by measuring physical output is 
A. profit sharing.
B. a seniority system.
C. a merit system.
D. an individual incentive system.

The individual incentive system measures performance based on physical output rather than by subjective measures.