Question : Multiple Choice Questions 26. PFP a High Performance Work Characteristic and : 1234339

Multiple Choice Questions

26. PFP is a High Performance Work Characteristic and is linked to a firm’s performance particularly when the:

A) CEO pay is a lower base pay with the majority of compensation coming from incentive plans.

B) PFP system is closely aligned with the company’s strategic objectives.

C) company has both profit sharing and employee stock option plans established.

D) performance is measurable.

E) size of the award is sufficient to stimulate increased effort.

27. Your company has jobs that are highly interrelated and strategic in focus.  You want to provide a pay for performance incentive with relatively long measures of performance.  The best option would be to design a:

A) Merit pay plan

B) Commission pay plan

C) Profit Sharing plan

D) Piece rate plan

E) Behavioral modification plan

28. Each of the following is a reason for the failure of PFP systems EXCEPT:

A) poor conceived connection between performance and pay.

B) the level of performance-based pay is too low relative to base pay.

C) lack of objective, countable results for most jobs, requiring the use of performance ratings.

D) faulty performance appraisal systems.

E) union support for PFP systems.

29. When there is relatively little differential pay associated with using merit pay systems, one of the major problems that arise is:

A) company has a problem tracking payroll costs.

B) best performers perceive it as inequitable.

C) middle performers complain.

D) poor performers become worse.

E) top management takes the opportunity to give itself raises.

30. Which of the following plans calls for a distribution of pay based on an appraisal of a worker’s performance?

A) Merit pay plan

B) Incentive plan

C) Halsey plan

D) Commission plan

E) Profit sharing plan

31. When is a group pay for performance plan more effective than an individual plan?

A) When tasks are independent

B) When cooperation and teamwork are essential

C) When it is difficult to measure an employee’s specific contributions

D) Both “A” and “B”

E) Both “B” and “C”

32. In which of the following ways do incentive plans differ from merit pay plans?

A) They rely on countable results as basis for setting PFP rate.

B) They use performance appraisal data as the basis for the increase.

C) They use standard hours rather than labor costs to determine incentive pay.

D) They have less union support.

E) Are illegal under the Fair Labor Standards Act.

33. Each of the following is true regarding individual PFP plans EXCEPT:

A) Individual PFP plans can be divided into merit pay systems and incentive systems tied to production rates.

B) For a merit pay plan, performance is generally measured through performance appraisal.

C) Incentive plans rely on some countable result as a basis for setting the PFP rate.

D) The greatest strength of the merit pay plan is its ability to create a clear linkage between employee performance and pay.

E) Incentive pay is based on units produced and provides the closest connection between performance and pay.

34. When forced distribution is used to reduce leniency bias, this can cause __________ if a PFP system is in place.

A) increased trust in the organization

B) increased trust between employees

C) increased theft in the organization

D) decreased trust between employees

E) decreased trust in the organization

35. The individual incentive plan in which the worker is paid solely per unit of production is known as __________.

A) differential rate plan

B) straight piecework plan

C) standard hourly rate plan

D) Halsey plan

E) Rucker plan