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Chapter 4

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Strategic Compensation, 7e (Martocchio)
Chapter 4 Incentive Pay

1) Which of the following is true concerning incentive pay?
A) The award is earned only when the predetermined work objective is totally completed.
B) Motivates employees to be more productive, but does little to control payroll costs.
C) Awards are granted in one-time payouts.
D) Incentive levels are generally subjective in nature.
Answer: C
Difficulty: Difficult
Type: Concept
Learning Obj: 1

2) Which of the following is true of incentive pay?
A) Incentive pay is considered part of an employee's fringe compensation.
B) The criteria for judging an award tends to be objective, such as quantity produced.
C) Award levels are subjective.
D) The amount of the award paid …show more content…

A) gain sharing
B) team based
C) small group
D) profit sharing
Answer: A
Difficulty: Easy
Type: Concept
Learning Obj: 3

14) Gunther Rohn was rewarded for making a suggestion that saved Ewe and Eye Electronics thousands of dollars. Which type of incentive compensation approach might have worked best?
A) group incentive programs
B) gain sharing plan
C) management incentive plans
D) employee stock ownership plan
Answer: B
Difficulty: Difficult
Type: Application
Learning Obj: 3

15) What is the main objective of Scanlon plans?
A) to standardize the workforce
B) to encourage unionization
C) to increase workforce competitiveness
D) to increase employee involvement
Answer: D
Difficulty: Moderate
Type: Concept
Learning Obj: 3

16) Which gain sharing plan bases incentives on the ratio between labor costs and sales value of production (SVOP)?
A) Rucker Plan
B) referral plan
C) Scanlon Plan
D) Improshare
Answer: C
Difficulty: Difficult
Type: Concept
Learning Obj: 3
17) Which gain sharing plan focuses on lowering the percentage of labor costs using a value-added formula?
A) Rucker Plan
B) Scanlon Plan
C) behavior encouragement plan
D) Improshare
Answer: A
Difficulty: Moderate
Type: Concept
Learning Obj: 3

18) XYZ Manufacturing Co. uses a gain sharing plan that gives incentives to employees to finish products rather than to incentivize dollar savings. Therefore, this company measures productivity as the ratio of standard labor hours and actual labor hours. What

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