A mid-sized manufacturing company produced one thousand component assemblies in July of this year

Research on performance incentives suggest all of the following EXCEPT

a. employees report lower levels of pay satisfaction under pay-for-performance systems.

b. firms with pay-for-performance systems have higher customer service.

c. eighty percent of all American companies use merit pay.

d. pay-for-performance systems are more effective at retaining higher performing employees than praise or recognition systems.

(a) Difficult/Evaluation

101. A piece rate system

a. is a program providing one-time rewards to employees for specific accomplishments.

b. is a company-wide program where employees are rewarded for performance gains compared to past performance.

c. is a permanent pay raise based on past performance.

d. is a program where employees are paid on the basis of individual output produced.

(d) Easy/Knowledge

102. A mid-sized manufacturing company produced one thousand component assemblies in July of this year, far exceeding the previous record of 843 assemblies. One week later, the firm had grills brought on site and employees were treated to a steak luncheon. The steak grill-out is an example of

a. an award.

b. a bonus.

c. gainsharing.

d. merit pay.

(a) Easy/Evaluation

103. Which of the following statements regarding performance incentives is NOT true?

a. Employees who are heavily rewarded by commissions may neglect customers who provide them with a low probability of making a sale.

b. When awarded stock options, employees tend to hold on to them rather than sell them.

c. Profit sharing is not very effective at tying employee pay to individual effort.

d. Gainsharing programs can be successful if the payout formula is generous and employees can participate in the management of the company.

(b) Difficult/Evaluation

104. Which of the following statements regarding performance incentives is true?

a. Employees tend to hold onto stock options rather than sell them.

b. Merit pay is a successful program because employees recognize they will be rewarded only if performance increases.

c. Profit sharing is very effective in tying individual pay to employee effort.

d. Companies are increasingly choosing to implement team- or group-based pay-for-performance programs over individual-based pay-for-performance programs.

(d) Difficult/Evaluation

105. Which of the following statements regarding goal setting and ethics is NOT true?

a. Research shows that teachers who are rewarded for their students’ success may give their students answers during tests to improve the test scores.

b. The tendency to behave unethically occurs when employees know they are going to achieve their goals.

c. Employees have two choices when goal accomplishment is rewarded: work hard to reach the goals, or cheat.

d. When a high percentage of a CEO’s pay package consists of stock options, companies are more likely to misrepresent the financial situation of the company.

(b) Difficult/Evaluation

106. Companies can reduce the temptation to behave unethically by

a. rewarding only those who reach high goals.

b. rewarding everyone including those who completely missed their goals.

c. withholding rewards from those who are demonstrating unethical behaviors.

d. providing small recognitions for all behaviors even if the behavior has unethical overtones so that no employee feels like he has been singled out.

(c) Difficult/Evaluation

107. Which of the following statements is true regarding cultural aspects of motivation in a work environment?

a. Mexican employees work very effectively in self-managed teams.

b. Indian employees are very satisfied when they are empowered.

c. Chinese employees are very motivated when goals are very difficult.

d. Peer appraisals are very effective in collectivism cultures.

(c) Difficult/Evaluation

108. Which of the following statements regarding culture and designing a motivating work environment is true?

a. countries high in power distance respond positively to appraisal systems where lower level employees give performance feedback to their managers.

b. the paternalistic nature of Mexican companies makes methods of increasing employee empowerment easy to implement.

c. workers in India tend to respond positively to empowerment.

d. in China, goals with low specificity are more motivational than those with high specificity.

(d) Difficult/Evaluation