71) Robert Katz popularized the use of financial incentives for workers whose production
exceeds some predetermined standard.
72) Most firms link employees’ pay to performance because financial incentives are extremely
successful at motivating employees to perform above required standards.
73) According to Herzberg’s theory, a manager would be able to motivate an employee with
challenging tasks.
74) In Herzberg’s Hygiene-Motivator theory, working conditions are motivator factors, and
challenging assignments are hygiene factors.
75) Herzberg’s Hygiene-Motivator theory is based on a needs theory.
76) According to Herzberg’s motivation theory, good working conditions will prevent
dissatisfaction but will not lead to feelings of satisfaction.
77) The work of Edward Deci suggests that managers should primarily rely on extrinsic rewards
to motivate employees.
78) Vroom’s expectancy theory observes that people will not pursue rewards that they find
unattractive or where their chances of success are very low.
79) According to Vroom’s theory, if expectancy, instrumentality, or valence is equal to zero,
there will be no employee motivation.
80) Behavior modification is based on the idea that people will repeat behavior for which they
are punished.
81) Behavior modification principles can be useful to managers who seek to change employee
behavior through rewards or punishments linked to performance.
82) If an employee earns an incentive in the form of a prize or cash award, the value of the award
is not included when calculating the employee’s overtime pay.
83) The complicated nature of piecework makes it an unpopular individual incentive plan among
employers.
84) The standard hour plan is like the piece rate plan except instead of getting a rate per piece,
the employee gets a premium equal to the percent by which his or her performance exceeds the
standard.
85) With a standard hour plan, employers do not need to recalculate piece rates when changes
are made to the hourly pay rate.
86) Employers are shifting away from piecework in many industries due to the incentive plan’s
poor reputation.
87) All merit raises become part of an employee’s base salary.
88) According to the FLSA, merit pay can only be given to exempt, nonmanagement employees
at a company.
89) Lump sum merit increases can be a more significant motivator than traditional merit pay
because the amount seems greater when received all at once.
90) Straight commission plans are attractive to high-performing salespeople.
91) Annual bonus plans are long-term incentives, and stock options are short-term incentives.
92) Cash, stock, stock options, stock appreciation rights, and phantom stock are known as
“golden handcuffs” because they are long-term incentives for executives.
93) Experts assert that stock options encourage executives to take dangerous risks and are to
blame for many corporate scandals.
94) Studies suggest that team incentive plans enhance productivity because the work load is
equally distributed among team members, which fosters cooperation.
95) The Scanlon plan is a type of gainsharing plan.
96) Common stock is the most common payment form used in gainsharing plans.
97) Research suggests that employee stock ownership plans discourage employees from
developing a sense of ownership in and commitment to the firm, which is why the programs are
decreasing in popularity.
98) In order for a firm to have an effective incentive plan, there should be a clear relationship
between employee effort and quantity or quality of output.
99) An effective incentive plan involves gathering evidence and evaluating the long-term effects
on employee performance.
100) Dual-career ladders are effective tools for managing the professional pay of working
mothers who desire a work-life balance.
101) Briefly describe Vroom’s theory and its three components. How can managers use Vroom’s
theory as they develop effective incentive plans?
102) Explain the advantages and disadvantages of using piecework as a pay plan.
103) Employers may award merit pay as traditional merit increases that increase an employee’s
base pay or as a lump sum merit raise. Explain the pros and cons of these two choices.
104) You are the CEO of Blue Bay Motor Boat Company, a mid-size firm that manufactures
speed boats. What incentive plan would you implement for the firm’s engineers? What incentive
plan would you implement for the firm’s managers?
105) Sometimes managers need to reinforce positive behavior but cannot turn to a cash incentive
to do so. Identify some positive reinforcement rewards that a manager could use on a day-to-day
basis to reward employees. What does research suggest about the impact of financial and
nonfinancial incentives on employees?
106) You are the manager of large used car retailer, and sales are sluggish. What incentive plan
would be best for motivating your sales team? What steps should you take to ensure that your
incentive plan is effective?
107) What is the Sarbanes-Oxley Act? How does it affect incentive plans? Do you support the
legislation? Why or why not?
108) In a brief essay, discuss the difference between annual bonuses for employees and
gainsharing plans.
109) Explain the advantages of employee stock ownership plans.
110) List the basic steps in implementing a gainsharing plan.