Lussier, Human Resources Management 3e
SAGE Publishing, 2019
Chapter 12: Incentive Pay
Test Bank
Multiple Choice
1. ______ allow managers to vary the reward given employees based on the individual
(or group) effort put into the work process.
A. Incentives
B. Entitlement
C. Pay structure
D. Rate range
2. ______ is compensation that depends on some measure of performance or results in
order to be awarded.
A. Entitlement
B. Variable pay
C. Salary
D. Benefit pay
3. The use of pay for ______ rather than hours worked is the trend today.
A. performance
B. skills
C. entitlement
D. ability
Lussier, Human Resources Management 3e
SAGE Publishing, 2019
4. With ______, an organization is rewarding employees for past performance, but are
doing it in the hope that employees will want similar rewards in the future and therefore
will repeat the desired behaviors.
A. entitlement
B. incentives
C. salaries
D. overtime
5. In compensation, ______ moves some of the risk associated with having employees
from the firm to the individual.
A. a rate range
B. salaries
C. variable pay
D. entitlement
6. ______ pay must target the strategic goals of the organization to be beneficial.
A. Incentive
B. Rate
C. Bonus
D. Entitlement
Lussier, Human Resources Management 3e
SAGE Publishing, 2019
7. Rajiv offered his team a bonus if the team completes the project 1 week ahead of
time. Rajiv is using ______ as an incentive
A. piecework plan
B. variable pay
C. commission
D. profit sharing
8. ______ incentives reinforce performance of a single person with a reward that is
significant to that person.
A. Group
B. Individual
C. Lateral
D. Structural
9. It may be very difficult or even impossible in some jobs to identify ______ output on
which managers can base an incentive.
A. bonus
B. individual
C. merit
D. social
Lussier, Human Resources Management 3e
SAGE Publishing, 2019
10. If rewards are distributed based on personal performance levels, a perception of
______ can be created if managers don’t make clear why some are provided with
greater incentives than others.
A. fairness
B. merit
C. variableness
D. favoritism
11. Employees may focus only on the items that are being measured for ______
payments, ignoring other important tasks.
A. incentive
B. variable
C. group
D. rate
12. Individual incentive plans require that managers keep track of individual efforts and
are much more ______-intensive than group incentives.
A. rate
B. time
C. pay
D. social
Lussier, Human Resources Management 3e
SAGE Publishing, 2019
13. At the beginning of the quarter, Mohammed sat down with his manager and set
three goals for the next 3 months. The achievement of each goal will depend on
Mohammed. No one else in his work group can affect the work toward the goal. Which
advantage of individual incentives does this illustrate?
A. They make it easy to evaluate employee’s effect on team.
B. They offer the ability to match rewards to employee desires.
C. They promote the link between performance and results.
D. They may motivate less productive employees to work harder.
14. When she is not working, Sugi trains to run marathons. She wishes she had more
time to travel to various races but work keeps her busy. Kevin does not want time off
work. He needs to earn as much overtime as possible to pay off his college loans. The
company recently offered either a week’s pay or a week off as the bonus to the
salesperson who made the most sales. Both Sugi and Marcus worked hard to win.
Which advantage of individual incentives does this illustrate?
A. They make it easy to evaluate individual employees.
B. They offer the ability to match rewards to employee desires.
C. They promote the link between performance and results.
D. They may motivate less productive employees to work harder.
15. Sara has been slacking at work. At the beginning of the quarter, Sara sits down with
her manager and sets three goals. If Sara achieves those three goals in the next three
months, she will receive a $1,000 bonus. Which advantage of individual incentives does
this illustrate?
A. They make it easy to evaluate individual employees.
B. They offer the ability to match rewards to employee desires.
C. They promote the link between performance and results.
D. They may motivate less productive employees to work harder.
Lussier, Human Resources Management 3e
SAGE Publishing, 2019
16. Much fanfare was made about Quon’s latest bonus in the office. He has always
been a high performer. However, this year he received an extra-large bonus. His
coworker Hannah got a little tired of hearing about Quon’s bonus and decided that next
year she would win some of the bonus money. Which advantage of individual incentives
does this illustrate?
A. They make it easy to evaluate individual employees.
B. They offer the ability to match rewards to employee desires.
C. They promote the link between performance and results.
D. They may motivate less productive employees to work harder.
17. Naoyuki is a surgical technologist at a hospital. His job involves helping out during
surgeries. Among other things, he hands supplies to surgeons and surgeons’
assistants, holds retractors and other instruments, and performs various tasks
requested by the surgeon. An individual bonus plan would not work for Naoyuki
because of which disadvantage of individual incentives?
A. Many jobs have no direct output.
B. Individual incentives may motivate undesirable employee behaviors.
C. The record-keeping burden needed for individual incentives is high.
D. Individual incentives may not fit organizational culture.
Lussier, Human Resources Management 3e
SAGE Publishing, 2019
18. As a product promoter, Emilia receives a commission on every sale made as a
result of her presentations. However, part of her job also is to keep the area around her
display neat and to return the items she promotes to their correct locations following
demonstrations. Since Emilia does not get a bonus for cleaning up, she leaves her area
messy and does not put away items following demonstrations. Which disadvantage of
individual incentives does this illustrate?
A. Many jobs have no direct output.
B. Individual incentives may motivate undesirable employee behaviors.
C. The record-keeping burden needed for individual incentives is high.
D. Individual incentives may not fit organizational culture.
19. With the introduction of an individual incentive program, Caitlin has begun spending
an hour each day documenting her employees’ outcomes. Which disadvantage of
individual incentives does this illustrate?
A. Many jobs have no direct output.
B. Individual incentives may motivate undesirable employee behaviors.
C. The record-keeping burden needed for individual incentives is high.
D. Individual incentives may not fit organizational culture.
20. With the introduction of an individual incentive program, Aleksander feels like he is
competing with the other members of his team instead of working together with them.
While the individual incentive plan could mean more money for some members of the
team, most members of the team feel the same way Aleksander does. They wish they
could go back to working together for a group incentive. Which disadvantage of
individual incentives does this illustrate?
A. Many jobs have no direct output.
B. Individual incentives may motivate undesirable employee behaviors.
C. The record-keeping burden needed for individual incentives is high.
D. Individual incentives may not fit organizational culture.
Lussier, Human Resources Management 3e
SAGE Publishing, 2019
21. ______ incentives provide reinforcement for actions of more than one individual
within the organization.
A. Individual
B. Group
C. Cultural
D. Structural
22. When it comes to group incentives, ______ may be able to stay hidden within the
group while allowing others to do the majority of the group work.
A. social loafers
B. golden parachutes
C. perquisites
D. merits
23. Social loafers ______.
A. give 100% both individually and in a group setting
B. are shy and reserved in company social settings
C. strive to be recognized as an outstanding performer in a group setting
D. avoid exerting maximum effort in group settings because it is difficult to pick out
individual performance
Lussier, Human Resources Management 3e
SAGE Publishing, 2019
24. Manuela wants to provide an incentive program to reinforce the collective actions of
all of her subordinates in the returns department team. In other words, Manuela would
like to begin a(n) ______ program.
A. variable incentive
B. executive incentive
C. individual incentive
D. group incentive
25. Carol was recently put on a team to develop a new product for Acme Global.
Because there are so many people on the team, Carol thinks no one will notice if she
does not participate or do any work for the team. Carol is a(n) ______.
A. social loafer
B. golden parachute
C. individual performer
D. merit seeker
26. ______ avoid providing their maximum effort in group settings because it is difficult
to pick out individual performance.
A. Golden parachutes
B. Social loafers
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SAGE Publishing, 2019
C. Perquisites
D. Merits
27. Ever since the organization began a group incentive program, John has noticed that
his team appears more loyal to one another than they were before the group incentive
program began. This illustrates which advantage of group incentives?
A. They promote better teamwork.
B. They broaden individual outlook.
C. They require less supervision.
D. They are easier to develop than individual incentive programs.
28. Now that his team is working toward a group incentive, Matteo is paying more
attention to what others in the organization do and how their actions affect his group.
This illustrates which advantage of group incentives?
A. They promote better teamwork.
B. They broaden individual outlook.
C. They require less supervision.
D. They are easier to develop than individual incentive programs.
29. Now that his team is working toward a group incentive, Steven does not leave work
early or take long lunches. He feels that doing so would let down his group members.
Lussier, Human Resources Management 3e
SAGE Publishing, 2019
He has started working harder and slacking off less to help make the group successful.
This illustrates which advantage of group incentives?
A. They promote better teamwork.
B. They broaden individual outlook.
C. They require less supervision.
D. They are easier to develop than individual incentive programs.
30. Andrew showed up to every team meeting late and did not complete his part of the
project. The rest of the team had to pick up the slack to complete the project on time.
Despite his lack of contribution, Andrew received the same group incentive as everyone
else on the team. This illustrates which disadvantage of group incentives?
A. Social loafing may occur.
B. Individual output may be discounted.
C. Outstanding performers may slacken efforts.
D. Group infighting may arise.
31. Nadia always completed her work ahead of schedule. She was known as a fast and
accurate worker. When group incentives were initiated, the rest of her work team could
not keep pace with Nadia. Many members of the team told Nadia to stop making them
look bad. Eventually, Nadia matched her work pace to the rest of the team. This
illustrates which disadvantage of group incentives?
A. Social loafing may occur.
B. Individual output may be discounted.
C. Outstanding performers may slacken efforts.
D. Group infighting may arise.
Lussier, Human Resources Management 3e
SAGE Publishing, 2019
32. One advantage of a(n) ______ is that it broadens individual outlook.
A. group incentive
B. executive incentive
C. individual incentive
D. professional incentive
33. In compensation, a ______ is a lump sum payment, typically given to an individual
at the end of a time period.
A. bonus
B. merit
C. perquisites
D. variable pay
34. One risk with a ______ as an incentive is in allowing it to become a time-based
entitlement instead of a performance incentive.
A. perquisite
B. bonus
C. merit
D. wage
Lussier, Human Resources Management 3e
SAGE Publishing, 2019
35. Jacob sat down with his supervisor at the beginning of the quarter and set a goal to
reduce defects on the assembly line from 5% to 2%. If he achieves this goal by the end
of the quarter, he will receive a ______ of $4,000.
A. bonus
B. commissions
C. merit pay
D. piecework
36. A(n) ______ is a payment typically provided to a salesperson for selling an item to a
customer and is usually paid as a percentage of the price of the item that is sold.
A. bonus
B. merit
C. entitlement
D. commission
37. As a salesperson, Harold is paid based on a percentage of the value of the products
and services he sells. In other words, he is paid on a ______ basis.
A. bonus
B. base pay
C. value pay
D. commission
Lussier, Human Resources Management 3e
SAGE Publishing, 2019
38. For every $1,000 of widgets Tanner sells, he receives a ______ of 10%, or $100.
A. bonus
B. commission
C. merit pay
D. piecework
39. In order for a(n) ______ incentive program to work, it must provide a significant
incentive to the salesperson to be successful in selling and provide a disincentive to
make a harmful “quick sale.”
A. commission
B. bonus
C. merit
D. entitlement
40. A program to reward top performers with increases in their annual wage that carry
over from year to year is called ______ pay.
A. bonus
B. entitlement
C. merit
D. profit
Lussier, Human Resources Management 3e
SAGE Publishing, 2019
41. Acme Global announced that it had a $1 million pool available for pay increases this
year. Top performers will receive larger raises than others. Lindsey was a top performer
and hopes to get a 10% ______.
A. bonus
B. commissions
C. merit increase
D. piecework
42. For ______ pay to be valuable as an incentive, it typically must be more than 1% of
the employee’s pay.
A. merit
B. bonus
C. social
D. range
43. Piecework or piece-rate plans are one of the ______ forms of compensation, and
they can act as an incentive to produce at a higher level because the more workers
produce, the more they get paid.
A. hardest
B. simplest
C. most complex
D. nonused
44. Under her organization’s ______ plan, Nicole is paid for each widget she produces.
Lussier, Human Resources Management 3e
SAGE Publishing, 2019
A. bonus
B. commission
C. merit pay
D. piecework
45. Angelique is paid a flat rate of $2 per pair of pants that she sews at work. She is
being paid under a ______ system.
A. bonus rate
B. merit pay
C. differential piece-rate
D. straight piece-rate
46. Larry produced 40 pressed inner fenders out of sheet metal per hour and got paid
$24 per hour ($0.60 40). Michelle only produced 30 inner fenders per hour and got
paid $18.00 ($0.60 30). Larry and Michelle are working under a ______ system.
A. commission
B. merit pay
C. straight piece-rate
D. differential piece-rate
47. In a ______ compensation plan, each task is assigned a normal amount of work
time for completion.
A. straight piece-rate
B. standard-hour
Lussier, Human Resources Management 3e
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C. differential piece-rate
D. merit
48. Omri worked 40 hr this week but was paid for 45 hr because that’s how long the
work normally takes. Omri is paid under a ______ plan.
A. bonus
B. commission
C. merit pay
D. standard hour
49. The biggest challenge with ______ compensation plans is creating the manuals
showing the allowable time for a job.
A. standard hour
B. straight piece-rate
C. differential piece-rate
D. timed
50. ______ is probably the most powerful, simplest, least costly, and yet most
underused motivational incentive there is.
A. Praise
B. Pay
C. Bonus
D. Entitlement