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Bauer, Human Resource Management, 1e
SAGE Publishing, 2020
Chapter 12: Rewarding Performance
Test Bank
Multiple Choice
1. A reward system is made up of which three components?
A. internal equity, distribution justice, and compensation
B. relational returns, compensation, and benefits
C. compensation, benefits, and distribution justice
D. relational returns, compensations, and organizational justice
2. ______ refers to financial rewards offered in exchange for achieving certain goals
and can be an integral component of an organization’s broader reward system.
A. Traditional pay programs
B. Piecework plans
C. Pay for performance
D. Differential pay plans
3. ______ reward employees for the behaviors they actually exhibit at work and for the
results or goals they actually achieve.
A. Traditional pay programs
B. Piecework plans
C. Pay for performance
D. Differential plan
4. ______ reward employees based on the content of their job description, job title,
and/or organizational level.
A. Traditional pay programs
B. Piecework plans
C. Pay for performance
D. Differential pay plans
5. Olivia is paid based on her job description, job title, and level in the organization.
What is this an example of?
A. piecework pay
B. traditional pay
C. pay-for-performance
D. individual incentives
6. A traditional-pay program is a guarantee of ______.
A. bonuses
B. profit sharing
C. benefits
D. wage/salary
7. Which pay program applies to a doctor who is paid based on patient outcomes
versus the number of patients he sees?
A. traditional pay
B. base pay
C. bonus pay
D. pay-for-performance
8. Pay-for-performance is linked to greater ______ to perform.
A. instrumentality
B. motivation
C. valence
D. expectancy
9. Pay-for-performance motivates employees to perform with greater ______.
A. instrumentality
B. attention to detail
C. efficiency and effectiveness
D. intrinsic motivation
10. Pay-for performance attracts ______.
A. applicants who are high performing
B. applicants who value security
C. applicants sensitive to interactional justice
D. applicants insensitive to equity
11. ______ is a psychological force that propels an individual (or a group of individuals)
to enact certain behavior or to strive for a goal or result.
A. Expectancy
B. Instrumentality
C. Motivation
D. Incentive
12. In relation to motivation, direction is the ______ a person is focused on.
A. place
B. time
C. goals
D. pay
13. In relation to motivation, form is the types of ______ an individual pursues.
A. behaviors
B. pay
C. incentives
D. environments
14. In relation to motivation, the intensity with which a person focuses on goals is called
______.
A. effort
B. outcome
C. results
D. instrumentality
15. Motivation that originates outside of an individual and the work itself is known as
______ motivation
A. reinforcement
B. extrinsic
C. intrinsic
D. expectancy
16. ______ motivation compels the individual to action because the individual perceives
the action as innately rewarding, meaningful, challenging, and/or enjoyable.
Bauer, Human Resource Management, 1e
SAGE Publishing, 2020
A. Intrinsic
B. Extrinsic
C. Expectancy
D. Discrete
17. Sarah praises Angie for completing her expense report on time. Going forward,
Angie consistently submits her expense report on time. Sarah’s praise is an example of
______.
A. instrumentality
B. influential performance
C. extrinsic motivation
D. a bonus
18. Jillian received a bonus for reaching her target performance goals. The bonus is
______.
A. an extrinsic motivator
B. a nonmonetary award
C. merit pay
D. traditional pay
19. Jacqueline is known around the office for helping coworkers. Jacqueline feels good
when she helps people, even if they do not thank her or show appreciation. According
to the textbook, why does Jacqueline continue to help people?
A. She is intrinsically motivated to be helpful.
B. She enjoys challenging her coworkers to be better.
C. Her behaviors are reinforced.
D. She is extrinsically motivated to be helpful.
20. A company that sells lawn care service packages rewards its employees based on
the number of packages they sell each month. The company provides prizes such as
gift cards and event tickets for extrinsic motivation. Extrinsic motivators work best for
this scenario because the metric of interest is ______ of performance.
A. quantity
B. value
C. quality
D. condition
21. The purpose for theories of motivation is to provide a framework ______.
A. to assess how well a person produces products and services on the job
B. to assess the quantity of a person’s performance on the job
C. for designing, explaining, and understanding the effects pay-for-performance on
behavior
D. to assess the quality of a person’s performance on the job
22. Who are the three influential social scientists who researched reinforcement theory?
A. Thorndike, Pavlov, and Skinner
B. Macmillian, Steers, and Mayer
C. Bauer, Berrin, and Caughlin
D. Truxillo, Latham, and Locke
23. ______ theory provides a useful framework for understanding pay as an extrinsic
motivator, particularly when pay is used for behavior modification, as in many pay-for-
performance programs.
A. Reinforcement
B. Expectancy
C. Equity
D. Discrete
24. Reinforcement theory helps us to understand ______.
A. how to use intrinsic motivators to enhance behavior
B. how pay can be used to motivate behavior
C. why the provision of intrinsic motivators serves as a motivating force
D. the instrumentality of motivation and performance.
25. Rashid considers his sales commission as a reward for his hard work to meet his
quotas. Which theory explains Rashid’s behavior?
A. goal-setting theory
B. expectancy theory
C. pay-for-performance theory
D. reinforcement theory
26. According to ______, to elicit a desired behavior, an environmental consequence--
such as a reward or punishment--should be distributed soon after the behavior is
exhibited.
A. expectancy theory
B. traditional-pay theory
C. reinforcement theory
D. goal-setting theory
27. According to reinforcement theory, a salesperson would be motivated to meet
performance goals by a sales commission because ______.
A. if a reward is provided for a specific behavior, the behavior is likely to be repeated
B. if a punishment is provided for a specific behavior, the behavior is unlikely to be
repeated
C. if a reward is withheld for a specific behavior, the behavior unlikely to be repeated
D. if a punishment is withheld for a specific behavior, the behavior unlikely to be
repeated
28. According to reinforcement theory, a factory worker would be motivated to avoid
actions (such as wasting product) that lead to having her pay docked because ______.
A. if a reward is provided for a specific behavior, the behavior is likely to be repeated
B. if a punishment is provided for a specific behavior, the behavior is unlikely to be
repeated
C. if a reward is withheld for a specific behavior, the behavior unlikely to be repeated
D. if a punishment is withheld for a specific behavior, the behavior unlikely to be
repeated
29. According to reinforcement theory, refusing to give commissions to salespeople who
use unethical tactics would motivate salespeople to be ethical because ______.
A. if a reward is provided for a specific behavior, the behavior is likely to be repeated
B. if a punishment is provided for a specific behavior, the behavior is unlikely to be
repeated
C. if a reward is withheld for a specific behavior, the behavior unlikely to be repeated
D. if a punishment is withheld for a specific behavior, the behavior unlikely to be
repeated
30. ______ theory can be useful for understanding the cognitive processes via which
pay-for-performance programs drive the direction, form, effort, and duration of behavior.
A. Equity
B. Expectancy
C. Reinforcement
D. Perceptive
31. In expectancy theory, ______ refers to the perceived connection between
individuals’ effort and performance.
A. valence
B. expectancy
C. reinforcement
D. instrumentality
32. In expectancy theory, ______ refers to the perceived connection between
performance and rewards.
A. valence
B. expectancy
C. reinforcement
D. instrumentality
33. In expectancy theory, ______ is the extent to which individuals perceive a reward as
being attractive or important.
A. valence
B. expectancy
C. worth
D. instrumentality
34. According to expectancy theory, which three psychological concepts explain
motivation?
A. expectancy, instrumentality, and valence
B. reinforcement, instrumentality, and valence
C. punishment, expectancy, and valence
D. reward, punishment, and expectancy
35. According to expectancy theory, what is the equation for motivation?
A. Expectancy × Instrumentality × Valence
B. Reinforcement × Instrumentality × Valence
C. Instrumentality × Valence
D. Instrumentality × Expectancy
36. Wynonna meets her quality standards because she perceives high performance as
instrumental for receiving rewards. Which theory supports the concept of
instrumentality?
A. traditional-pay theory
B. expectancy theory
C. goal-setting theory
D. reinforcement theory
37. Lynne exerts more effort when she values the rewards being offered for meeting her
targeted behaviors. What is valuing the rewards offered for goal attainment called?
A. goal focus
B. expectancy
C. valence
D. instrumentality
38. Why might a person perceive low expectancy between their effort and performance?
A. when the performance management program has low instrumentality
B. when the valence of the performance management program is too high
C. when there is not a clear line of sight between effort and performance
D. when there is no valence commensurate with the amount of effort and performance
39. What is the objective of most pay-for-performance programs?
A. goal setting
B. job satisfaction
C. strategy realization
D. employee engagement
40. Which theory of motivation provides a framework to explain how and why setting
measurable objectives contributes to increase motivation and higher levels of
performance?
A. reinforcement theory
B. goal-setting theory
C. SMART theory
D. expectancy theory
41. What are the components of a SMART goal?
A. specific, maximum, aggressive, rigorous, and tested
B. sporadic, minimum, assertive, realistic, and tested
C. specific, measurable, assertive, rigorous, and time-bound
D. specific, measurable, aggressive, realistic, and time-bound
42. Why might a manager attach a reward to team performance?
A. to motivate high performers to lead
B. to encourage interdependence
C. to increase valence
D. to make team work less difficult
43. Since pay is a finite resource within organizations, a performance-contingent pay
plan signals ______.
Bauer, Human Resource Management, 1e
SAGE Publishing, 2020
A. some goals are more important than others
B. strategy is not linked to pay
C. company goals are not well defined
D. the compensation budget is limited
44. What are bonuses, spot awards, and individual incentives examples of?
A. traditional pay
B. variable pay
C. sales commissions
D. standard pay
45. Sydney received pay based on feedback she got on her performance evaluation.
What is this an example of?
A. merit pay
B. bonus
C. spot award
D. commission
46. How does merit pay work?
A. It is based on hours work at a certain performance level.
B. It distributed in a lump sum annually.
C. It is split between all the members of an employee’s team.
Bauer, Human Resource Management, 1e
SAGE Publishing, 2020
D. It is integrated into an employee’s base pay.
47. What must be true for a merit pay program to be effective?
A. It should occur quarterly.
B. It should be tied to performance evaluation.
C. It should be predicated upon team performance.
D. It should be left up to a manager’s discretion.
48. ______, a form of variable pay, are one-time payouts distributed in recognition of
performance such as the attainment of a goal.
A. Bonuses
B. Benefits
C. Perks
D. Standard hours
49. ______ are after-the-fact recognition, which are often reserved for exceptional levels
of performance on a project or for exceptionally high overall job performance.
A. Performance pay
B. Merit pay
C. Spot awards
D. Base pay
50. Spot awards vary with respect to the level of ______ applied by a company.
A. criteria
B. formality
C. attention
D. incentive
51. Which is one of the least commonly used individual pay-for-performance programs?
A. individual incentives
B. bonuses
C. merit pay
D. sales commission
52. ______ refer(s) to the distribution of pay in response to the attainment of certain
predetermined and objective levels of performance.
A. Merit pay
B. Performance pay
C. Individual incentives
D. Spot awards
53. In ______, employees are compensated based on their respective production
levels.
A. piecework plans
B. employee stock ownership plans
C. profit sharing
D. gainsharing
54. In a(n) ______ plan, employee variable pay is based on the units they produce in a
given time period, such that there is a direct correspondence between the amount of
pay distributed and the number of units produced.
A. bonus
B. employee stock ownership
C. straight piecework
D. gainsharing
55. What are the two types of piecework plans?
A. straight and differential
B. standard and commission
C. standard and nonstandard
D. straight and nonstandard
56. Huon works in a factory and is paid based the units produced in a given amount of
time. What type of pay plan is this?
A. standard hour
B. differential piecework
C. traditional pay
D. straight piecework
57. Addison works in a factory and gets paid based on the number of widgets she
produces. She gets one rate if it is below a certain number and another rate if it is above
a certain number. What type of pay plan is this?
A. standard hour
B. differential piecework
C. traditional pay
D. straight piecework
58. Breccan fixes washing machines. His pay is based on completing a specific repair
within a predetermined amount of time. What type of pay plan is this?
A. standard hour
B. differential piecework
C. sales commission
D. straight piecework
59. A person who sells real estate is paid a percentage of the contract price associated
with each sale. What kind of pay plan is this?
A. standard pay
B. standard hour
C. sales commission
D. individual incentive
60. A boat manufacturer provides a year-end bonus to the team who most frequently
reaches the highest quality metrics during each report period. What type of group pay-
for-performance plan is this?
A. team reward
B. gainsharing
C. profit sharing
D. stock options
61. Some hospitals offer a portion of cost savings to individual doctors when the
hospital is able to meet certain goals such as reducing waste without changing the
quality of care provided to patients. What type of group pay-for-performance plan is
this?
A. team reward
B. gainsharing
C. profit sharing
D. stock options
62. Employees at a local lumber company had a percentage of the company’s profits
placed in their retirement plan when the company exceeded their targets for the year.
What type of pay plan is this?
A. team reward
B. gainsharing
C. profit sharing
D. stock options
63. ______ are a type of defined-contribution retirement plan in which employees are
given company stock shares that can only be used after a vesting period.
A. Stakeholder
B. Employee stock ownership
C. Profit sharing
D. Stock option
64. What is the result when a pay-for-performance plan motivates employees to pursue
company goals?
A. profit sharing
B. sorting effects
C. incentive effects
D. gainsharing
65. That individuals tend to gravitate to jobs with reward systems that fit their
disposition, goals, and performance capabilities, and the associated processes of
attraction, selection, and attrition are referred to collectively as ______ effects.
A. sorting
B. compensation
C. target
D. incentive
66. When employees realize they are not a good fit with a company and subsequently
leave, this is called ______.
A. selection
B. attraction
C. attrition
D. dismissal
67. The primary limitation of statistical modeling to determine labor costs is that it
assumes ______.
A. turnover controls labor costs
B. high-performing employees will continue their performance
C. the past can help to predict the future
D. the selection process will naturally control overages
68. When people are rewarded for unethical behavior, the result is ______.
A. illegal
B. less motivation
C. more unethical behavior
D. team work
69. When a person applies less effort in a group pay-for-performance situation, they are
engaged in ______.
A. corporate citizenship
B. competition
C. social loafing
D. collaboration
True/False
1. As long as employees hold on to their jobs, they receive their base pay, regardless of
how they perform.
2. Motivation applies only to individuals, not groups.
3. According to reinforcement theory, intrinsic consequences drive motivation and
ultimately behavior.
4. According to expectancy theory, motivation equals expectancy times instrumentality
times valence.
5. Challenging goals increase job satisfaction and motivation.
6. Attaching financial incentives to certain performance expectations does not make a
difference in aligning employee behavior with the most critical objectives for company
success.
7. Employees who receive merit pay increases tend to show higher performance than
those who do not receive merit pay increases.
8. Since bonuses are a form of variable pay, they are added to an individual’s base pay.
9. Generally, individual incentives are based on a manager’s discretion.
10. Katarina’s pay is based on how many widgets she assembles during her shift. This
is an example of a straight piecework plan.
11. A pay plan where an employee receives pay for completing a specific task within a
designated time frame is a standard hour plan.
12. There is no limit on the sales commission Shawn earns; however, Bill is limited on
the amount of commission he can earn. In general, Shawn will be more motivated than
Bill.
13. Success-sharing plans tend to be more effective when applied to larger groups,
such as an entire organization.
14. Statistical modeling can be used to help a company plan for future labor costs
associated with pay-for-performance programs.
15. High performers, and those who see themselves as high performers, are usually
more attracted to pay-for-performance programs than low performers.
1. Contrast traditional-pay programs with pay-for-performance programs.
2. Explain what a SMART goal is and practice writing at least two examples.
3. Discuss how a company can use pay to strategically motivate employees to perform
the desired behavior.
4. Explain at least four individual pay-for-performance programs.
5. Analyze the possible unintended behavioral consequences of pay-for-performance
programs when they are not well thought out and monitored properly.
