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51. In Step 1 of the Giving Praise Model, the employee being praised is ______.
A. given an explanation of what they did right and why it was important
B. told exactly what was done correctly
C. given a general statement like “good job on that sale”
D. given a reason to repeat the performance
52. In Step 2 of the Giving Praise Model, the employee being praised is told ______.
A. what their reward will be
B. how the supervisor learned about the performance
C. why the praised behavior is important
D. a reason to repeat the performance
53. In Step 3 of the Giving Praise Model, the person giving the praise is silent. This
silence is intended to give the employee being praised ______.
A. time to thank the person giving the praise
B. the opportunity to point out others who shared in the praised behavior
C. the chance to “feel” the impact of the praise
D. time to think about how the employee can repeat the behavior
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54. Terry is applying the Giving Praise Model to Yael. She has told Yael exactly which
behavior is being praised, why that behavior was important, and she has given Yael the
opportunity to absorb the information. Her next step is to ______.
A. tell Yael to get back to work
B. give Yael a bonus check
C. encourage repeat performance
D. let Yael thank her for the praise
55. Carla provides service certificates to employees in her department who provide
exemplary service without being asked. This represents ______ as a nonmonetary
incentive.
A. recognition
B. standard hour plan
C. ESOP
D. piece-rate plan
56. In compensation, ______ programs provide a portion of company proceeds over a
specific period of time to the employees of the firm through a bonus payment.
A. bonus sharing
B. praise sharing
C. merit sharing
D. profit sharing
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57. At the end of each year, Acme Global’s ______ program pays a portion of company
proceeds to the employees of the company as a bonus payment.
A. profit sharing
B. gainsharing
C. employee stock ownership plan
D. stock option
58. Gainsharing is similar to ______ because in each case, the gain is shared with the
employees who helped to create the gain.
A. commission
B. profit sharing
C. merit pay
D. bonus
59. When the manufacturing department cut waste by 10%, the organization paid each
member of the department $500 (a portion of the savings) as a part of the organization’s
______ program.
A. profit sharing
B. gainsharing
C. employee stock ownership plan
D. stock option
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60. A form of compensation, a(n) ______ makes employee part owners of the
organization.
A. commission pay plan
B. employee stock ownership plan
C. merit pay plan
D. variable pay plan
61. ______ are usually offered to an individual employee to allow them to buy a certain
number of shares of stock in the company at a specified point in the future at a certain
price.
A. Variable pay
B. Gainshares
C. Social loafers
D. Stock options
62. Acme Global gave its top executives the opportunity to buy Acme Global stock in 5
years at the same price at which the stock is selling today. Acme Global is using a(n)
______ plan.
A. profit sharing
B. stock purchasing
C. employee stock ownership
D. stock option
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63. ______ plans allow qualifying employees to buy the organization’s stock essentially
any time, usually at a discount.
A. Stock purchasing
B. Stock options
C. Variable pay
D. Social loafing
64. Acme Global gave its top executives the ongoing opportunity to buy Acme Global
stock at a 5% discount. Acme Global is using a(n) ______ plan.
A. profit sharing
B. stock purchasing
C. employee stock ownership
D. stock option
65. Acme Global gives its employees stock in the company at the end of each year. The
shares go directly into the employees’ retirement accounts as part of the organization’s
______ plan.
A. profit sharing
B. stock purchasing
C. employee stock ownership
D. stock option
66. Incentives fail to be effective if they become so regular and so expected by the
recipients that they become ______.
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A. entitlements
B. bonuses
C. paychecks
D. merit pay
67. The current group of younger employees entering the workforce has been called the
______ generation because of the expectation that they are owed certain perquisites
just for becoming an employee.
A. entitlement
B. merit
C. bonus
D. loafer
68. ______ rewards are valued returns (such as incentive pay for performance) to the
individual in exchange for doing something that the organization desires of the
employee (such as work).
A. Lateral
B. Intrinsic
C. Extrinsic
D. Vertical
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69. ______ motivation means that a person does something because they like it, it is
interesting and personally satisfying, and they want to do it.
A. Merit
B. Extrinsic
C. Intrinsic
D. Commission
70. Zachary worked overtime to complete a project because he knew he would receive
a bonus when the project was done. In this case, Zachary was motivated by a(n)
______ reward.
A. intrinsic
B. extrinsic
C. entitlement
D. perquisite
71. Incentives need to be clearly separated from base pay to avoid creating the
impression that incentives are a(n) ______.
A. merit payment
B. bonus
C. commission
D. entitlement
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72. Managers should keep the time between the performance and reward as ______ as
possible.
A. long
B. variable
C. short
D. undeterminable
73. Rewarding ______ cannot be allowed if managers want the incentive program to
continue to work in the future.
A. performers
B. success
C. productivity
D. nonperformers
74. ______ provide executives who are dismissed from a merged or acquired
organization with typically large lump sum payments on dismissal.
A. Perquisites
B. Golden parachutes
C. Entitlements
D. Social Loafers
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75. In compensation, a golden parachute provides ______.
A. stock options to executives instead of a higher salary
B. executive incentives to improve long-term organizational performance
C. a company funded retirement plan for senior level executives
D. a large lump sum payment to executives who are dismissed from a merged or
acquired firm
76. ______ theory suggests that manager will act in the way that provides the most
benefit to them and not the owners of the organization, unless they are provided with
incentives to act in ways that help the owners of the organization.
A. Variable
B. Executive
C. Agency
D. Loafer
77. ______ are designed to cause executives in an organization to act to increase the
value of the company over time.
A. Stock incentives
B. Social Loafers
C. Golden Parachutes
D. Intrinsic Rewards
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78. ______ are extra financial benefits usually provided to top employees in many
businesses.
A. Golden parachutes
B. Merit payments
C. Perquisites
D. Loafers
79. When Matthew started working at Acme Global, he was given a company car and
$10,000 to decorate his new office. These incentives are called ______.
A. intrinsic rewards
B. commissions
C. entitlements
D. perquisites
80. ______ placed some significant limits on executive pay in public corporations and
added new requirements for both reporting of compensation and of shareholder
involvement with executive compensation.
A. Executive Compensation and Shareholder Involvement Act of 2010
B. The Madison Avenue Wall Street Reform and Consumer Protection Act of 2008
C. The Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010
D. The Wall Street Compensation and Shareholder Involvement Act of 2008
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True/False
1. Variable pay is compensation that depends on some measure of performance or
results in order to be awarded.
2. Structural incentives reinforce performance of a single person with a reward that is
significant to that person.
3. Group incentives provide reinforcement for actions of more than one individual within
the organization.
4. Social talkers avoid providing their maximum effort in group settings because it is
difficult to pick out individual performance.
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5. In compensation, a merit raise is a lump sum, typically given once to an individual at
the end of a time period.
6. A bonus 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 an item that is sold.
7. A program to reward top performers with increases in their annual wage that carry
over from year to year is called entitlement pay.
8. In a straight piece-rate compensation plan, each task is assigned a normal amount of
work time for completion.
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9. Entitlements pay a portion of company proceeds to the highest performing employees
of the firm through a bonus payment.
10. Entitlements provide executives who are dismissed from a merged or acquired
organization with typically large lump sum payments on dismissal.
Essay
1. Describe the major reasons why an organization would use incentive pay.
2. Describe the advantages and disadvantages of individual incentives.
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3. Describe the advantages and disadvantages of group incentives.
4. Describe three options for offering individual incentives.
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5. Describe three options for group-based incentives.
6. Describe two major reasons why incentive plans fail.
7. Describe the challenges of offering incentives to employees.
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8. Describe five of the guidelines for creating motivational incentive systems.
9. Discuss the issue of whether or not executive compensation is too high and how the
major provisions of the Dodd–Frank Act affect the issue.
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10. Discuss the question of whether or not incentives improve performance and some
options available for incentivizing employees other than knowledge workers.