83) At Dortix, a manufacturing company, at the end of every quarter, the total production of each
department is calculated and compared with the predetermined targets; the rewards for each set
of divisional employees are determined this way. Dortix uses a ________ plan to incentivize its
employees.
A) profit sharing
B) gainsharing
C) core-plus
D) modular
E) bonus
84) Which of the following variable pay programs is free from dependence on company profits?
A) profit sharing
B) job sharing
C) bonuses
D) employee stock ownership plans
E) gainsharing
85) An advantage of the ________ plan is that because benefits accrue to groups of workers,
high-performing workers pressure weaker performers to work harder, improving performance for
the group as a whole.
A) modular
B) gainsharing
C) skill-based pay
D) flexible benefits
E) profit sharing
86) Exsell is a popular consumer goods company known for hiring the best resources and using
the best technology to produce an extensive range of goods. The manufacturing units consider
productivity to be the only criterion; targets are upgraded, supervised, and rewarded amply. The
groups with the highest productivity in each manufacturing unit owned by Exsell are
incentivized using a substantial monthly monetary reward program. Of late, there have been
some rumors about the company not doing very well in the market. Many claims of defective
quality, declining market share, and employee unrest have been doing the rounds. However, the
CEO of Exsell recently held a conference with the organization and the media to share its
expansion plans for the coming year. He ended the conference with a discussion of how the
profit margin of the company had grown substantially but many employees were left in doubt.
Which of the following, if true, would indicate the need for Exsell to replace gainsharing with
profit sharing as a variable pay program for its employees?
A) The company used a merit-based pay plan for decades to reward the employees who deserved
recognition for good performance.
B) The company has opened multiple product categories and is experiencing brand dilution.
C) Executives who receive and evaluate client feedback have found a lot of quality concerns
with the products dispatched in recent times.
D) The economy is showing signs of robust growth after last year’s recession and losses.
E) The consumer goods industry has traditionally had higher barriers to entry than other
industries of similar size and reach.
87) At Esco Retail, all employees are constantly driven to work hard. The company places
maximum emphasis on stocking high quality goods and providing high quality service to retain
the edge they have in the retail industry. To promote organizational commitment further, the
company incentivizes employees by enabling them to purchase company shares at below-market
prices as a part of their benefits. This mode of providing incentives represents the use of
________.
A) flexible benefits plans
B) merit-based plans
C) modular plans
D) employee stock ownership plans
E) core-plus plans
88) Which of the following statements is true regarding an employee stock ownership plan
(ESOP)?
A) Under this plan, employees acquire company shares, often at below-market prices.
B) There exists a strong correlation between ESOPs and employee performance.
C) The financial stake in the company is adequate to use ESOPs as an effective means to
motivate employees.
D) ESOPs are effective because, like bonuses, they reward recent performance.
E) ESOPs are also called competency-based pay plans.
89) For employee stock ownership plans to be effective in improving performance, they must
________.
A) be based solely on productivity like gainsharing plans
B) be implemented such that employees psychologically experience ownership
C) be determined on the basis of performance appraisals and recent performance
D) be planned such that they are unaffected by company profitability
E) be based on the market compensation philosophy
90) The major advantage of flextime is that it can be used for all categories of jobs.
91) Internal equity refers to the worth of the job to the organization.
92) A variable-pay program bases a portion of an employee’s pay on some individual and/or
organizational measure of performance.
93) The chief concern of both individual and team piece-rate workers is financial risk.
94) When the profits of Emm Corp rose steadily over two quarters three years back, the
employees of the company were given the offer of purchasing the company’s shares at subsidized
rates. Many of the employees who bought the shares have become extremely rich after the
phenomenal growth Emm Corp has had in the following years. This is an example of a bonus.
95) List and describe different variable-pay programs.
96) Differentiate between bonuses and gainsharing plans.
97) Compare and contrast the benefits of intrinsic rewards, such as recognition, and extrinsic
rewards, such as pay, as forms of motivation.
98) Individualized rewards that allow each employee to choose the compensation package that
best satisfies his or her current needs and situation are called ________.
A) variable pay programs
B) standardized benefits packages
C) employee recognition programs
D) employee involvement programs
E) flexible benefits plans
99) Which of the following statements is true regarding flexible benefits?
A) Flexible benefits are awarded through uniform packages to cover the requirements of a
married couple with two children.
B) Flexible benefits are in accordance with the belief that employees have identical needs that
must be rewarded identically.
C) Gainsharing and profit-sharing plans are two major types of flexible benefits.
D) Flexible benefits can be altered to meet employee needs based on age, marital status, and
number and age of dependents.
E) Flexible benefits are given based on an employee’s skills, competence, and productivity.
100) ________ are predesigned packages, or modules of benefits, each of which meets the needs
of a specific group of employees.
A) Modular plans
B) Employee stock ownership plans
C) Profit-sharing plans
D) Merit-based plans
E) Flextime plans
101) Core-plus plans consist of ________.
A) predesigned packages of benefits that an employee must accept as a whole
B) monetary benefits which are linked to one’s performance appraisals
C) fractions of a company’s profit margins determined on the basis of an established formula
D) pretax dollars up to the dollar amount offered in the plan that an employee sets apart to pay
for particular benefits
E) essential benefits and a menu-like selection of other benefits that an employee can choose
from
102) Sally Peterson, who works as an entry-level editor, wants to go for dental reconstruction
surgery and sent a query to her HR department asking for a list of preferred hospitals. The HR
looked through her healthcare plan, which provides only a minimum coverage for routine drugs
and vision care. Consequently, the HR manager informed her that if she wishes to carry on with
the dental procedure, she will have to pay for it on her own. Which of the following benefits
plans should she choose to meet her needs?
A) a basic modular plan
B) a standardized benefits package
C) a core-plus plan
D) a fringe benefits plan
E) a 401k plan
103) Flexible spending plans consist of ________.
A) a core of essential benefits and a menu-like selection of others from which employees can
select
B) no base salary; the employee is paid only for what he or she produces on the basis of a fixed
sum for each unit of production completed
C) a fraction of a company’s profit margins determined on the basis of an established formula
D) pretax dollars up to the dollar amount offered in the plan that an employee sets apart to pay
for particular benefits
E) modules of benefits, each of which meets the needs of a specific group of employees
104) A flexible benefits package is designed for a male with a wife and two children at home.
105) Flexible spending plans allow employees to set aside pretax dollars up to the dollar amount
offered in the plan to pay for particular benefits, such as healthcare and dental premiums.
106) List and describe the various flexible benefits plans.
107) Which of the following is an example of an intrinsic reward?
A) bonus
B) profit-sharing plan
C) employee stock option
D) employee recognition
E) gainsharing
108) Jack Holmes is a middle-aged, lower-level employee at an automobile service center.
Though he is not paid very well, he loves his job. His supervisor speaks to him with respect, and
he is the favored candidate for mentoring new employees because of the vast experience he holds
in the job. Based on this information, which of the following is most likely to be the reason Jack
likes his job?
A) recognition
B) prospects of growth
C) salary
D) flextime
E) job sharing
109) Which of the following statements is true regarding employee recognition?
A) Employee recognition is an extrinsic reward.
B) Critics argue that employee recognition programs are highly susceptible to political
manipulation by management.
C) Employee recognition programs are expensive.
D) Centralized programs across multiple offices in different countries can hinder the process of
employee recognition programs.
E) Employee stock option is a more powerful workplace motivator than recognition.
110) On an organizational level, job design and by the extrinsic rewards of pay and benefits are
the only ways to motivate employees.
111) Recent studies indicate that employee recognition programs are associated with self-esteem,
self-efficacy, and job satisfaction and the broader outcomes from intrinsic motivation are well
documented.