Question: like merit pay, performance bonuses for individual performance are rolled into an employee’s base pay.

Answer: False, performance bonuses for individual performance is not rolled into base pay.

Question: An incentive plan in which employees receive a bonus if the ratio of labor costs to the sales value of production is below a set standard is called a profit sharing plan.

Answer: False, this is a gainsharing program called the Scanlon Plan.

Question: Which of the following types of incentive plans are specifically designed to promote group/team performance?

Answer: Gainsharing

Question: Stock options have their greatest motivational potential during periods of:

Answer: high economic growth

Question: The balanced scorecard approach is useful in designing executive pay because rewarding achievement of a variety of goals in a balanced scorecard reduces the temptation to win bonuses by manipulating financial data.

Answer: TRUE

Question: When designing incentives, managers should make sure that:

Answer: employees think that the pay plan is fair.

Question: Piecework rates are most suited for routine, standardized jobs with output that is easy to measure.

Answer: TRUE

Question: Incentive pay

Answer: is a collective term used to refer to various forms of pay linked to an employee’s performance as an individual, group member, or organization member.

Question: Piecework rate

Answer: types of incentive pay refers to a wage based on the amount workers produce

Question: Piecework rate is most suited for

Answer: routine jobs