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Chapter Quiz
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1

If a compensation system is "secure," the employees' pay is below the level needed to satisfy basic needs.
A)True
B)False
2

Variable pay helps guarantee equitable treatment of employees.
A)True
B)False
3

The differential piece rate plan uses two separate rates: one for those who meet the standard, and one for those who don't.
A)True
B)False
4

Individual incentives are possible only in situations where performance can be specified in terms of output.
A)True
B)False
5

Spot gainsharing plans distribute a fixed percentage of total organization profit to employees in the form of cash bonuses or deferred bonus amounts.
A)True
B)False
6

Employers base pay differentials on all of the following except:
A)Individual differences in experience
B)Individual differences in family size and needs
C)Individual differences in performance
D)Expectations that seniority and higher performance deserve higher pay
7

Employees can be paid for ____________________.
A)the time they work
B)the output they produce
C)their knowledge
D)All of the above.
8

In order to implement a successful variable pay system, all the following should be true except:
A)Executives and line managers must demonstrate commitment
B)The plan must be launched during an economic downturn
C)Employees must accept the plan as equitable
D)The organization's culture must be based on teamwork
9

Which of the following approaches to incentive plans is not used at the organizationwide level?
A)Suggestion systems
B)Gain sharing
C)Straight piecework
D)Profit sharing
10

The most successful gainsharing plan at a single company is the ____________________ plan.
A)Lincoln Electric
B)Scanlon
C)Rucker
D)Improshare
11

The basic compensation system at Lincoln rests on all of the following principles except:
A)There are no perquisites for managers
B)After two years of employment, the worker cannot be laid off
C)After five years of employment, no worker can be fired
D)There is no mandatory retirement
12

In the Rucker plan, the primary purpose of the screening committee is to ____________________.
A)discuss long-term economic goals
B)administer the bonus program
C)discuss production problems
D)interview and select new employees
13

____________________ of the companies with some form of profit sharing use the deferred option.
A)5 percent
B)25 percent
C)50 percent
D)80 percent
14

Which of the following is a variant of people-based pay?
A)Skill-based
B)Knowledge-based
C)Credential-based
D)All of the above.
15

A solution to the problem of pay compression is to ____________________.
A)re-examine how many entry-level people are needed
B)limit the hiring of new employees seeking excessive salaries
C)base all salaries on longevity
D)All of the above.





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