1 .
Income over and above base salary is provided to individual employees who meet specific individual performance standards as a(n): [Hint]
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| profit-sharing plan.
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| variable pay plan.
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| individual incentive plan.
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| group incentive plan.
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2 .
All employees are provided a share of the company's profits in a specified period with a(n): [Hint]
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| profit-sharing plan.
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| variable pay plan.
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| individual incentive plan.
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| group incentive plan.
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3 .
Group incentive plans that tie pay to a measure of overall profitability is a(n): [Hint]
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| profit-sharing plan.
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| variable pay plan.
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| team incentive plan.
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| gainsharing plan.
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4 .
Paying workers for units of production is: [Hint]
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| piecework.
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| standard hour plan.
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| individual incentive.
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| variable pay.
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5 .
Disadvantages of piecework plans include all the following except: [Hint]
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| Workers may resist changing production standards.
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| Employees concentrate on output.
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| Employees concentrate less on quality.
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| Rewards are proportional to performance.
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6 .
Workers are less likely to link production standards to pay with the standard hour plan if the incentive: [Hint]
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| uses hourly wage rates.
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| is expressed in percentages.
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| is based on team performance.
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| shares productivity gains.
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7 .
Issues to consider when awarding short-term incentives may not include: [Hint]
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| Eligibility.
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| Fund size.
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| Individual awards.
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| Mega-option grants.
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8 .
Team-based incentive plans may demotivate hard workers because their pay may not: [Hint]
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| be proportional to efforts.
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| support problem solving.
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| encourage training.
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| tie rewards to goals.
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9 .
Using a straight percentage of a company's net income to decide how much bonus money to make available is a(n): [Hint]
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| annual bonus plan.
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| short-term incentive.
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| nondeductible formula.
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| short-term incentive fund.
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10 .
Long-term incentives are designed to encourage executives to: [Hint]
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| change attitudes toward long-term incentives.
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| stay with the company.
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| emphasize stock options.
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| purchase a specific number of shares of stock.
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11 .
A(n) _________________ gives an executive the right to purchase a company stock at a specific price at a specific time. [Hint]
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| Mega-option grant.
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| Annual bonus.
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| Stock option.
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| Cash incentive.
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12 .
Restricted stock plans provide stock to an executive: [Hint]
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| at today's stock price.
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| at no cost.
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| at retirement.
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| for achievement of financial targets.
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13 .
Executives receive units representing stock shares under _________ plans. [Hint]
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| Stock appreciation rights.
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| Performance achievement.
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| Nonqualified stock option.
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| Phantom stock.
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14 .
Top managers' incentives are increasingly being tied to: [Hint]
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| supply chain deficiencies.
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| economic value.
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| restricted stock plans.
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| stock appreciation rights.
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15 .
Paying a straight salary to salespeople may not be desirable because: [Hint]
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| it is simple to switch territories.
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| fixed sales costs are low.
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| it pays only for results.
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| pay isn't proportional to results.
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16 .
Commissions tend to shift a salesperson's emphasis to: [Hint]
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| switching territories.
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| cultivating long-term customers.
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| making the sale.
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| constricting sales.
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17 .
Turnover among salespersons is highest when paying by: [Hint]
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| straight salary.
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| combination plans.
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| commission.
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| base pay plus commission.
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18 .
A disadvantage of combination plans is that they: [Hint]
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| give a floor to earnings.
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| provide incentive for good performance.
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| don't tie salary to performance.
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| allow specification of what salary is for.
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19 .
A salary increase that is based on a person's individual performance is termed: [Hint]
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| long term incentive.
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| merit pay.
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| bonus.
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| mega-option grant.
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20 .
Merit pay may be a demotivator because of supervisors' tendencies to: [Hint]
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| minimize differences in employee performance.
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| base raises on individual performance.
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| motivate improved performance.
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| focus on organizational goals.
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21 .
Lump sum merit payments may be attractive because they are: [Hint]
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| based on company profits.
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| cumulative increases.
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| proportional to benefits.
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| good motivators.
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22 .
Not giving lump sum merit payments to poorly performing employees forces employees to focus on: [Hint]
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| organizational goals.
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| cash flow.
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| tying benefits to base pay.
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| reducing motivation.
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23 .
Employees receive a share of the company's annual profits by means of: [Hint]
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| lump sum payments.
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| merit pay.
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| employee stock option plan.
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| profit sharing plans.
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24 .
Firms contribute shares of stock or cash to a trust that purchases stock for employees as part of: [Hint]
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| deferred profit sharing plans.
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| ESOP.
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| cash plans.
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| Lincoln incentive system.
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25 .
ESOPs encourage employees to develop a sense of ownership in the firm due to all the following except: [Hint]
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| Provide opportunities for increased financial incentives.
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| Create a sense of ownership.
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| Go directly to the employees individually rather than into a retirement trust.
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| Develop commitment to the firm.
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26 .
Cost-saving gains are shared among employees and the company as a result of: [Hint]
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| philosophy of cooperation.
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| Scanlon's identity feature.
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| gainsharing plans.
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| employee stock ownership plan.
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27 .
An employee's weekly pay is subject to the firm's meeting its financial goals under the: [Hint]
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| ESOP.
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| gainsharing plans.
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| family of measures.
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| at-risk pay plans.
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28 .
Under the Fair Labor Standards Act, employers must include incentive payments in: [Hint]
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| overtime pay calculations.
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| previous week's wages.
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| discretionary bonuses.
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| gift bonuses.
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29 .
Work standards are set for each team member and each member's output is counted when using: [Hint]
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| a standard hour plan.
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| straight piecework.
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| group incentive plan.
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| production standards.
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30 .
Providing appropriate incentives for professional employees is challenging because they are: [Hint]
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| applying learned knowledge.
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| producing high-caliber work.
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| recognized by colleagues.
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| already driven.
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Which of the following is a disadvantage of a straight salary?
Disadvantages of Straight Salary Method
It does not provide any incentive for hard work. So, it does not encourage salesmen to do hard work.
What is the primary disadvantage of using the straight salary approach to pay salespeople?
The primary disadvantage with straight salary is that it removes the incentive to work longer hours or to put in extra effort to close sales that would come naturally to a commissioned sales rep.
What is the main disadvantage to salary plans for salespeople?
A major limitation of straight salary compensation plans is that financial rewards are not directly tied to any specific aspect of job performance.
What are the disadvantages of straight commission?
Disadvantages of Straight Commission Plans. Unpredictable Expenses for the Company. Obviously, a commission-paying company would willingly bear high commission charges in exchange for good sales and profitability. ... . Fluctuations in Employees' Income. ... . Overly Aggressive Sales. ... . It Takes Time to Build Clientele. ... . Toxic Independence.. | 
