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E. L. Thorndike's Law of Effect states that _____. A. a response followed by a reward is more likely to recur in the future B. behavior is a function of ability and knowledge C. valence of pay outcomes should vary under different pay systems D. monetary incentives increase intrinsic motivation E. principals have perfect information on the degree to which an agent is pursuing goals a Which of the following theories suggests that high employee performance not followed by a monetary reward will make future high performance less likely? A. Herzberg's Two-factor theory b _____ focuses on the link between rewards and behaviors and emphasizes anticipated rewards. A. Equity Theory c _____ can be described as a function of ability and motivation. A. Attitudes b According to expectancy theory, motivation is hypothesized to be a function of _____. A. Cognitive capacity d According to the expectancy theory, compensation systems differ according to their impact on the components of motivation; the main influence of compensation is on _____. A. expectancy b Which of the following components is a perceived link between behavior and pay? A. Expectancy b _____ perception is the perceived link between effort and performance. A. Reinforcement c Expectancy theory implies that linking an increased amount of rewards to performance will increase motivation and performance. Followers of cognitive evaluation theory are likely to question this assumption, arguing that: A. B. C. D.
E. c Which of the following is most likely to provide intrinsic motivation? A. A sponsored vacation to Europe e Which of the following is most likely to provide extrinsic motivation to employees? A. Autonomy d Separating the functions of principals and agents is likely to result in: A. immobility of financial capital. b According to the agency theory, the principals are the _____. A. managers c Agency costs are likely to arise when _____. A. B.
C. D. E. a Which of the following is true of how agents may differ from principals? A. B. C. D. E. d Which of the following is true of how managers may differ from shareholders? A. B. C. D. E. c Which of the following must a principal do to reduce agency costs? A. B. C. D. E. e Which of the following is an example of a behavior-oriented contract? A. Stock
option d Which of the following is true about outcome-oriented contracts? A. B. C. D.
E. e Which of the following statements about outcome-oriented or behavior-oriented contracts is true? A. B. C. D. E. b Agents prefer a behavior-based contract when _____. A. they are inclined to take more risks d As jobs become less programmable: A. B. C. D. E. c Which of the following makes outcome-oriented contracts less likely to occur? A. Risk aversion among agents a Agency theory is of particular value in compensation management because of its emphasis on the _____ trade-off. A.
performance-reward b ______ refer to decisions about whether to join or remain with an organization. A. Membership behaviors a Which of the following is likely to occur when pay for performance with stronger incentive intensity is replaced with one having a weaker incentive pay? A. B. C. D. E. e In incentive pay, performance measures are primarily based on _____. A. supervisor's appraisal b In skill-based pay systems, performance measures are primarily based on _____. A. supervisor's appraisal e Which of the following is a compensation program that would best support an organizational culture of cooperation and problem solving? A. Fixed pay c Which type of compensation program is most likely to attract learning-oriented employees? A. Skill-based pay a Overtime pays better performers more in _____ programs. A. merit
pay a Culture based on _____ is most likely to prevail in companies that use a profit-sharing compensation program. A. individual competition b
A(n) _____ is suitable for an organization with a culture that promotes individual competition. A. gainsharing plan c Which of the following compensation programs uses a management style that gives importance to control? A. Gainsharing plan b Which of the following is a compensation program that relates costs to the ability to pay? A. Skill-based program e Which of the following pay programs has the highest frequency of payout? A. Merit pay d Which of the following is a design feature according to which employee contribution programs differ? A. Employees' skills c In _____ programs, annual compensation increases are usually linked to performance appraisal ratings. A. skill-based pay c According to a merit increase grid, one of the factors that determines the size and frequency of pay increases is the _____. A. company's annual output e In merit pay programs, an individual's compa-ratio represents his or her _____. A. ability to multitask c In a merit increase grid, the _____ determines the size and frequency of pay increases. A. time spent in the current pay grade d Allan works as a typesetter in a publishing company. If the organization uses merit pay programs, Allan's salary would be based primarily on information collected from _____. A. his colleagues c Which of the following is a criticism of traditional merit pay programs? A. B. C. D. E. e Employees assess fairness along the distributive dimension when their assessment is based on _____. A. organizational procedures c In the _____ dimension, employees base their fairness assessments on the processes that were used to decide the amount of compensation. A. distributive b Which of the following is true of individual incentives? A. B. C. D. E. e In a(n) _____ plan, performance is usually measured as physical output and the payment is not rolled into the base pay. A. skill-based c Which of the following is a drawback of using profit sharing? A. B. C. D. E. e From a(n) _____ standpoint, the effect on performance motivation may be limited in ownership program because of the less obvious link between pay and performance. A. agency theory d Which of the following is a difference between profit-sharing plans and employee ownership plans? A. B. C. D. E. d A(n) _____ plan gives employees the opportunity to buy the company's shares at a previously fixed price. A. mutual fund e Which of the following is an example of an ownership plan used in compensation systems? A.
Gainsharing plans d By law, what percent of assets must an employee stock ownership plan (ESOP) invest in its company's stock? A. 26 percent b Which of the following makes employee stock ownership plans (ESOPs) less attractive? A. B. C. D. E. a A(n) _____ program is based on group or plant performance that does not become part of the employee's base salary. A. merit pay d Gainsharing plans differ from profit-sharing plans in that: A. B. C. D.
E. b The Scanlon plan is an example of a(n) _____ plan. A. profit sharing e Gainsharing can motivate employees as much as individual plans do because: A. B. C. D. E. a
Group incentives tend to measure performance in terms of _____. A. employee retention d Which of the following is a tool that allows companies to track financial results while simultaneously monitoring progress in building the capabilities and acquiring the intangible assets they would need for future growth? A. HR scorecard c The _____ requires companies to report compensation levels for the five highest paid executives and the company's performance relative to that of competitors over a five-year period. A. Bureau of Economic Analysis d Which of the following is true of how the agency theory views monitoring? A. B. C. D.
E. d When an organization is using growth strategy, it will _____. A. have pay levels that are below market levels in the short run a When an organization is using concentration strategy, it will _____. A. have short-run pay levels below the market c Which of the following pay strategy dimensions best fits with a business strategy of concentration? A. Long-term time orientation d |