Chapter 10 & 11 - Incentives / Benefits

Question 1

What is variable pay

Answer 1

tying pay to some measure of individual, group, or organizational performance

Question 2

Incentive plans establish ____

Answer 2

incentive plans establish a performance “threshold” to qualify for incentive payments

Question 3

What are the requirements for a successful incentive plan (6)

Answer 3

• identify important organizational metrics that encourage employee behaviour
• involve employees
• incentive programs should seem fair to employees
• find the right incentive payout
• payout formulas should be simple and understandable
• establish a clear link between performance and payout

Question 4

[Administering Incentive Plans]

Incentive systems are effective only when managers are willing to granted incentives based on…

Answer 4

Incentive systems are effective only when managers are willing to granted incentives based on…

…differences in individual, team, or organizational performance

Question 5

[Administering Incentive Plans]

Annual salary budgets must be…

Answer 5

Annual salary budgets must be…

…large enough to reward and reinforce exceptional performance

Question 6

[Administering Incentive Plans]

Overhead costs associated with plan implementation must be….

Answer 6

Overhead costs associated with plan implementation must be…

…determined and controllable

Question 7

Examples of Incentive Plans
Individual:
Group:
Enterprise:

Answer 7

Individual:

• piecework
• standard hour
• bonuses
• merit pay
• lump sum merit pay
• incentive awards and recognition
• sales incentives

Group:

• team compensation
• gainsharing

Enterprise:

• profit-sharing
• employee stock options
• employee stock ownership

Question 8

5 elements of a successful benefits plan

Answer 8

Benefits Strategy

Allowing for Employee Involvement

Flexible Benefits for a Diverse Workforce

Administering Benefits

Communicating Employee Benefits Information

Question 9

What are the 4 employee benefits required by law

Answer 9

• Canada and Quebec Pension Plans (CPP/QPP)
• Employment Insurance (EI)
• Workers’ Compensation Insurance
• Provincial Hospital and Medical Services

Question 10

Five kinds of discretionary benefits

Answer 10

1. health care
2. pension plans
3. retirement programs
4. life insurance
5. payment for time not worked

Question 11

Types of Pension Plans

Answer 11

What you Put In:
Contributory Plan
or
Noncontributory Plan

What you Get Out:
Defined-benefit plan
or
Defined-contribution plan