Chapter 11

Question 1

Gain sharing plans (4)

Answer 1

1. Scanlon plan
2. Rucker plan
3. Improshare
4. Family or measure plan

Question 2

Scanlon plan

Answer 2

• Joseph Scanlon, after the Great Depression
  A gain-sharing plan that creates mechanisms for employee participation in developing productivity improvements (labour costs and a % of sales value) and shares the financial benefits of those improvements with the employee group that generated them

Question 3

Rucker plan

Answer 3

• Alan Rucker, 1930
  Gain-sharing plan similar to the Scanlon plan but that expresses labour costs as a percentage of value added (sales value of production less purchased input)

Question 4

Improshare

Answer 4

• Mitchell Fein, 1970
  Gain-sharing plan that focuses on labour hours per unit of output (not dollar value of production cost’, and that does not usually include worker participation

Question 5

Family of measures plan

Answer 5

A gain sharing plan that uses a variety of of measures to determine the extent to which a bonus payout is justified

Question 6

Issues in designing gain-sharing plans (8)

Answer 6

1. Defining the group or work to be included in the plan
2. Establishing the bonus formula
3. Defining the baseline against which to measure improvement
4. Deciding on the share between the company and the employees
5. Deciding the split among employees
6. Deciding on the frequency of payout
7. Developing procedures for communicating results
8. Deciding whether or and how to incorporate employee participation

Question 7

Goal sharing plans (3)

Answer 7

1. Single-goal
2. Financially funded
3. Multi-goal

Question 8

Issues in Goal-sharing plans (5)

Answer 8

1. Define the group that goal sharing plan applies
2. Decide in the nature of the goals to be sought
3. Determine levels and time frames for goal achievement
4. Establish the bonus amounts
5. Decide on the split of the bonus across employees

Question 9

Profit-Sharing plans

Answer 9

1. Current distribution
2. Deferred profit sharing
3. Combination

Question 10

Issues in designing profit-sharing plans (5)

Answer 10

1. The formula for bonus determination (fixed or discretionary)
2. Employee eligibility
3. The basis for allocating the profit-sharing bonus across employees
4. Payout frequency
5. Communicating financial results and profit sharing

Question 11

Employee stock plans (3)

Answer 11

1. Stock bonus
2. Stock option
3. Stock purchase

Question 12

Employee stock plans - phantom stock plan

Answer 12

A plan through which employees participate in the appreciation of company shares and any associated dividends, without ever owning any company stock

Question 13

Employee stock plans: Share appreciation rights

Answer 13

A plan through which employees are awarded shares in their employer at no cost to the,selves if the price of employer shares rises during a specified period

Question 14

Employee stock plans: phantom equity plan

Answer 14

A plan that helps retain key employees by providing rewards based on the stock performance of a portfolio of promising new high-tech firms

Question 15

No monetary rewards plan (5)

Answer 15

1. Social reinforcers
2. Merchandise awards
3. Travel awards
4. Symbolic awards
5. Earned time off