NOE Chapter 13

Question 1

Piecework rates

Answer 1

A wage based on the amount workers produce

Question 2

Straight piecework plan

Answer 2

Incentive pay on which the employee pays the same rate per piece, no matter how much the worker produce
Ex. $8/hr, 10 pieces/hour, so $0.80/piece.

Question 3

Differential piecework plan

Answer 3

Incentive pay in which the piece rate is higher when a greater amount is produced.
Ex. $1/piece if you make 12 or more; $0.80/piece if or under 12.

Question 4

Standard hour plans

Answer 4

An incentive that pays worker extra for work done is less than a present “standard time”
Ex. Standard time is 2 hours, you did it in 1.5 hours, so you get paid for 2 hours,

Question 5

Merit pay

Answer 5

A system of linking pay to ratings on performance appraisals

• use merit increase grid(based on individual performance and ratio)
• give the biggest pay raise to the best performers and to people who get pay relatively low for their job

Question 6

Performance bonus

Answer 6

Not included in the base pay

Can be given what he employee reaches a goal or target

Question 7

Retention bonus

Answer 7

One time incentives paid in exchange for remaining with the company

Question 8

Gainsharing

Answer 8

Group incentive program that measures improvements in productivity and effectiveness and distributes a portion of each gain to employees.
Ex. Factory ah e a gain of $30,000, since everyone is doing a good job, they will keep $15,000 and distribute the rest,

Question 9

Scanlon Plan

Answer 9

Joseph N. Scanlon on 1930s
Employees receive a mounds if the ratio of labor costs to the sales values of production is below a set standard.
Ex. Target ratio=Labor cost/sales value of production
Goal is $240,000, sales value of production is $120,000
Actual is $210,000, then gain=$30,000

Question 10

Group bonuses and team rewards

Answer 10

Works best with smaller work groups

Question 11

Pay for organization performance

Answer 11

Most effective in organizations that emphasize growth and innovation

Question 12

Profit sharing

Answer 12

Incentive pay in which payments are a % of the organization’s profit and do not become part of the employee’s base salary.
Ex. GM profit sharing with workers in the union at at least 6% of profit, it get divided among the workers based on the hours they’ve worked.

Question 13

Stock ownership

Answer 13

Make the employees feel like they are a part of owners of the company .

Question 14

Stock options

Answer 14

Right to buy a certain # of shares of stock at a specified price.
Ex. Stock=$10/share, if they buy, they can see, it and keep the profit; and if it drops, they can also sell it, but they will lose money.

Question 15

ESOP

Answer 15

Employee stock ownership plan.

An arrangement in which the organization distributes shares of stock to all its employees by placing it in a trust

Question 16

Balances scorecard

Answer 16

A combination of performance measure directed toward the company’s long and short term goals and used as the basis for awarding incentive pay.

Question 17

Processes that make incentives work

Answer 17

1. ) participation in decisions

2. ) communication

Question 18

Incentive pay for executives

Answer 18

Short-term-bonuses based on the year’s profit, return on investment and etc.
long-term- stock options, and stock purchase plans

Question 19

Incentive pay

Answer 19

Forms of pay linked to an employee’s performance as an individual, group member, or organization member

Question 20

Definition of compensation?

Answer 20

The reward, USA,my monetary in nature that reinforce behavior, organizational membership, performance and retention.

Question 21

What are two key elements when used as bonuses?

Answer 21

Funding(fund bonus pools)

Distribution(bonus pools distributed according to plan and etc)