Unit 5

Question 1

Piece rate

Answer 1

Pay system where employees get paid a specific amount of money for each unit produced or processed

Question 2

Straight piece rate

Answer 2

Same amount is paid for each piece produced or processed, regardless of how many are produced

Question 3

Differential piece rate

Answer 3

A lower amount per piece is paid if production does not meet the production standard, and a higher amount when the production standard is met

Question 4

Sales commissions

Answer 4

Pay based on sales/transaction volume

Question 5

Maintenance selling

Answer 5

Selling established products to existing customers

Question 6

Conversion selling

Answer 6

Selling established products to new customers

Question 7

Leverage selling

Answer 7

Selling new products to existing customers

Question 8

New market selling

Answer 8

Selling new products to new customers

Question 9

Merit pay

Answer 9

An increase to an employee’s base pay in recognition of good job performance

Question 10

Merit bonus

Answer 10

Cash payment to recognize good employee performance, but does not increase base pay

Question 11

Special purpose incentive

Answer 11

Incentive designed to motivate a specific type of employee behaviour

Question 12

Suggestion system

Answer 12

Incentive plan where employees receive cash bonuses for submitting money-saving suggestions

Question 13

Gain-sharing plan

Answer 13

Group performance pay plan that shares cost saving or productivity gains with members of the group

Question 14

Goal-sharing plan

Answer 14

Group performance pay plan where the group receives a bonus when prespecified performance goals are met

Question 15

Competitive bonus plan

Answer 15

Group pay plan that rewards work groups for outperforming other work groups

Question 16

Pooled performance pay

Answer 16

Pay plan where the group performance results are pooled and group members share equally in the performance bonus

Question 17

Group commissions

Answer 17

Performance pay where commissions are pooled and shared equally by group members

Question 18

Group piece rates

Answer 18

Performance pay where group members get paid based on number of completed products produced by the group

Question 19

Employee profit-sharing plan

Answer 19

Bonus payments based on company profitability

Question 20

Current distribution profit-sharing plan

Answer 20

Distributes profit-sharing bonus’s in the form of cash or shares, at least annually

Question 21

Deferred profit-sharing

Answer 21

Profit-sharing bonuses are allocated to employee accounts but not paid out until later, usually on termination or retirement

Question 22

Combination profit-sharing plan

Answer 22

Combination of paying some of the profit-sharing bonus on a current (cash) basis and deferring the remainder