Week 5 - Reward Management (chapter 8) Flashcards
- Which of the following is NOT a key goal of a compensation system?
A. Attract high-quality job applicants
B. Motivate employees to be high performers
C. Retain employees over the long term
D. Increase operational efficiency
C
- Base pay is particularly effective for which of the following purposes?
A. Motivating high performance
B. Retaining employees
C. Increasing team collaboration
D. Encouraging long-term loyalty
Cuppa Coffee wants to ensure that their base pay is aligned with long-term employee retention. Which of the following is the primary purpose of base pay?
A. Attracting new employees
B. Motivating employees for short-term goals
C. Retaining employees over the long term
D. Encouraging teamwork
B
- Short-term incentives are best suited for:
A. Attracting new employees
B. Motivating performance
C. Retaining employees for long periods
D. Reducing organisational turnover
Cuppa Coffee introduced short-term incentives to motivate its store managers to increase monthly sales. What is the primary purpose of short-term incentives?
A. Attracting high-level talent
B. Motivating employee performance in the short term
C. Retaining employees for many years
D. Improving long-term employee engagement
B
- Long-term incentives, such as stock options, are primarily designed to:
A. Motivate employees to achieve short-term goals
B. Attract top talent
C. Retain employees over multiple years
D. Decrease wage inequality within the organisation
A
- Which of the following is a drawback of merit pay systems?
A. Merit pay increases tend to be too high
B. Merit pay effectively differentiates high and low performers
C. Merit pay often fails to meaningfully motivate employees
D. Merit pay is more effective than bonuses for short-term motivation
C
- Which of the following describes the process of job evaluation?
A. Setting wages based on external market comparisons
B. Comparing dissimilar jobs within the organisation to determine relative worth
C. Setting wages for entry-level positions based on regional averages
D. Promoting employees based on years of service
At Cuppa Coffee, management is concerned about internal pay equity between administrative and managerial staff. Which of the following processes is designed to evaluate jobs based on their relative worth within the organisation?
A. Job evaluation
B. External wage-setting
C. Benchmarking
D. Market comparisons
B
- What is the main purpose of gainsharing in group bonus systems?
A. To focus on financial performance of the entire organisation
B. To share profits with employees when productivity improves
C. To replace merit pay systems
D. To reduce the base pay of employees in exchange for more bonuses
B
- Which of the following is a key component of the point-factor method in job evaluation?
A. Aligning wages with market leaders
B. Using compensable factors such as education and experience to assign points to jobs
C. Evaluating employees based on their annual performance
D. Setting equal pay for jobs regardless of their rank
B
- One potential downside of poorly designed bonus systems is:
A. Employees become too focused on intrinsic rewards
B. Employees may attempt to game the system to maximise bonuses
C. Employees fail to meet bonus thresholds regularly
D. Employees become less productive due to increased base pay
B
- What is the primary benefit of discretionary bonuses compared to non-discretionary bonuses?
A. They provide more frequent rewards
B. They are not promised in advance, reducing the chance of system manipulation
C. They guarantee higher payouts
D. They are easier to calculate based on employee performance
Cuppa Coffee implemented a discretionary bonus program to reward employees who demonstrate exceptional customer service. What is the primary benefit of using discretionary bonuses?
A. They are awarded unexpectedly, reducing the likelihood of system gaming
B. They provide consistent rewards for meeting specific performance criteria
C. They guarantee higher pay regardless of company profits
D. They are easier to manage than performance bonuses
B
- Profit-sharing plans differ from gainsharing in that profit-sharing plans:
A. Focus on improving productivity and reducing waste
B. Distribute payouts based on organisational profits
C. Emphasise employee participation in daily operations
D. Reward employees based solely on their individual performance
Cuppa Coffee is considering introducing a profit-sharing plan to incentivize employees to focus on the company’s overall financial success. How does a profit-sharing plan primarily differ from gainsharing?
A. Profit-sharing distributes payouts based on overall company profits, while gainsharing focuses on productivity and cost reduction
B. Gainsharing focuses on individual employee performance, while profit-sharing focuses on team-based results
C. Profit-sharing is limited to managers, while gainsharing is for all employees
D. Gainsharing is more focused on long-term retention than profit-sharing
B
- Which of the following best describes stock options as a reward?
A. A short-term incentive based on annual performance
B. An opportunity to purchase company shares at a fixed price in the future
C. A base pay increase tied to organisational profitability
D. A guaranteed bonus for employees who meet their individual goals
B
- What is a key advantage of offering flexible benefits to employees?
A. Benefits become cheaper for the organisation
B. Employees can customise their benefits to suit their personal needs
C. It allows employers to cut costs on mandatory benefits
D. Employees can receive bonuses in the form of benefits
B
- Which of the following is NOT a characteristic of a well-designed incentive system?
A. It is perceived as fair by employees
B. It focuses primarily on short-term financial gains
C. It aligns with the organisation’s strategic goals
D. It maintains a clear link between performance and rewards
B
- Why is pay transparency increasingly seen as a positive practice in organisations?
A. It ensures that all employees receive the same pay
B. It builds trust in management and increases employee engagement
C. It reduces the overall cost of compensation
D. It eliminates the need for performance-based rewards
B
