Incentive Schemes and Reward Systems

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Questions and Answers

What is the primary goal of internal benchmarking?

To establish international partnerships.

To surpass competitors in the market.

To identify and adopt best practices within the organization. (correct)

To minimize operational costs across all departments.

Which of the following exemplifies external benchmarking?

A department measuring its monthly sales against its sales target.

A team evaluating its project management processes against internal standards.

A company comparing its employee turnover rate with the industry average. (correct)

A manager assessing employee satisfaction through internal surveys.

When a company benchmarks its environmental sustainability efforts against companies in other countries with strong green initiatives, this is an example of:

Strategic Alliances

Domestic Compliance

International Benchmarking (correct)

Reverse Engineering

Which type of reward is a promotion considered to be?

An extrinsic reward. (A) Signup and view all the answers

An employee's feeling of accomplishment after completing a challenging project would be categorized as:

Intrinsic reward. (D) Signup and view all the answers

A company decides to implement a system where employees receive bonuses based on exceeding pre-defined individual sales targets. Which type of reward system is this?

Individual incentive plan (A) Signup and view all the answers

A multinational corporation aims to optimize its supply chain management. It identifies a competitor renowned for its logistical efficiency and sustainability. To what extent should the corporation implement an exact imitation of the competitor's supply chain practices for maximum benefit?

A tailored adaptation is preferable, considering the corporation's unique operational context and strategic objectives. (A) Signup and view all the answers

According to McClelland's Needs Theory, which of the following is a key driver of human behavior?

The need for power. (B) Signup and view all the answers

Which element is crucial for effective implementation of Locke’s Goal Setting Theory?

Specific and challenging goals combined with regular feedback. (A) Signup and view all the answers

An employee consistently seeks opportunities to lead projects and influence team decisions. According to McClelland’s theory, which need is most likely driving this behavior?

Need for Power (B) Signup and view all the answers

Which condition, if unmet, would most significantly undermine the effectiveness of Locke’s Goal Setting Theory, potentially leading to decreased performance and motivation?

There is a complete absence of feedback regarding progress toward the goals. (A) Signup and view all the answers

A company decides to implement both McClelland’s Needs Theory and Locke’s Goal Setting Theory. How might a manager effectively integrate these two approaches to maximize employee performance?

By aligning challenging, specific goals with opportunities that satisfy employees’ needs for achievement, power, or affiliation, and providing regular feedback. (D) Signup and view all the answers

Which of the following is a primary benefit of benchmarking?

Boosting overall performance and identifying areas for improvement (A) Signup and view all the answers

What is a key characteristic of employee share plans?

Employees are granted the right to purchase company shares at a specified price in the future. (D) Signup and view all the answers

In a gainsharing plan, what triggers the distribution of cash bonuses to employees?

When the company or a segment of it exceeds a predetermined performance target (C) Signup and view all the answers

What is a potential disadvantage of team-based incentive schemes?

It can be difficult to directly link individual effort to individual rewards (B) Signup and view all the answers

Which of the following is a common pitfall to avoid when benchmarking?

Treating the benchmarking process as a one-time event rather than an ongoing process (B) Signup and view all the answers

Why is defining clear objectives important in benchmarking?

To provide a clear focus and direction for the benchmarking effort (B) Signup and view all the answers

What risk is associated with benchmarking too many areas and KPIs (Key Performance Indicators)?

Dilution of focus and resources, leading to ineffective analysis (A) Signup and view all the answers

Why is the assumption that benchmarking results stay stable for long periods a pitfall?

Because external factors and internal capabilities change over time. (C) Signup and view all the answers

What is the most significant reason why a company should avoid always being a follower and not a first mover in its industry?

Innovation and market leadership are often achieved by those who proactively create and shape new opportunities. (D) Signup and view all the answers

Which of the following is an example of an environmental factor that influences job performance?

Sufficient resources (C) Signup and view all the answers

What is the primary emphasis of motivators (intrinsic factors) in the workplace?

Job content and outcomes (A) Signup and view all the answers

If environmental factors at a company are viewed as merely 'adequate', what is likely to happen to employee motivation?

Employee motivation will not be significantly affected (D) Signup and view all the answers

Which of the following best describes intrinsic motivation?

Stemming from an internal desire to perform a task (B) Signup and view all the answers

What is the potential impact of employee satisfaction on an organization?

Improved quality of outputs (A) Signup and view all the answers

What role does competition play in extrinsic motivation?

It encourages individuals to succeed and reap rewards. (A) Signup and view all the answers

According to the principles of effective goal setting, what characteristic might make a goal demotivating?

Tediousness (B) Signup and view all the answers

Which statement accurately connects a type of motivation with its likely impact?

A lack of clarity about tasks that offer intrinsic reward dampens motivation. (D) Signup and view all the answers

An employee describes their work as deeply fulfilling, even though it offers no opportunities for external recognition or financial bonuses. However, a new organizational policy introduces excessive micromanagement and reduces their autonomy. Based on the principles outlined, what is the most likely outcome?

The employee's intrinsic motivation will likely decrease, due to the negative impact of environmental factors, outweighing his satisfaction. (C) Signup and view all the answers

Consider an organization where employees consistently exceed performance targets, yet report high levels of burnout and dissatisfaction due to relentless pressure and a perceived lack of value placed on their well-being. Which of the following strategies would MOST likely result in a sustainable improvement in both performance and employee morale?

Investing in resources that foster growth that align with company goals, while simultaneously improving environmental factors. (A) Signup and view all the answers

According to Vroom's Expectancy Theory, what three factors determine motivation?

Expectancy, instrumentality, valence (D) Signup and view all the answers

In the context of Vroom's Expectancy Theory, what does 'instrumentality' specifically refer to?

The individual's belief that achieving a certain performance level will lead to a specific reward (D) Signup and view all the answers

According to the content, which of the following is a crucial element in fostering motivation?

Creating an environment where employees believe their efforts will lead to desired outcomes (D) Signup and view all the answers

Which of the following scenarios best illustrates a high level of 'valence' in Vroom's Expectancy Theory?

An employee highly values a promotion and is willing to work hard to achieve it. (B) Signup and view all the answers

If an employee possesses the necessary skills and knowledge for a task but lacks motivation, what component of job performance, as defined in the content, is deficient?

Motivation (D) Signup and view all the answers

According to the provided text, what is the primary role of Herzberg's Hygiene factors?

To create a necessary environment for motivation, though they don't motivate directly. (B) Signup and view all the answers

An organization implements a new performance-based bonus system. However, employees perceive that the criteria for receiving the bonus are unclear and unfairly applied. According to Vroom's Expectancy Theory, which factor is most likely to be negatively affected?

Instrumentality (C) Signup and view all the answers

An employee highly doubts their capability to meet the set performance goals despite the potential for a significant bonus upon achievement. According to Expectancy Theory, which component is lacking?

Expectancy (D) Signup and view all the answers

A company decides to reward employees who consistently exceed expectations with additional responsibilities, but without any corresponding increase in compensation or other tangible benefits. How might this affect 'valence' and, consequently, overall motivation, according to Vroom's Expectancy Theory?

It could decrease valence if employees do not perceive added responsibilities as a valuable reward. (A) Signup and view all the answers

In a complex organizational restructure, employees are unsure how their individual contributions directly translate into overall company success, causing a general apathy and slowdown. Moreover, they do not see management rewarding high performers any differently from average performers. Analyze this situation in terms of Expectancy Theory: Which of the core components (Expectancy, Instrumentality, and Valence) are likely suffering, and what would be the most effective initial step to address the demotivation?

Expectancy, Instrumentality, and Valence are all suffering; begin by clarifying the link between individual contributions and company success, and transparently reward high performers. (C) Signup and view all the answers

Flashcards

Internal Benchmarking

Comparing different departments within your organization to identify best practices.

External Benchmarking

Looking outside your organization for comparisons with competitors or industry leaders.