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Variable Pay: Questions With Solutions (Rated A+) $9.99   Add to cart

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Variable Pay: Questions With Solutions (Rated A+)

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Variable Pay: Questions With Solutions (Rated A+)

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  • November 5, 2024
  • 6
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers
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LeCrae
Variable Pay: Questions With Solutions (Rated A+)

Variable pay Right Ans - Compensation that is tied to performance

Levels of variable pay Right Ans - -Individual
-Group
-Organizational

Who is variable pay beneficial to? Right Ans - Both employers and
employees

Beneficial for employers: Right Ans - -More output per employee
-Lower fixed costs
-Some risk shifted to employee

Beneficial for employees Right Ans - -More pay (if perform well)
-Increased satisfaction and perception of equity

Are rewards/incentives for performance broader than money? Right Ans -
Yes

What do workers think of Variable Pay? Right Ans - Workers endorse pay-
for-performance concept

Are workers often satisfied or dissatisfied with variable pay in their own
organization? Right Ans - Dissatisfied
-Design flaws
-Breakdown in implementation
-Inequity perceptions

Problems with Variable Pay Plans Right Ans - -Complexity
-Does not fit Organizational Culture
-Does not Reward the right actions/behaviors

Complexity of variable pay programs Right Ans - Too complex/confusing to
understand, leading to:
-Gaming the plan
-Giving up, ignoring plan

, How do orgs combat complexity? Right Ans - -Make plan understandable
and communicate often
-Use realistic performance measures
-Keep plan current and tied to org. objectives
-Link performance to payouts that actually recognize performance differences
among employees
-Identify variable pay separately from base pay on paychecks

Does not Reward the right actions/behaviors Right Ans - Line of sight
-Employee must understand/see how their actions impact performance
measure (ex: product quality vs. org-wide profits)
Folly of rewarding A and hoping for B

Folly of rewarding A and hoping for B Example Right Ans - -Bonuses tied to
reporter posting to Oregonlive.com
-Expected to post a minimum of 3x/day
-What is being rewarded (incentivized) here? QUANTITY NOT QUALITY

Individual level profit sharing is best used when: Right Ans -
Output/results can be directly linked to specific employee

Examples of plan design at individual level Right Ans - -Piece-rate systems
-Bonuses
-Non monetary incentives
-Commissions

Work unit/team level profit sharing is best used when: Right Ans -
Interdependence and collaboration are critical to achieve results

Examples of plan design at work unit/team level Right Ans - -Group/team
results
-Gainsharing/goalsharing
-Quality improvement
-Cost reduction

Organizational level profit sharing is best used when: Right Ans -
Employees have solid line of sight to enterprise-level outcomes

Examples of plan design at organizational level Right Ans - -Profit sharing

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