Lussier and Hendon, Fundamentals of Human Resource Management Instructor Resource

Chapter 11: Employee Incentives and Benefits

Applying the Concept 11-1: Individual Incentive Options

Place the letter of the individual incentive on the line next to the scenario illustrating it.

a. bonus
b. commissions
c. merit pay
d. piecework
e. standard hour
f. nonmonetary awards
g. praise

1. I’m an auto mechanic at a dealership, and we have a set amount of time to complete each type
of repair work. I complete a job before a stated time so that I can go on to the next car and get
paid extra for being faster than the average guy.
E. Standard Hour. Being faster than the average is based beating a standard time.

2. I just sold that top-of-the-line BMW M3. I can’t wait to get my pay this week.
B. Commissions. Getting paid based on sales is a commission incentive.

3. I’m the top producer in the entire department, so I will get an extra raise for high performance
this year.
C. Merit Pay. The extra raise over the others is for merit.

4. The boss had me come to the front of the room at the annual meeting to get a plaque for five
years of service to the company. She listed some of my major accomplishments.
F. Non-monetary awards. A plaque is non-monetary.

5. The boss just thanked me for getting a shipment that was behind schedule out on time today.
G. Praise. Thanks without any pay is giving praise.

Applying the Concept 11-2: Group Advantages and Disadvantages

Identify each statement by its group advantage or disadvantage.

Advantages
a. Promotes better teamwork
b. Broadens individual outlook
c. Requires less supervision
d. Is easier to develop than individual incentive programs
Lussier and Hendon, Fundamentals of Human Resource Management Instructor Resource

Disadvantages
e. Social loafing can occur
f. Individual output may be discounted
g. Outstanding performers may slacken efforts
h. Group infighting may arise

6. What happened? Latoya and Katie used to get along so well. Now they are constantly
bickering.
H. Group infighting. Latoya and Katie are fighting within the group.

7. Katrina, you are not being fair to the rest of us by not doing your fair share of the work.
E. Social loafing can occur. The employee is not working up to the level of the others.

8. Now that we use a team-based process, the manager doesn’t check up on us like she used to.
C. Requires less supervision. The boss not checking is a sign of less supervision.

9. By assembling the product as a team, we actually increased production by 20%.

A. Better teamwork. They are getting more produced as a team.

10. I know I’m the best, but none of the department members work very hard, so why should I?
G. Outstanding performers may slacken efforts. The new guy knows that he can’t carry the group
all by himself.

Applying the Concept 11-3: Group Incentive Options

Place the letter of the group incentive option on the line next to the matching description.

a. profit sharing
b. gainsharing
c. ESOP
d. stock options
e. stock purchasing

11. Our group incentive option gives us a bonus at the end of the year based on how profitable
we were for the year.
A. Profit Sharing. Giving a bonus based on profits, is profit sharing.

12. Our group incentive option plan allows me to get stock and put it in my retirement account
without paying anything for it.
C. ESOP. When the company give shares of its stock to employees, it is stock ownership.

13. Our group incentive option plan worked like this. The manager told us that if we could cut
cost in our department by 5%, as a group we would get 5% of the savings to the company
distributed evenly among us.
Lussier and Hendon, Fundamentals of Human Resource Management Instructor Resource

B. Gainsharing. Setting a goal and sharing the rewards is gainsharing.

14. Our group incentive option allows me to buy company stock for 10% less than the market
value.
E. Stock Purchasing. If you buy the stock, you have purchased it.

15. Our group incentive option plan allows me to buy $50 shares of the company stock for only
$13 apiece next year.
D. Stock Options. Giving a year to buy is an option.

Applying the Concept 11-4: Statutory Benefit Laws

Place the letter of the relevant statutory benefit law on the line next to the statement below.

a. FMLA
b. ACA
c. COBRA
d. HIPAA
e. ERISA

16. I don’t trust my company’s financial future, so I like this law because it will allow me to
move my funds out of my company fund to a new account with the stockbroker of my choice.
E. ERISA. Moving money out of the company fund to another fund is Portability.

17. I like this law because it will allow me to take time off from work to take care of my sick
mother.
A. FMLA. Caring for a parent qualifies for time off.

18. I’m going quit and look for a new job, so I like this law because I need to continue to have
health insurance while I search for a new job.
C. COBRA. Continuing insurance, paid for by the former employee, is required under this law.

19. I currently have health insurance and medical problems, but when I change jobs, the new
company can’t refuse to give me insurance based on any medical problems I have when I join
the firm.
D. HIPAA. The law prohibits not giving health insurance based on prior preexisting medical
problems.

20. I’m out of school and almost 25, so I like this law that allows me to continue on my parents’
insurance plan.
B. ACA. Children can stay on their parents’ insurance until age 26.
Lussier and Hendon, Fundamentals of Human Resource Management Instructor Resource

Applying the Concept 11-5: Group Health Insurance

Place the letter of each type of health insurance option offered on the line next to the statement
describing it.

a. Traditional
b. HMO
c. PPO
d. HSA
e. MSA

21. I don’t like the new insurance plan because I can only go to doctors and hospitals that are
approved by the plan. I have to stop seeing my doctor and start with a new one that I’m assigned
to.
B. HMO. Restrictions of doctors and facilities is a disadvantage of HBOs.

22. I have expensive health problems, and my insurance plan requires me to pay 20% of my
health care costs, making it very expensive for me.
A. Traditional. The 80/20 cost split is common with the traditional plan.

23. I like my insurance plan because I’m healthy and pay the full cost, but I don’t use it all every
year and it has accumulated in case I need it someday.
D. HSA. This option requires paying in full, and allows rollovers.

24. I have the same insurance deal that you have (#8), but my company only has 25 employees.
E. MSA. They are for companies with less than 50 employees.

25. I do have copays and deductibles, but at least I can go to any doctor or hospital I want too at
an extra cost.
C. PPO. This is a mix of traditional and HBO features.

Applying the Concept 11-5: Flexible Benefit Plans

Place the letter of the type of flexible plan on the line next to statement that describes it.

a. modular
b. core-plus
c. full-choice

26. I don’t think our benefit plan is fair because I use my spouse’s health insurance plan and I
just lose the benefit. To be fair, I should be able to use the money for other benefits I want.
B. Core plus. Health insurance is part of the core, and the employee also has a plus in selecting
other benefits.
Lussier and Hendon, Fundamentals of Human Resource Management Instructor Resource

27. I sure wish we got more of our compensation in benefits, but at least with my benefit
package, I can choose any benefit I want to every year.
C. Full choice. Being able to choose anything is full choice.

28. My benefit plan has five packages, and I get to pick any one of them that I want every year.
But it’s difficult to select one.
A. Modular. A set package is a modular plan.

29. I definitely want to get health care and retirement benefits, and it’s nice to have the option of
selecting a few other benefits with a set dollar value.
B. Core plus. The health and retirement make up the core, and the plus is selecting others.

30. The hard part about my benefit plan is that there are so many options to choose from that I
have a hard time selecting the ones I may really need.
C. Full choice. Any combination of options is full choice.