MGT 374 Questions and Answers 2024/ Verified When to use individual plans - Correct Answer -performance measurement is accurate at individual level -Supervisors are viewed as unbiased -low interdependence across individuals When to use group/ organizational plans - Correct Answer -individual performance cannot be measured well -High interdependence within teams -between team competition is desirable -You want to drive commitment to the group What is reward intensity - Correct Answer -how strong is the reward -what are the minimum and maximum rewards -what is the potential reward as a percent of base pay Research on reward intensity and implications - Correct Answer -small amounts are harly noticed -small differences between high and low performers can lower motivation and increase turnover -sorting effecting are just as large a concern as incentive effects -need to know how much money is available -need to have a system that sufficiently differetiantes between high and low performers What is allocation approach - Correct Answer -how payments will be determined within groups -equality/ equity Equality approach - Correct Answer -all group members get the same amount as a percent of base pay -consider this when cooperation is top priority, information sharing is critical, your goal is to foster team identity and relationships 1 / 2
Equity approach - Correct Answer -pay is allocated to the group based on individual contribution; requires additional level of performance measurement -consider this when you have concerns about free riding/ social loafing and there is significant variation in contribution accross the group What is payout frequency - Correct Answer when and how often will rewards be paid out -too often= potential for entitlement -not enough= lack of reinforcement due to gaps in payment -consider average size of payouts depending on payout frequence -monitor employee responses to frequence Pay communication - Correct Answer -people have a tendency to inflate the size of gaps in pay given no other information -communication is important to leveraging the benefits of PFP -oppenness of pay information is important to increasing quality of managerial pay decisions Step 1 in designing PFP - Correct Answer -Identify your goal -based on your firm and HR strategy, what are you looking for in your pay plan -what behevaiors and results do you hope to see as a result Step 2 in designing PFP - Correct Answer Consider the context -Firm and HR strategy -total rewards stratefy and other pay programs -workflow and interdependence -managerial capabilities Step 3 in designing PFP - Correct Answer -Select dimensions -use research to inform your decisions -think through both the design and logistic elements -model the costs
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