Financial Motivators Quiz 2

Why do businesses offer fringe benefits? (Select all that apply)

• To attract and retain talented employees  

• To reduce their overall payroll costs

• To give higher status to management  

• To replace employee salaries

Performance-related pay bonuses can be awarded based on:

• a) Individual performance only

• b) Team performance only

• c) Both individual and team performance

• d) Department performance only

What is a potential benefit of performance-related pay?

• a) It reduces the workload for managers.

• c) It motivates employees to achieve specific goals.

• b) It guarantees a raise for all employees.

• d) It simplifies the performance review process.

The main idea behind profit sharing is to:

• a) Increase employees salaries across the board.

• b) Motivate employees to contribute to the company's success.

• c) Reward employees for exceptional performance only.

• d) Reduce the workload for all employees.

A potential drawback of profit sharing is that it:

• a) Simplifies the budgeting process for the company.

• b) Reduces the amount of profit available for the company to reinvest in its growth.

• c) Guarantees job security for all employees.

• d) Encourages unhealthy competition among employees.

Fringe benefits can be a financial motivator for employees because they:

• a) Increase the employee's taxable income

• b) Reduce the employee's own personal expenses

• c) Have no impact on the employee's finances

• d) Are always taken out of the employee's paycheck

Whom might object to a profit-sharing plan?

• a) Employees who are already highly motivated.

• b) Shareholders who could receive less profit as a result.

• c) Employees who are close to retirement.

• d) Management who would have less control over finances.

A potential drawback of performance-related pay is:

• a) It is always a large and motivating bonus.

• b) It requires clear and measurable targets.

• c) It eliminates the need for regular appraisals.

• d) It may not be effective if the bonus is too small.

Which of the following is NOT a typical step in a performance-related pay system?

• a) Setting individual performance targets

• b) Conducting annual performance reviews

• c) Paying a bonus for exceeding targets

• d) Automatically granting a bonus after one year

Share ownership schemes can help to:

• a) Increase the gap between business owners and workers

• b) Reduce the conflict of interests between owners and workers

• c) Make employees work longer hours

• d) Have no impact on employee motivation