Log in
Economics
1
answer
0
watching
113
views

Describe a job compensated with incentive pay in your company. What performance evaluation metric is used, and how is it tied to compensation? Does this compensation scheme align the incentives of the employee with the goals of the company? Estimate the profit consequences of the scheme relative to the next best alternative.

Watch
1
answer
0
watching
113
views

For unlimited access to Homework Help, a Homework+ subscription is required.

Samantha Balando
Samantha BalandoLv7
28 Sep 2019

Unlock all answers

Get 1 free homework help answer.
Already have an account? Log in
Share

Related textbook solutions

Principles of Economics
2nd Edition, 2017
Openstax
ISBN: 9781947172364
Principles of Macroeconomics
2 Edition,
Openstax
ISBN: 9781947172388
Principles of Microeconomics
2 Edition,
Openstax
ISBN: 9781947172340

Related questions

Your employer decides to institute a new compensation scheme next year. They will pay you $25,000 no matter how much you work. However, since they employ nothing but workers who earn at least double the minimum wage, they will cut wages by 50%.

a. Draw this in terms of a budget constraint (what does it look like?).

b. What will this new compensation scheme do in terms of work effort (such as hours worked per year for the company)?

MUTIPLE CHOICE; CIRCLE THE CORRECT ANSWER. FOR TRUE/FALSE, JUST CIRCLE T OR F

31) According to research cited in the text, what is the primary reason that top-performing/high commitment employees gave for voluntarily leaving an organization?

A) career development

B) work-life balance

C) promotions

D) salary

32) The process of advising, counseling, and guiding employees is known as ________.

A) coaching

B) appraising

C) assessing

D) mentoring

33) ________ is a process for enabling employees to better understand and develop their career skills and interests and to use these skills and interests most effectively within the company and afterwards.

A) Career management

B) Career development

C) Career planning

D) Performance management

34) Jackie is working with a coach to identify her personal skills and interests. Afterwards, she will investigate opportunities that fit her skills and interests and set specific career goals. In which of the following activities is Jackie most likely participating?

A) career management

B) career development

C) career planning

D) job training

35) Which of the following is the simplest and most often used method for predicting the future performance of a candidate for promotion?

A) prior performance

B) aptitude tests

C) assessment centers

D) psychological exams

36) Poor attendance and voluntary turnover are most likely characteristics of ________.

A) decreasing employee engagement

B) minimal job expectations

C) shrinking labor markets

D) poor supervision

37) Which of the following terms refers to all forms of pay or rewards going to employees and arising from their employment?

A) salary

B) employee benefits

C) wage reimbursement

D) employee compensation

38) John is a sales representative in a jewelry store. He typically works 40 hours per week and his pay is completely based on his sales. He earns a 5% commission for every sale he makes. Which of the following terms best describes John's situation?

A) performance-based compensation

B) indirect financial compensation

C) time-based compensation

D) piecework pay

39) Which of the following is NOT a type of direct financial payment?

A) wages

B) insurance

C) incentives

D) commissions

40) John is a sales representative in a jewelry store. He typically works 40 hours per week and his pay is completely based on his sales. He earns a 5% commission for every sale he makes. Which of the following terms best describes John's situation?

A) performance-based compensation

B) indirect financial compensation

C) time-based compensation

D) piecework pay

Q1)Westside Plumbing and Heating Company is offered a contract for $100,000 to provide plumbing for a new building. The labor and equipment costs are calculated to be $60,000 for fulfilling the contract. Westside has materials in its inventory to complete the job. The raw materials initially cost the firm $50,000; however the material prices have declined in the interim and now cost only $37,500. Thus if the firm chose not to accept the contract and sells the materials, they would incur a loss of $12,500. Material prices are not expected to go up in the future. Should Westside accept the contract. Explain your answer.

Q2) The owners of a small manufacturing concern have hired a manager to run the company with the expectation that (s)he will buy the company after five years. The goal of the owners in making this hire is to find the appropriate manager that will increase profits substantially. Compensation of the new manager is a flat salary plus 50% of first $200,000 of profit, and then 5% of profit over $200,000. Purchase price for the company is set as 4.5
times net earnings (profit), computed as average annual profitability (prior to calculation of the managers bonus) over the next five years.
(a) Does the bonus structure for the manager provide the manager with the appropriate incentive to increase profits beyond the first $200,000 ? Explain briefly.
(b) Is it a good idea to link the purhcase price of the company to the earnings (profit) of the company. Given this linkage, what do you think the manager will try to do?
(c) Does this contract align the incentives of the new manager with the (current)goals of the owners?

Weekly leaderboard

Home
Homework Help 3,900,000
Economics 400,000
Start filling in the gaps now
Log in