11-1. This chapter identifies three assumptions underlying pay-for-performance plans. Do you believe these assumptions are valid?

11-2. One observer notes that “the problem with using pay as an incentive is that it is such a powerful motivational weapon that management can easily lose control of the situation.” Do you agree? Why or why not?

11-3. Reread the Manager’s Notebook, “Incentives Come to Medicine: Do They Promote Unethical Behaviors Among Doctors? ” Do you agree that it is a good idea to offer incentives to doctors for better patient care? What are the drawbacks? Can these problems be avoided? Explain.

11-4. Some critics of pay-for performance programs warn that incentive pay may promote unethical behaviors among employees. Do you agree? Why or why not? What system would you put in place, if any, to prevent this from happening? Explain.

11-5. Based on your experiences working in a group task (for instance, completing a course project), what major problems have you observed when the team is rewarded as a group (for instance, a grade for entire team based on the quality of a completed class project)? What can be done to mitigate the problems you have identified? What could possibly go wrong if your recommendations are implemented? Explain.

11-6. Reread the Manager’s Notebook, “Healthy Living Incentives.” Do you believe that most employees value these incentives over cash? Do you think these incentives are capable of changing employees’ unhealthy habits? Explain.

11-7. Reread the Manager’s Notebook, “High-Priced CEOs: Are They Worth It? ” Develop a list of arguments in favor of the position of Prof. Desai (that CEO pay is irrational) and a list of arguments in favor of consultant Popelka (that CEO pay is rational). Which of the two sets of arguments seem to make most sense to you? Explain.

11-8. John Mackey, CEO of Whole Foods Market, keeps his pay low to keep staff morale high and donates half of his pay to charity. Most of his pay is based on Whole Foods’ performance. Mackey has blogged that stratospheric CEO pay is bad for business because it creates employee dissatisfaction, reduces employee loyalty, and induces the most talented employees to leave.116 Do you agree with Mackey’s outlook? Do you think more CEOs should follow his example? Explain.

11-9. A customer survey for Landmark Company reports that people do not trust what sales representatives say about their firm’s products. How might you use the compensation system to help change this negative image? Explain.