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Scenario 13.1 John Davis, the Human Resource Manager for a Chain of Chain

question 23

Multiple Choice

Scenario 13.1
John Davis, the human resource manager for a chain of hotels, is trying to motivate the company's employees with an updated compensation plan.There are two groups of operating employees.Line employees are responsible for dealing directly with customers and their performance objectives are related to providing high-quality customer service.To do this, line personnel must undergo regular training to update their customer service skills.Operating managers are responsible for monitoring the activities of the line personnel and providing instructional/developmental support when needed.Currently, the line personnel are paid on an hourly basis while the operating managers are paid salaries on a monthly basis.If employees receive adequate performance appraisals, they can receive generous bonuses and pay raises.However, when performance evaluations are inadequate, employees do not receive any rewards.This method of appraisal is creating conflicts between the employees and the top management of the organization.John believes that his new plan to give employees shares of profit and stock on the basis of the results of performance evaluations will further motivate employees and managers.
-Refer to Scenario 13.1.Refer to Scenario 13.1.The different pay structures used among many line employees could create a perception of injustice on the basis of the _____ theorywhen an employee finds that his income is lower than his co-worker, even though both their input-outcome ratio is same.

Definitions:

Perfectly Elastic

A situation in which the quantity demanded or supplied changes infinitely in response to any change in price.

Government Revenue

The income received by government from taxes, fees, and other sources used to fund public services and obligations.

Tax

A mandatory fiscal fee or different form of levy placed on a taxpayer by a government entity to finance government expenditures and a range of public spending.

Inelasticities

A measure of the sensitivity, or lack thereof, of one variable to a change in another variable, typically used in economics to describe situations where changes in price have little to no effect on supply or demand.