WorldatWork C8 Exam Questions Free Practice Test

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Questions # 1:

Using efficient and cost-effective approaches to integrate technology into the workplace is an example of what key competency for compensation professionals?

Options:

Financial Management

HR Management

Resource Management

Policy Management

Expert Solution

Questions # 2:

What best describes the primary purpose of budgeting?

Options:

Limiting spending to a fixed percentage of organizational revenue

Making choices about spending based on expectations of performance

Increasing profitability of the business annually to maximize shareholder/owner value

Complying with local legislation and maintaining accurate records to prepare financial reports and tax documents

Expert Solution

Questions # 3:

Which of the following is the earnings available to equity owners after paying debt and taxes?

Options:

EBIT

EPS

Net income

Operating profit

Expert Solution

Questions # 4:

If a company has a higher percentage of employees with fixed compensation than variable compensation, what happens as revenues increase?

Options:

Compensation costs eventually stabilize and become a consistent percent of revenue.

Compensation costs and revenue increase at approximately the same rate.

Compensation costs eventually decrease as a percent of revenue, increasing profit growth.

Compensation costs remain the same as a percent of revenue until variable compensation costs exceed fixed compensation costs.

Expert Solution

Questions # 5:

What best describes an effective core technique for communicating with executives?

Options:

Focus on negative issues first, such as compensation costs exceeding budget, to get their attention

Provide a wide range of facts and figures. With their high level of responsibility, executives must have all the data before they can make informed decisions.

Assume they have little knowledge of the issue and make a detailed presentation leading up to the purpose of the meeting.

Recommend a solution that will solve the issue and explain why it is the best solution available.

Expert Solution

Questions # 6:

If employees have a significant impact on the bottom line, what type of pay mix is most appropriate?

Options:

A varying mix depending on employee influence on goals to provide the necessary incentive to maximize profits

100% variable pay to motivate all employees to maximize productivity and sales

90/10 for the majority of employees (base/variable) to share in the company’s success with increased variable pay for management/executives to motivate employees to seek higher positions

High base pay and low variable pay to ensure predictability of total compensation expense

Expert Solution

Questions # 7:

As a general rule, what are individual contributors most likely to ask about their compensation?

Options:

What the take-home pay will be

How their pay compares to co-workers

How the company sets compensation budgets

How the company makes pay decisions that affect them

Expert Solution

Questions # 8:

What best describes an effective approach for balancing multiple priorities and perspectives regarding compensation?

Options:

Being firm and uncompromising in your decision-making

Representing your view with data and relating it to business results

Finding a compromise that may not appease all stakeholders but does not give any one group or person everything they are seeking

Giving priority to perspectives based on the job or influence level of the stakeholders

Expert Solution

Questions # 9:

What statement is most accurate regarding compensation communications with employees at varying levels?

Options:

They tend to be fairly consistent because the elements of pay may differ, but the concerns are universal.

They generally require a greater degree of detail for lower level employees who have less of an understanding of pay plan design.

They usually require more detail for senior employees regarding plan details and performance and the needs from one employee group to another can vary greatly.

They should be kept to a minimum for employees at all levels to maximize efficiency and efforts can be focused only on those who have questions.

Expert Solution

Questions # 10:

The “return” represented by the Total Shareholder Return (TSR) metric is the increase in what?

Options:

Earnings

Market capitalization

Increased market value and reinvested dividends paid

Expert Solution

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