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NEW QUESTION 32
If a company has a higher percentage of employees with fixed compensation than variable compensation, what happens as revenues increase?
- A. Compensation costs and revenue increase at approximately the same rate.
- B. Compensation costs eventually decrease as a percent of revenue, increasing profit growth.
- C. Compensation costs eventually stabilize and become a consistent percent of revenue.
- D. Compensation costs remain the same as a percent of revenue until variable compensation costs exceed fixed compensation costs.
Answer: B
NEW QUESTION 33
Which of the following best describes the guiding principles and/or beliefs shared by stakeholders in an organization?
- A. Values
- B. Vision
- C. Mission
- D. Strategy
Answer: A
NEW QUESTION 34
The XYZ Company opened a new manufacturing facility with a capital investment of 10,000,000. The cost to obtain the capital was 8%. In its first year of operations, the facility's net operating profit after taxes was 10,500,000. What was the economic value added (EVA) using the EVA formula?
- A. 8,000,000
- B. 500,000
- C. 840,000
- D. 9,700,000
Answer: D
NEW QUESTION 35
What is the primary reason why a compensation professional working for a multinational company should understand regulatory requirements and application of rewards globally?
- A. Because it is possible to pay significantly less for talent in different countries and compensation should advise management on when and where to locate various jobs within the company
- B. Because legal compliance with compensation-related regulations is the responsibility of the compensation department
- C. Because the compensation professional has a fiduciary responsibility to ensure that the financial resources of their organization are spent in a prudent manner
- D. They shouldn't. Due to the complexities of global regulations and practices, compensation administration outside of the home country should be outsourced.
Answer: C
NEW QUESTION 36
When connecting with other business units, what best describes a reason why is it important to keep up to date on organizational challenges?
- A. Because you can demonstrate your understanding of issues from multiple perspectives
- B. Because stakeholders with diverse opinions tend to compromise when they are aware that others know their weaknesses
- C. Because you will be more informed when differences of opinion occur, lending more credibility to your position
- D. Because you will be able to explain the negative consequences of opposing your position
Answer: A
NEW QUESTION 37
An organization whose focus is on obtaining capital, marketing products or services, sales growth and cash conservation is most likely to be in what stage of the business lifecycle?
- A. Start-up
- B. Decline
- C. Growth
- D. Mature
Answer: A
NEW QUESTION 38
Which type of variable pay is best described by this statement: Criteria are discretionary and often defined in broad terms such as "exceptional customer service"?
- A. Recognition
- B. Commission
- C. Bonus
- D. Profit-sharing
Answer: A
NEW QUESTION 39
You have been asked to develop a short-term incentive plan that motivates employees in business units to increase productivity. Your team has designed a plan that rewards managers and employees quarterly based on achievement against target on measures that should generate productivity increases that will self-fund the plan. When presenting the plan to senior management, what would be the best strategy to receive approval?
- A. Make the case that a self-funded plan poses no risk to the organization while creating the potential for significant gains
- B. Provide details on the plan design and measures and how they will be administered to employees at different levels
- C. Identify in advance the priorities of the various stakeholders and design your presentation to address any objections or perceptions they may have
- D. Demonstrate how it is aligned to the rewards philosophy, principles and organizational business strategy
Answer: D
NEW QUESTION 40
Step-rate increase programs provide employees the opportunity to receive two regular pay increases at which points?
- A. At established dates and then every six months thereafter
- B. On January 1 and July 1 of each year
- C. At the anniversary date and at the annual merit increase date
- D. Once when they move a step, and again when the step value changes
Answer: D
NEW QUESTION 41
How is the purpose of a non-profit organization typically communicated?
- A. Explained throughout the mission, vision, values and strategy
- B. Reflected in the mission, vision, values and strategy although often not stated directly
- C. Implied in the mission, vision and strategy and specifically explained on the organization's website
- D. Documented internally but not released to the public to protect trade secrets and maintain competitive advantage
Answer: B
NEW QUESTION 42
What type of equity incentive gives employees the right to purchase company shares at a specified price?
- A. Stock/share options
- B. Restricted stock/shares
- C. Performance units
- D. Stock/share grants
Answer: A
NEW QUESTION 43
To ensure appropriate funding levels, the compensation professional must generally do which of the following?
- A. Demonstrate broad understanding of principles of financial management and business expertise
- B. Partner with multiple departments and external consultants and vendors
- C. Determine which programs are crucial to the enterprise and which programs are expendable
- D. Possess a high level of education and competency in accounting principles
Answer: A
NEW QUESTION 44
What best describes an effective core technique for communicating with executives?
- A. 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.
- B. Assume they have little knowledge of the issue and make a detailed presentation leading up to the purpose of the meeting.
- C. Focus on negative issues first, such as compensation costs exceeding budget, to get their attention
- D. Recommend a solution that will solve the issue and explain why it is the best solution available.
Answer: D
NEW QUESTION 45
What do working capital metrics evaluate?
- A. The amount of cash needed to meet the company's short-term obligations
- B. A company's mean capital expenditure per employee
- C. The change in working capital over a specific period of time, typically one year
- D. A company's efficiency in converting short-term capital into cash
Answer: D
NEW QUESTION 46
What statement is most accurate regarding communication of compensation information?
- A. Compensation terms and practices are unclear to most individuals who do not work in this area and communication should be tailored to the least informed member of the target audience.
- B. Compensation terms are well-known and easily understood by most stakeholders.
- C. Compensation professionals should anticipate the level of the audience and tailor messages to their needs.
- D. The ready availability of information online has made it unnecessary for compensation professionals to tailor messages since individuals can research terms and concepts after the fact if they don't understand a communication.
Answer: C
NEW QUESTION 47
Which of the following is the best example of a variable cost?
- A. Audit fees
- B. Maintenance
- C. Rent
- D. Shipping
Answer: D
NEW QUESTION 48
The Alpha Company was once a strong company that commanded a high percentage of the market it operated in. In recent years, Alpha has been losing market share to competitors in its primary line of business and has been unable to find a competitive strategy to grow and return to profitability. Given its market position, how is Alpha most likely finding the monetary resources to continue operations?
- A. By using its high credit rating from prior years to receive a line of credit until the strategy begins to work
- B. By using cash from other segments of the business
- C. By identifying and duplicating the strategy used by its main competitor.
- D. By selling its products and services at a loss until revenue increases and slowly raising prices until it begins to break even
Answer: B
NEW QUESTION 49
Which financial statement or combination of statements provide(s) the most comprehensive view of the company's financial situation?
- A. The balance sheet
- B. The cash flow statement, along with the balance sheet and income statement
- C. The income statement
- D. The cash flow statement and the income statement
Answer: B
NEW QUESTION 50
Regarding key competencies for financial management, HR management and resource management, what sets top performers apart?
- A. The level of formal education in each area
- B. The ability to tie them together, distill key messages and make impactful decisions
- C. Effective interpersonal and communication skills that can overshadow minor deficiencies in any one area
- D. The ability to prioritize which is most critical in any given situation and allocate time and resources accordingly
Answer: B
NEW QUESTION 51
"Cost-benefit thinking" is most useful in the context of financial management for purposes of what?
- A. Plan administration
- B. Procurement
- C. Recruiting
- D. Setting priorities
Answer: D
NEW QUESTION 52
Cash compensation is a reward intended to provide what type of motivation?
- A. Intrinsic
- B. Extrinsic
Answer: B
NEW QUESTION 53
The Delta Company has experienced increased turnover in the past two years. Data from exit interviews indicate that most of those leaving did so for better opportunities and higher compensation. If Delta pays at the highest percentile of the market for their peer group, what data analysis should they do?
- A. Qualitative data collection to talk to key stakeholders and employees and determine whether the exit interviews accurately reflect their concerns
- B. No additional data analysis is needed. Delta should increase pay rates based on the existing data to decrease turnover.
- C. Additional quantitative analysis to determine whether pay rates are truly competitive or existing data are unreliable
- D. Qualitative data collection in the form of an employee survey with questions about employee satisfaction with pay levels
Answer: A
NEW QUESTION 54
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