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NEW QUESTION 53
What is the most common term for the broad framework of principles and approaches that guide day-to-day decisions affecting the business, including how it positions itself in the market?
- A. The corporate objective
- B. The mission statement
- C. The competitive strategy
- D. The business plan
Answer: C
NEW QUESTION 54
Regarding cost analysis of compensation expense, which job is most likely to incur fixed costs for the company?
- A. IT contractor
- B. HR Director
- C. Account executive
- D. Production worker
Answer: B
NEW QUESTION 55
What is a primary objective of profit-sharing and performance-sharing variable pay plans?
- A. To increase employee identification with the organization's success
- B. To achieve organizational cost savings through base pay reductions
- C. To reward individual employees for some significant contribution
- D. To defer compensation expenses to future reporting periods
Answer: A
NEW QUESTION 56
Internal process metrics are most useful in which of the following situations?
- A. Evaluating customer perceptions of products or services
- B. Assessing how well the business is running
- C. Measuring the financial success of the business
- D. Determining employee satisfaction levels
Answer: B
NEW QUESTION 57
Why are lump-sum increases generally used?
- A. To reward employees under short-term incentive plans
- B. To elevate employees who are below the midpoint in the range
- C. To make up for benefits not provided by the organization
- D. To control annual fixed costs from base pay adjustments
Answer: D
NEW QUESTION 58
Understanding basic organization design principles is an example of what key competency for compensation professionals?
- A. Financial Management
- B. Policy Management
- C. HR Management
- D. Resource Management
Answer: C
NEW QUESTION 59
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 will be able to explain the negative consequences of opposing your position
- B. Because you will be more informed when differences of opinion occur, lending more credibility to your position
- C. Because stakeholders with diverse opinions tend to compromise when they are aware that others know their weaknesses
- D. Because you can demonstrate your understanding of issues from multiple perspectives
Answer: D
NEW QUESTION 60
Your company has had a strong fiscal year with a 15% increase in net income over the prior fiscal year. Share prices are at an all time high. Working with Finance, you have arrived at a 2.5% merit increase budget for the next fiscal year, a smaller increase than the last fiscal year. Finance has indicated that some large capital expenditures will be needed next year, so the company needs to conserve resources. Additionally, Legal is in final negotiations on a lawsuit that may be very costly to the company. Word of the smaller increases has line management concerned that they will lose their best performers. Given all of these factors, what is your best course of action?
- A. Meet with Finance and make a case for a larger merit increase budget because the loss of key talent will cost more over the long term than the savings from the smaller merit increases
- B. Implement the merit increase budget as is because the anticipated financial obligations have made it necessary
- C. Gather the perspectives of all stakeholders, analyze their individual concerns and meet to determine whether a compromise solution is possible
- D. Recommend a reduction in force to eliminate poor performers, which will increase the merit budget by reducing headcount
Answer: C
NEW QUESTION 61
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 identifying and duplicating the strategy used by its main competitor.
- B. By using its high credit rating from prior years to receive a line of credit until the strategy begins to work
- C. By using cash from other segments of the business
- D. By selling its products and services at a loss until revenue increases and slowly raising prices until it begins to break even
Answer: C
NEW QUESTION 62
What best describes an effective core technique for communicating with executives?
- A. Assume they have little knowledge of the issue and make a detailed presentation leading up to the purpose of the meeting.
- B. Recommend a solution that will solve the issue and explain why it is the best solution available.
- C. 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.
- D. Focus on negative issues first, such as compensation costs exceeding budget, to get their attention
Answer: B
NEW QUESTION 63
What best describes the primary purpose of budgeting?
- A. Complying with local legislation and maintaining accurate records to prepare financial reports and tax documents
- B. Making choices about spending based on expectations of performance
- C. Increasing profitability of the business annually to maximize shareholder/owner value
- D. Limiting spending to a fixed percentage of organizational revenue
Answer: B
NEW QUESTION 64
What is the most accurate statement regarding forecasting?
- A. It uses internal and external factors to help answer questions about business expectations for the future.
- B. It is done primarily by using historical revenue and expense data.
- C. It is done primarily by evaluating market conditions and economic indicators.
- D. It is a precise estimate of what the future holds for the organization.
Answer: A
NEW QUESTION 65
What best describes a key competency of compensation professionals regarding HR management of the organization's employees?
- A. Monitoring individual employee career paths and succession planning
- B. Ensuring they are appropriately selected, developed, appraised and rewarded
- C. Ensuring that all regulatory and voluntary payroll deductions are properly administered
- D. Communicating regularly with line management on performance management
Answer: B
NEW QUESTION 66
What happens to the marginal cost if revenue accelerates slower than variable costs but fixed costs remain the same?
- A. It increases at the same rate as variable costs.
- B. It decreases because variable costs are increasing.
- C. It becomes increasingly higher as revenues increase.
- D. It remains the same.
Answer: C
NEW QUESTION 67
What best describes the most effective approach for facilitating fact-based decisions?
- A. Ensuring support from all internal and external stakeholders
- B. Determining, sourcing and collecting appropriate data
- C. Estimating results based on historical data
- D. Using statistical methods to predict outcomes
Answer: B
NEW QUESTION 68
What best describes an effective approach for balancing multiple priorities and perspectives regarding compensation?
- A. Finding a compromise that may not appease all stakeholders but does not give any one group or person everything they are seeking
- B. Giving priority to perspectives based on the job or influence level of the stakeholders
- C. Being firm and uncompromising in your decision-making
- D. Representing your view with data and relating it to business results
Answer: D
NEW QUESTION 69
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