WorldatWork Business Acumen for Compensation Professional - C8 Exam Practice Test

A. It is done primarily by evaluating market conditions and economic indicators.

B. It is done primarily by using historical revenue and expense data.

C. It is a precise estimate of what the future holds for the organization.

D. It uses internal and external factors to help answer questions about business expectations for the future.

A. Setting priorities

B. Procurement

C. Recruiting

D. Plan administration

A. Variable costs often have a heavier focus than fixed costs, which applies to all areas, including compensation.

B. Fixed costs are not a concern because they cannot be changed, so the focus is primarily on variable costs.

C. Fixed costs must be kept to a minimum, but variable costs can fluctuate since they tend to correlate with revenue.

D. Fixed costs and variable costs are equally important and both should be kept to a minimum.

A. The cash flow statement, along with the balance sheet and income statement

B. The cash flow statement and the income statement

C. The balance sheet

D. The income statement

A. Individuals with power in the organization who have the authority to overrule the concerns of opponents

B. The most senior leader with the highest level of authority

C. No one person. Identify your stakeholders and work to achieve consensus among the majority.

D. Influencers and decision-makers who have the respect of employees and are both proponents and opponents of your objectives

A. Compensate employees competitively

B. Select the best vendors

C. Reduce compensation expense

D. Improve program efficacy

A. Investors and Finance want to see money spent wisely. Legal must ensure compliance, and HR and operating departments want to see their needs taken into account to attract, retain and motivate a high quality workforce.

B. Operating departments and HR understand the company must live within its means and Finance cannot allocate funds to a budget if it is likely that profitability will be adversely affected.

C. Operating departments view compensation as it applies to them, HR must balance available resources to attract, retain and motivate employees and Finance knows the value of a motivated workforce and will provide the budget necessary to achieve it.

D. Investors want to maximize gains and want to see compensation tightly controlled and Legal needs to ensure that compensation plans do not attract undue scrutiny.

A. A company's efficiency in converting short-term capital into cash

B. The amount of cash needed to meet the company's short-term obligations

C. A company's mean capital expenditure per employee

D. The change in working capital over a specific period of time, typically one year