Get Certified Easily with Online CECP Dumps

Page 1 of 3

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

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.

2. Regarding compensation communications with executives, where do they tend to need the greatest level of understanding?

In the methods and processes used to make pay decisions

In the details of their individual compensation packages

In the overall program objectives

In the differences in pay levels for the different levels of the organization

3. What best describes what forecasting helps the organization to do?

Recognize possible issues and concerns that will drive budget planning

Prepare quarterly and annual reports and their associated statements

Withhold payroll taxes for all elements of compensation

Anticipate future capital needs by determining when the organization will enter the next phase of the business lifecycle

4. Regarding fixed and variable costs, what are Finance’s primary concerns?

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

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

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

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

5. Understanding basic organization design principles is an example of what key competency for compensation professionals?

Financial Management

HR Management

Resource Management

Policy Management

6. What do working capital metrics evaluate?

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

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

A company’s mean capital expenditure per employee

The amount of cash needed to meet the company’s short-term obligations

7. Which of the following is a true statement regarding the talent development needs of employees?

If employees believe their skills will fall behind their professional peers, they will be afraid to look for another job.

Obtaining and developing skills provides leverage for the employee to seek more compensation.

Opportunities for career advancement are important to employees in their decisions to either join or leave an organization.

8. Which of the following is the best example of applying business executive to data analysis?

Compiling data needed to calculate salary budgets and merit increases

Identifying trends and key messages emerging over time

Reviewing historical trends to complete annual budgets

Providing quarterly incentive estimates for accruals

9. What best describes the compensation philosophy?

The compensation committee’s interpretation of how employees can best meet business objectives

Guidelines that determine the administration of compensation programs

Statement of what the organization believes about how people should be paid

Principles that guide the design of compensation programs

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

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.

Page 2 of 3

11. Which of the following best describes present value?

The current value of holdings

The current value of holdings and how much it will grow over time at a given rate of return

The desired value in the future and what needs to be invested today to realize that amount

The difference between the desired value in the future and the current value as a percentage of the desired value

12. What is the most accurate statement regarding the effect of compensation plans on the organization?

They typically have the greatest effect on net income and operating results of any organizational expense or program

Their success or failure is closely tied to the success or failure of organization wide goals and objectives

They have very little effect as long as they are managed effectively and efficiently

They affect the organization’s overall financial status and impact multiple stakeholders across most, if not all, business units

13. In what stage of the business lifecycle do companies typically begin standardizing procedures through policy creation?

Start-up

Growth

Mature

Decline

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

EBIT

EPS

Net income

Operating profit

15. Which of the following is a type of variable pay?

Salary

Piece rate

Hourly rate

Commissions

16. Which of the following is the most accurate statement about the business strategy?

It usually is a secondary consideration in compensation design.

It is the company's plan for competitive positioning of its products or services.

It must be written after the company's operating plans are approved by senior management.

It is developed for compensation, benefits and the work-life using the HR strategy as a basis.

17. The XYZ Company focuses on maintaining/increasing market share and its products tend to be more evolutionary than revolutionary.

What stage of the business lifecycle is XYZ most likely in?

Start-up

Growth

Mature

Decline

18. What metric should compensation professionals pay closest attention to for ensuring alignment between the compensation strategy and the HR and business strategies?

Variable pay costs as a percent of total compensation

Total compensation expense for the business, including base pay and variable pay

Reward costs as a percent of total operating costs

The organization’s market comparatio

19. Information on the annual report shows results for what time period?

The calendar year from January 1 to December 31

The fiscal year, which matches the calendar year from January 1 to December 31

The fiscal year, which shows results from July 1 to June 30

The fiscal year, which may match the calendar year or may be a different 12-month period, depending on the company

20. Why are lump-sum increases generally used?

To control annual fixed costs from base pay adjustments

To elevate employees who are below the midpoint in the range

To reward employees under short-term incentive plans

To make up for benefits not provided by the organization

Page 3 of 3

21. What statement is most accurate regarding communication of compensation information?

Compensation professionals should anticipate the level of the audience and tailor messages to their needs.

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.

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.

Compensation terms are well-known and easily understood by most stakeholders.

22. What best describes the most effective tactic for getting stakeholders’ attention and buy-in?

Ask them to review or provide feedback, especially on something you have done for them

Talk to the individuals they report to in advance and gain their support so the stakeholders realize upper management already supports your position

Schedule a meeting of all stakeholders and make a strong case that overcomes all of their objections

Explain in precise terms to each stakeholder how your position is the most realistic approach to the issue or concern

23. Regarding fixed and variable costs, what tends to happen as revenue increases?

Variable costs decrease

Fixed costs decrease

Variable costs increase and consume a higher percent of revenue

Fixed costs remain the same and consume a lower percent of revenue

24. Which of the following factors has the greatest impact on how aggressive a stance (high vs. low) an organization will take in terms of where it positions itself against the market with its compensation strategy?

The industry it operates in

The bottom line

The organizational headcount

The risk tolerance of compensation leaders

25. Cash compensation is a reward intended to provide what type of motivation?

Intrinsic

Extrinsic

26. Internal process metrics are most useful in which of the following situations?

Assessing how well the business is running

Determining employee satisfaction levels

Measuring the financial success of the business

Evaluating customer perceptions of products or services

27. The Alpha company ships an order to a customer on March 1st and invoices the customer for the product with the shipment, with payment terms of net 30 days. The customer’s payment is received on April 5th. The payment clears the bank and shows on Alpha’s account on April 8th.

If Alpha is using accrual accounting, when does it record the revenue for this sale?

March 1st

March 31st

April 5th

April 8th

28. The “Value Store” retail company offers its customers low prices and ease of purchase by minimizing waste and striving for high efficiency.

What strategy is the “Value Store” using?

Operational excellence

Product/service leadership

Customer intimacy

Brand loyalty

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

Financial Management

HR Management

Resource Management

Policy Management

30. 1.Administering budgets is an example of what key competency for compensation professionals?

Financial Management

HR Management

Resource Management

Policy Management

[email protected]

Mon - Sat 9:00am - 6:00pm

Get Certified Easily with Online CECP Dumps

Related

Posts

About Us

EMAIL

Services

Opening Hours