WorldatWork Certified Compensation Professional (CCP) C8 Questions & Answers

• Question 21:

  What happens to the marginal cost if revenue accelerates slower than variable costs but fixed costs remain the same?

  A. It remains the same.

  B. It decreases because variable costs are increasing.

  C. It increases at the same rate as variable costs.

  D. It becomes increasingly higher as revenues increase.

  Correct Answer: D

• Question 22:

  How are the compensation communication needs of managers different from those of individual employees?

  A. They aren't. Managers are concerned about their compensation also.

  B. They are also responsible for merit increases, incentives and hiring so they have greater information needs.

  C. They tend to have more influence, so it is important to resolve any concerns they have quickly and efficiently.

  D. They have more duties and responsibilities and are less likely to have the time to discuss compensation issues.

  Correct Answer: B

• Question 23:

  What information is found on the balance sheet?

  A. A list of what is owned, what is owed and the equity of an entity

  B. The revenues and expenses incurred by an entity over a period of time

  C. The change during the reporting period in cash and cash equivalents

  D. The profitability of the company as of a specific date

  Correct Answer: A

• Question 24:

  What best describes what forecasting helps the organization to do?

  A. Recognize possible issues and concerns that will drive budget planning

  B. Prepare quarterly and annual reports and their associated statements

  C. Withhold payroll taxes for all elements of compensation

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

  Correct Answer: A

• Question 25:

  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 legal compliance with compensation-related regulations is the responsibility of the compensation department

  B. Because the compensation professional has a fiduciary responsibility to ensure that the financial resources of their organization are spent in a prudent manner

  C. 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

  D. They shouldn't. Due to the complexities of global regulations and practices, compensation administration outside of the home country should be outsourced.

  Correct Answer: B

• Question 26:

  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?

  A. The industry it operates in

  B. The bottom line

  C. The organizational headcount

  D. The risk tolerance of compensation leaders

  Correct Answer: B

• Question 27:

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

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

  B. Compensation costs and revenue increase at approximately the same rate.

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

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

  Correct Answer: C

• Question 28:

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

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

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

  C. 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.

  D. 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.

  Correct Answer: C

• Question 29:

  What question is answered by the organization's mission statement?

  A. What direction will we take?

  B. How do we work?

  C. Why are we in business?

  D. How will we achieve our objectives?

  Correct Answer: C

• Question 30:

  Which of the following best describes the guiding principles and/or beliefs shared by stakeholders in an organization?

  A. Mission

  B. Vision

  C. Values

  D. Strategy

  Correct Answer: C