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WorldatWork Regulatory Environments for Compensation Programs Sample Questions:

1. 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 able to explain the negative consequences of opposing your position
D) Because you will be more informed when differences of opinion occur, lending more credibility to your position

2. 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 have more duties and responsibilities and are less likely to have the time to discuss compensation issues.
C) They are also responsible for merit increases, incentives and hiring so they have greater information needs.
D) They tend to have more influence, so it is important to resolve any concerns they have quickly and efficiently.

3. What best describes the primary purpose of budgeting?

A) Making choices about spending based on expectations of performance
B) Increasing profitability of the business annually to maximize shareholder/owner value
C) Complying with local legislation and maintaining accurate records to prepare financial reports and tax documents
D) Limiting spending to a fixed percentage of organizational revenue

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

A) Salary
B) Piece rate
C) Hourly rate
D) Commissions

5. 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 reward individual employees for some significant contribution
C) To achieve organizational cost savings through base pay reductions
D) To defer compensation expenses to future reporting periods

Solutions: