WorldatWork C8 Business Acumen for Compensation Professional Exam Practice Test

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

Compensation costs and revenue increase at approximately the same rate.

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

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

A varying mix depending on employee influence on goals to provide the necessary incentive to maximize profits

100% variable pay to motivate all employees to maximize productivity and sales

90/10 for the majority of employees (base/variable) to share in the company’s success with increased variable pay for management/executives to motivate employees to seek higher positions

High base pay and low variable pay to ensure predictability of total compensation expense

A description of who the organization is, where it is headed and what it wants for the future

A written explanation of the intention or purpose of the organization and why it is in business

A statement of what kind of organization it wants to be and the guiding principles and/or beliefs shared by stakeholders

A detailed account of the organization’s goals, directions to achieve them and how it will compete

EBIT

EPS

Net income

Operating profit

The employee

A concerned co-worker

The employee’s manager

The employee’s department head

An understanding of the culture and subcultures of your organization

The capacity to manage multiple projects and priorities and meet deadlines

A willingness to take on additional duties and responsibilities when resources are limited

A thorough understanding of the products and/or services your organization provides

Being firm and uncompromising in your decision-making

Representing your view with data and relating it to business results

Finding a compromise that may not appease all stakeholders but does not give any one group or person everything they are seeking

Giving priority to perspectives based on the job or influence level of the stakeholders

The previous quarter

The budget

The same quarter in the previous year, plus the current six-month or nine-month cumulative comparables

The aggregate performance of the same quarter in the previous three years

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

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

The change during the reporting period in cash and cash equivalents

The profitability of the company as of a specific date

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 organizationwide 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

Revenue minus cost of goods sold

Expenses plus taxes and depreciation

Gross profit minus expenses

Cost of goods sold