Free Business Acumen for Compensation Professional Practice Questions

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.

A.  

By using cash from other segments of the business

B.  

By using its high credit rating from prior years to receive a line of credit until the strategy begins to work

C.  

By selling its products and services at a loss until revenue increases and slowly raising prices until it begins to break even

D.  

By identifying and duplicating the strategy used by its main competitor.

A.  

Financial Management

B.  

HR Management

C.  

Resource Management

D.  

Policy Management

A.  

They are all reported on the balance sheet.

B.  

They are all sources of capital.

C.  

They all incur the same costs to the business.

D.  

Nothing. Each of these is a different financial metric.

A.  

Reduce compensation expense

B.  

Improve program efficacy

C.  

Select the best vendors

D.  

Compensate employees competitively

A.  

The employee

B.  

A concerned co-worker

C.  

The employee’s manager

D.  

The employee’s department head

A.  

Because the internal and external environments are constantly changing

B.  

Because the best interests of the organization take priority, which can lead to difficult decisions and implementation issues

C.  

Because they are emotional issues and stakeholders have many vested interests

D.  

Because strong business acumen is required for all compensation decisions

A.  

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

B.  

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

C.  

A company’s mean capital expenditure per employee

D.  

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

A.  

The most senior leader with the highest level of authority

B.  

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

C.  

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

D.  

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

A.  

The previous quarter

B.  

The budget

C.  

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

D.  

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