2021 Valid CECP Real Exam Questions (Updated) 100% Dumps & Practice Exam
[UPDATED 2021] WorldatWork CECP Questions Prepare with Free Demo of PDF
NEW QUESTION 48
What statement is most accurate regarding communication of compensation information?
- A. 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.
- B. Compensation terms are well-known and easily understood by most stakeholders.
- C. Compensation professionals should anticipate the level of the audience and tailor messages to their needs.
- D. 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.
Answer: C
NEW QUESTION 49
Regarding fixed and variable costs, what are Finance's primary concerns?
- A. Fixed costs must be kept to a minimum, but variable costs can fluctuate since they tend to correlate with revenue.
- B. Variable costs often have a heavier focus than fixed costs, which applies to all areas, including compensation.
- C. Fixed costs are not a concern because they cannot be changed, so the focus is primarily on variable costs.
- D. Fixed costs and variable costs are equally important and both should be kept to a minimum.
Answer: B
NEW QUESTION 50
Understanding basic organization design principles is an example of what key competency for compensation professionals?
- A. Policy Management
- B. Resource Management
- C. HR Management
- D. Financial Management
Answer: C
NEW QUESTION 51
Which of the following best describes the most likely perspectives of different groups in the organization that compensation professionals must be aware of?
- A. Operating departments view compensation as it applies to them, HR must balance available resources to attract, retain and motivate employees and Finance knows the value of a motivated workforce and will provide the budget necessary to achieve it.
- B. Operating departments and HR understand the company must live within its means and Finance cannot allocate funds to a budget if it is likely that profitability will be adversely affected.
- C. Investors want to maximize gains and want to see compensation tightly controlled and Legal needs to ensure that compensation plans do not attract undue scrutiny.
- D. Investors and Finance want to see money spent wisely. Legal must ensure compliance, and HR and operating departments want to see their needs taken into account to attract, retain and motivate a high quality workforce.
Answer: D
NEW QUESTION 52
What happens to the marginal cost if revenue accelerates slower than variable costs but fixed costs remain the same?
- A. It becomes increasingly higher as revenues increase.
- B. It decreases because variable costs are increasing.
- C. It remains the same.
- D. It increases at the same rate as variable costs.
Answer: A
NEW QUESTION 53
Which financial statement or combination of statements provide(s) the most comprehensive view of the company's financial situation?
- A. The income statement
- B. The balance sheet
- C. The cash flow statement, along with the balance sheet and income statement
- D. The cash flow statement and the income statement
Answer: C
NEW QUESTION 54
What do working capital metrics evaluate?
- A. The change in working capital over a specific period of time, typically one year
- B. A company's mean capital expenditure per employee
- C. The amount of cash needed to meet the company's short-term obligations
- D. A company's efficiency in converting short-term capital into cash
Answer: D
NEW QUESTION 55
What statement is most accurate regarding compensation communications with employees at varying levels?
- A. They generally require a greater degree of detail for lower level employees who have less of an understanding of pay plan design.
- B. 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.
- 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 tend to be fairly consistent because the elements of pay may differ, but the concerns are universal.
Answer: C
NEW QUESTION 56
Gross margin is which of the following, as percent of revenue?
- A. Gross profit minus expenses
- B. Expenses plus taxes and depreciation
- C. Cost of goods sold
- D. Revenue minus cost of goods sold
Answer: D
NEW QUESTION 57
Using efficient and cost-effective approaches to integrate technology into the workplace is an example of what key competency for compensation professionals?
- A. HR Management
- B. Resource Management
- C. Policy Management
- D. Financial Management
Answer: B
NEW QUESTION 58
How do commissions typically differ from annual incentives for non-executive employees?
- A. They are intended to align the interests of the employee with those of the organization.
- B. They tend to make up the larger portion of an employee's total compensation.
- C. They are offered to motivate employee performance.
- D. They are based on a predetermined performance and reward schedule.
Answer: B
NEW QUESTION 59
What is the term for the skills, technologies, applications and practices of continuous iterative exploration and investigation of past business performance used to gain insight and drive business planning?
- A. Business analytics
- B. Business forecasting
- C. Statistical analysis
- D. Predictive modeling
Answer: A
NEW QUESTION 60
Which of the following is a type of variable pay?
- A. Hourly pay
- B. Bonuses
- C. Piece rate
- D. Pay for time not worked
Answer: B
NEW QUESTION 61
If employees have a significant impact on the bottom line, what type of pay mix is most appropriate?
- A. A varying mix depending on employee influence on goals to provide the necessary incentive to maximize profits
- B. High base pay and low variable pay to ensure predictability of total compensation expense
- C. 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
- D. 100% variable pay to motivate all employees to maximize productivity and sales
Answer: A
NEW QUESTION 62
What type of pay increase is given when an organization finds that its compensation program is behind competitive market rates?
- A. Merit
- B. Cost of living
- C. General
- D. Automatic
Answer: C
NEW QUESTION 63
Regarding market position, a business with a high market share but low growth potential is typically referred to as what?
- A. A Question Mark
- B. A Star
- C. A Cash Cow
- D. A Market Leader
Answer: C
NEW QUESTION 64
What is the most accurate statement regarding the effect of compensation plans on the organization?
- A. They typically have the greatest effect on net income and operating results of any organizational expense or program
- B. They affect the organization's overall financial status and impact multiple stakeholders across most, if not all, business units
- C. They have very little effect as long as they are managed effectively and efficiently
- D. Their success or failure is closely tied to the success or failure of organizationwide goals and objectives
Answer: B
NEW QUESTION 65
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?
- A. Operational excellence
- B. Customer intimacy
- C. Brand loyalty
- D. Product/service leadership
Answer: A
NEW QUESTION 66
How are the compensation communication needs of managers different from those of individual employees?
- A. They are also responsible for merit increases, incentives and hiring so they have greater information needs.
- B. They have more duties and responsibilities and are less likely to have the time to discuss compensation issues.
- C. They aren't. Managers are concerned about their compensation also.
- D. They tend to have more influence, so it is important to resolve any concerns they have quickly and efficiently.
Answer: A
NEW QUESTION 67
What type of equity incentive gives employees the right to purchase company shares at a specified price?
- A. Stock/share options
- B. Stock/share grants
- C. Restricted stock/shares
- D. Performance units
Answer: A
NEW QUESTION 68
Which of the following is primarily focused on giving special attention to employee actions, efforts, behavior or performance?
- A. Compensation
- B. Career opportunities
- C. Benefits
- D. Recognition
Answer: D
NEW QUESTION 69
What best describes the most effective approach for facilitating fact-based decisions?
- A. Ensuring support from all internal and external stakeholders
- B. Using statistical methods to predict outcomes
- C. Determining, sourcing and collecting appropriate data
- D. Estimating results based on historical data
Answer: C
NEW QUESTION 70
What is the most accurate statement regarding forecasting?
- A. It is done primarily by evaluating market conditions and economic indicators.
- B. It is done primarily by using historical revenue and expense data.
- C. It uses internal and external factors to help answer questions about business expectations for the future.
- D. It is a precise estimate of what the future holds for the organization.
Answer: C
NEW QUESTION 71
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