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WorldatWork Regulatory Environments for Compensation Programs Sample Questions:

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

A) They tend to have more influence, so it is important to resolve any concerns they have quickly and efficiently.
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 are also responsible for merit increases, incentives and hiring so they have greater information needs.

2. When trying to achieve compromise and collaboration to achieve your goals, on which stakeholder(s) should you focus most of your efforts?

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) Individuals with power in the organization who have the authority to overrule the concerns of opponents
D) Influencers and decision-makers who have the respect of employees and are both proponents and opponents of your objectives

3. What best describes what forecasting helps the organization to do?

A) Anticipate future capital needs by determining when the organization will enter the next phase of the business lifecycle
B) Withhold payroll taxes for all elements of compensation
C) Recognize possible issues and concerns that will drive budget planning
D) Prepare quarterly and annual reports and their associated statements

4. Which of the following statements best describes defined benefit (DB) plans?

A) Individual accounts must be maintained for each participant.
B) They are often integrated with government-sponsored programs.
C) There is no promise of a specific benefit at retirement.
D) Employees are at risk for financial resources.

5. The XYZ Company opened a new manufacturing facility with a capital investment of 10,000,000. The cost to obtain the capital was 8%. In its first year of operations, the facility's net operating profit after taxes was
10,500,000. What was the economic value added (EVA) using the EVA formula?

A) 500,000
B) 840,000
C) 9,700,000
D) 8,000,000

Solutions: