WorldatWork CECP Certified Executive Compensation Professional Exam Practice Test

To differentiate company financial data from industry competitors to prevent loss of proprietary information

To provide subjective information to key constituents that reflects the company’s performance in the most favorable manner depending on stakeholder priorities

To create a historical record of financial performance and identify trends that may justify changes in strategy

To promote consistency of communication regarding company performance and value

The compensation committee’s interpretation of how employees can best meet business objectives

Guidelines that determine the administration of compensation programs

Statement of what the organization believes about how people should be paid

Principles that guide the design of compensation programs

Because the internal and external environments are constantly changing

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

Because they are emotional issues and stakeholders have many vested interests

Because strong business executive is required for all compensation decisions

The corporate mission

The business strategy

The compensation strategy

The corporate vision   

Audit fees

Rent

Maintenance

Shipping

Recognition

Bonus

Commission

Profit-sharing

Pay for time not worked

Hourly pay

Bonuses

Piece rate   

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

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

A company’s mean capital expenditure per employee

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

To achieve organizational cost savings through base pay reductions

To increase employee identification with the organization's success

To defer compensation expenses to future reporting periods

To reward individual employees for some significant contribution   

Financial Management

HR Management

Resource Management

Policy Management

It isn't. The performance review should not be related to pay decisions.

It is related to the extent that it affects variable pay awards. Base pay is based solely on tenure, prior experience and job skills.

It helps managers meet salary budgets by allowing them to adjust review results to align with available salary increase funds.

It provides managers a measure that can be used along with salary planning guidelines to determine appropriate rewards or consequences.   

Start-up

Growth

Mature

Decline

The employee

A concerned co-worker

The employee’s manager

The employee’s department head

Financial Management

HR Management

Resource Management

Policy Management

To control annual fixed costs from base pay adjustments

To elevate employees who are below the midpoint in the range

To reward employees under short-term incentive plans

To make up for benefits not provided by the organization