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WorldatWork Regulatory Environments for Compensation Programs Sample Questions:

1. Which of the following best describes the most likely perspectives of different groups in the organization that compensation professionals must be aware of?

A) 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.
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) 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.

2. Regarding compensation communications with executives, where do they tend to need the greatest level of understanding?

A) In the overall program objectives
B) In the differences in pay levels for the different levels of the organization
C) In the methods and processes used to make pay decisions
D) In the details of their individual compensation packages

3. When connecting with other business units, what best describes a reason why is it important to keep up to date on organizational challenges?

A) Because you will be able to explain the negative consequences of opposing your position
B) Because you will be more informed when differences of opinion occur, lending more credibility to your position
C) Because you can demonstrate your understanding of issues from multiple perspectives
D) Because stakeholders with diverse opinions tend to compromise when they are aware that others know their weaknesses

4. Which of the following are the two primary elements of benefits?

A) Unemployment and disability
B) Defined contribution and defined benefits plans
C) Pay for time not worked and income protection programs
D) Mental health coverage and health care coverage

5. Which of the following best describes present value?

A) The current value of holdings
B) The difference between the desired value in the future and the current value as a percentage of the desired value
C) The desired value in the future and what needs to be invested today to realize that amount
D) The current value of holdings and how much it will grow over time at a given rate of return

Solutions: