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CECP Questions and Answers

Question # 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.

Question # 2

The XYZ Company produces innovative products and brings them to market in advance of their competitors. What strategy is XYZ using?

A.

Operational excellence

B.

Product/service leadership

C.

Customer intimacy

D.

Brand loyalty

Question # 3

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 and variable costs are equally important and both should be kept to a minimum.

D.

Fixed costs are not a concern because they cannot be changed, so the focus is primarily on variable costs.

Question # 4

Why are lump-sum increases generally used?

A.

To control annual fixed costs from base pay adjustments

B.

To elevate employees who are below the midpoint in the range

C.

To reward employees under short-term incentive plans

D.

To make up for benefits not provided by the organization   

Question # 5

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 more informed when differences of opinion occur, lending more credibility to your position

B.

Because you can demonstrate your understanding of issues from multiple perspectives

C.

Because you will be able to explain the negative consequences of opposing your position

D.

Because stakeholders with diverse opinions tend to compromise when they are aware that others know their weaknesses

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