WorldatWork CECP Certified Executive Compensation Professional Exam Exam Practice Test Questions

• Question 1

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

  • The most senior leader with the highest level of authority
    
  • No one person. Identify your stakeholders and work to achieve consensus among the majority.
    
  • Influencers and decision-makers who have the respect of employees and are both proponents and opponents of your objectives
    
  • Individuals with power in the organization who have the authority to overrule the concerns of opponents
    

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• Question 2

  Your company has had a strong fiscal year with a 15% increase in net income over the prior fiscal year. Share prices are at an all time high. Working with Finance, you have arrived at a 2.5% merit increase budget for the next fiscal year, a smaller increase than the last fiscal year. Finance has indicated that some large capital expenditures will be needed next year, so the company needs to conserve resources. Additionally, Legal is in final negotiations on a lawsuit that may be very costly to the company. Word of the smaller increases has line management concerned that they will lose their best performers. Given all of these factors, what is your best course of action?

  • Implement the merit increase budget as is because the anticipated financial obligations have made it necessary
    
  • Meet with Finance and make a case for a larger merit increase budget because the loss of key talent will cost more over the long term than the savings from the smaller merit increases
    
  • Gather the perspectives of all stakeholders, analyze their individual concerns and meet to determine whether a compromise solution is possible
    
  • Recommend a reduction in force to eliminate poor performers, which will increase the merit budget by reducing headcount
    

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• Question 3

  What best describes the compensation philosophy?

  • 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
    

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• Question 4

  How is the purpose of a non-profit organization typically communicated?

  • Explained throughout the mission, vision, values and strategy
    
  • Implied in the mission, vision and strategy and specifically explained on the organization's website
    
  • Reflected in the mission, vision, values and strategy although often not stated directly
    
  • Documented internally but not released to the public to protect trade secrets and maintain competitive advantage
    

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• Question 5

  What best describes what forecasting helps the organization to do?

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

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