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WorldatWork Regulatory Environments for Compensation Programs Sample Questions:

1. What statement is most accurate regarding communication of compensation information?

A) Compensation professionals should anticipate the level of the audience and tailor messages to their needs.
B) Compensation terms and practices are unclear to most individuals who do not work in this area and communication should be tailored to the least informed member of the target audience.
C) The ready availability of information online has made it unnecessary for compensation professionals to tailor messages since individuals can research terms and concepts after the fact if they don't understand a communication.
D) Compensation terms are well-known and easily understood by most stakeholders.

2. Which of the following benefits are usually offered at the discretion of the employer?

A) Unemployment insurance
B) Social security programs
C) Disability (occupational)
D) Retirement plans

3. Which of the following is a type of variable pay?

A) Piece rate
B) Pay for time not worked
C) Hourly pay
D) Bonuses

4. 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) 9,700,000
B) 840,000
C) 8,000,000
D) 500,000

5. The Delta Company has experienced increased turnover in the past two years. Data from exit interviews indicate that most of those leaving did so for better opportunities and higher compensation. If Delta pays at the highest percentile of the market for their peer group, what data analysis should they do?

A) Qualitative data collection in the form of an employee survey with questions about employee satisfaction with pay levels
B) No additional data analysis is needed. Delta should increase pay rates based on the existing data to decrease turnover.
C) Qualitative data collection to talk to key stakeholders and employees and determine whether the exit interviews accurately reflect their concerns
D) Additional quantitative analysis to determine whether pay rates are truly competitive or existing data are unreliable

Solutions: