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WorldatWork Regulatory Environments for Compensation Programs Sample Questions:

1. If a company has a higher percentage of employees with fixed compensation than variable compensation, what happens as revenues increase?

A) Compensation costs remain the same as a percent of revenue until variable compensation costs exceed fixed compensation costs.
B) Compensation costs and revenue increase at approximately the same rate.
C) Compensation costs eventually stabilize and become a consistent percent of revenue.
D) Compensation costs eventually decrease as a percent of revenue, increasing profit growth.

2. 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) Additional quantitative analysis to determine whether pay rates are truly competitive or existing data are unreliable
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) Qualitative data collection in the form of an employee survey with questions about employee satisfaction with pay levels

3. The concept of bona fide occupational qualifications has most direct relevance to which of the following components of employee compensation programs?

A) Job descriptions
B) Salary surveys
C) Job specifications
D) Performance evaluations

4. Which of the following is an example of a reasonable accommodation?

A) Creating a new position in the company
B) Providing a pre-employment medical exam
C) Creating a separate area for the disabled employee to work
D) Job restructuring

5. Which of the following is the best example of applying business acumen to data analysis?

A) Compiling data needed to calculate salary budgets and merit increases
B) Identifying trends and key messages emerging over time
C) Providing quarterly incentive estimates for accruals
D) Reviewing historical trends to complete annual budgets

Solutions: