Worldatwork cecp practice test

Question 1

Step-rate increase programs provide employees the opportunity to receive two regular pay increases
at which points?
A. At established dates and then every six months thereafter
B. On January 1 and July 1 of each year
C. Once when they move a step, and again when the step value changes
D. At the anniversary date and at the annual merit increase date

Question 2

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 3

Which type of variable pay is best described by this statement: Criteria are discretionary and often
defined in broad terms such as exceptional customer service?

• A. Recognition
• B. Bonus
• C. Commission
• D. Profit-sharing

Question 4

How is the performance review related to pay?

• A. It isn't. The performance review should not be related to pay decisions.
• B. It is related to the extent that it affects variable pay awards. Base pay is based solely on tenure, prior experience and job skills.
• C. It helps managers meet salary budgets by allowing them to adjust review results to align with available salary increase funds.
• D. It provides managers a measure that can be used along with salary planning guidelines to determine appropriate rewards or consequences.

Question 5

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

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

Question 6

What type of equity incentive gives employees the right to purchase company shares at a specified
price?

• A. Stock/share options
• B. Stock/share grants
• C. Restricted stock/shares
• D. Performance units   

Question 7

What is a primary objective of profit-sharing and performance-sharing variable pay plans?

• A. To achieve organizational cost savings through base pay reductions
• B. To increase employee identification with the organization's success
• C. To defer compensation expenses to future reporting periods
• D. To reward individual employees for some significant contribution   

Question 8

How do commissions typically differ from annual incentives for non-executive employees?

• A. They are based on a predetermined performance and reward schedule.
• B. They are offered to motivate employee performance.
• C. They are intended to align the interests of the employee with those of the organization.
• D. They tend to make up the larger portion of an employee's total compensation.   

Question 9

Which of the following is a type of variable pay?

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

Question 10

Which of the following is a type of variable pay?

• A. Salary
• B. Piece rate
• C. Hourly rate
• D. Commissions