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WorldatWork C8 Exam
Business Acumen for Compensation Professional (Page 4 )

Updated On: 7-Feb-2026
Page 3 of 17
PDF with 78 Questions

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?

  1. Implement the merit increase budget as is because the anticipated financial obligations have made it necessary
  2. 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
  3. Gather the perspectives of all stakeholders, analyze their individual concerns and meet to determine whether a compromise solution is possible
  4. Recommend a reduction in force to eliminate poor performers, which will increase the merit budget by reducing headcount

Answer(s): C



Regarding fixed and variable costs, what tends to happen as revenue increases?

  1. Variable costs decrease
  2. Fixed costs decrease
  3. Variable costs increase and consume a higher percent of revenue
  4. Fixed costs remain the same and consume a lower percent of revenue

Answer(s): D



What best describes a key competency of compensation professionals regarding HR management of the organization’s employees?

  1. Ensuring they are appropriately selected, developed, appraised and rewarded
  2. Monitoring individual employee career paths and succession planning
  3. Communicating regularly with line management on performance management
  4. Ensuring that all regulatory and voluntary payroll deductions are properly administered

Answer(s): A



What is the most accurate definition of organizational vision?

  1. A description of who the organization is, where it is headed and what it wants for the future
  2. A written explanation of the intention or purpose of the organization and why it is in business
  3. A statement of what kind of organization it wants to be and the guiding principles and/or beliefs shared by stakeholders
  4. A detailed account of the organization’s goals, directions to achieve them and how it will compete

Answer(s): A



Who are you most likely to hear from if there are questions about an employee’s compensation?

  1. The employee
  2. A concerned co-worker
  3. The employee’s manager
  4. The employee’s department head

Answer(s): C






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