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Worldatwork CECP Exam - Topic 1 Question 6 Discussion

If a company has a higher percentage of employees with fixed compensation than variable compensation, what happens as revenues increase?
C) Compensation costs eventually decrease as a percent of revenue, increasing profit growth.
A) Compensation costs eventually stabilize and become a consistent percent of revenue.
B) Compensation costs and revenue increase at approximately the same rate.
D) Compensation costs remain the same as a percent of revenue until variable compensation costs exceed fixed compensation costs.

Worldatwork CECP Exam - Topic 1 Question 6 Discussion

Actual exam question for Worldatwork's CECP exam
Question #: 6
Topic #: 1
[All CECP Questions]

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

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Suggested Answer: C

by Xuan at May 05, 2022, 10:34 PM

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Xochitl
7 months ago
I thought variable comp would change things more.
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Taryn
7 months ago
B seems plausible too, but A is more likely.
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Reita
8 months ago
Wait, can fixed costs really stay consistent with rising revenue?
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Sunshine
8 months ago
Totally agree, A makes the most sense here!
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Viki
8 months ago
A higher fixed comp means costs stabilize as revenue grows.
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Johnetta
8 months ago
I think option D makes sense because fixed costs don’t change with revenue, but I’m unsure if they really stay the same until variable costs take over.
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Florencia
8 months ago
I’m a bit confused about whether compensation costs would actually decrease as a percentage of revenue. That seems counterintuitive.
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Derick
8 months ago
This question feels familiar; I think it relates to how variable compensation can impact profit margins as revenue grows.
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Brock
8 months ago
I remember studying how fixed compensation can lead to stable costs, but I'm not sure if that means they stabilize as a percentage of revenue.
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Arlie
9 months ago
Ugh, I'm a bit confused by this one. The wording is a bit tricky, and I'm not entirely sure about the syntax for Blue Prism expressions. I'll need to review my notes and try to figure this out.
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Angella
9 months ago
I think I remember the term "Turing-complete" being used a lot in our discussions about smart contracts. Isn't that what the Ethereum Virtual Machine is?
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Fairy
9 months ago
Okay, I think I've got a handle on this. The key is to identify the business process steps that don't fit the criteria for service encapsulation, like manual steps or those tied to specific business entities.
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Luz
9 months ago
This looks like a process improvement scenario. I'm leaning towards C, but I want to make sure I'm not rushing my decision.
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