GR6 VARIABLE PAY C12-ACTUAL CERTIFICATION EXAM-LATEST
UPDATE 2025 | COMPLETE QUESTIONS WITH CORRECT DETAILED
AND VERIFIED ANSWERS-RATED 100% CORRECT!!ALREADY
GRADED A+ | GUARANTEED PASS!!
What are the three categories of variable pay –
(answers)1-Incentives
2-Bonuses
3-recognition
What are the main characteristics of Incentives - (answers)1-Criteria determined in advance
2-Amount of pay can vary
3-Monetary or non-monetary
4-Self-funded or budgeted
5-Non-discretionary
What are the main characteristics of Bonuses - (answers)1-Task completion
2-Amount determined in advance
3-Monetary
4-Budgeted
5-Non-discretionary
What are the main characteristics of Recognition - (answers)1-Criteria broadly defined and
subjective
2-Awarded spontaneously
3-Decision after the fact
4-Focused on behaviors
5-Monetary or non-monetary
6-Budgeted
,7-Discretionary
What are short-term incentive plans - (answers)1-Profit Sharing
2-Performance Sharing
3-Individual performance based
What are the main characteristics of Profit sharing plans - (answers)Share profits with
employees, base rewards on financial performance, typically include entire organization and
payout is equal or graduated amounts
What are the objectives of profit sharing plans - (answers)Foster employee identification with the
organization's success and create a common focus
What are the considerations of profit sharing plans - (answers)Promote awareness / focus, pay
out only when company has a profit, employee ability to influence overall profits, ease of
administration
What are the main characteristics of Performance sharing plans - (answers)Define performance
by select criteria, focus on more than financial results, exists at all organizational levels, measure
performance based on predetermined objectives and are defined for a specific period
What are the objectives of a performance sharing plan - (answers)1-Improve organization's
performance
2-Foster employee identification with the organization's success
3-Increase employee understanding
4-Promote a more balanced approach
What are the considerations for a performance sharing plan - (answers)1-Promote awareness /
focus
2-Self-funding
3-Employee ability to influence overall performance
,4-Flexibility of design
5-May increase administrative requirements
What are the main characteristics of individual performance based plans - (answers)Based
payouts on individual performance and focus on more than financial results
What are the objectives of an individual performance based plan - (answers)Focus on personal
performance improvement, increase employee understanding and link rewards with personal
performance
What are three types of individual performance based plan approaches - (answers)Performance
against predetermined objectives (MBO), Output-based and commissions
Define Performance against predetermined objectives (MBO) - (answers)Rewards are earned for
the accomplishment of predetermined goals and objectives set for the individual
Define Output based individual performance plan - (answers)Rewards are earned based on a
predetermined amount for each unit (piece-rate plan) - used when scope is narrow, produce
output in a repetitive fashion and individual has some control over output
Define a Commission based individual performance plan - (answers)A predetermined incentive
amount for each discrete unit of sales. Designed to reward individual effort and drive results,
create singular focus on sales volume and motivate the sales success by tying the incentive
directly to sales results
What are the considerations for Individual performance based plans - (answers)1-Reinforcement
of performance culture
2-Narrow vision
3-wide variations in pay
4-High levels of administration
, What are some approaches of profit sharing plans - (answers)First-return plans, Threshold plans,
Operating Budget Plans and Peer company comparisons
What are the two categories of Long-Term Incentive Plans - (answers)Equity based and Non-
equity based
What are the main characteristics of Long Term Equity Based Plans - (answers)Create Equity
interest, based on stock performance and paid out using stock or cash
What are the main objectives of Long Term Equity Based Plans - (answers)1-Align employees
with shareholders
2-Conserve cash
3-Create employee wealth
4-Increase retention
What are two types of Appreciation only Equity Based plans - (answers)1-Stock Options:
employees get the right to buy company shares at a specific price at a specific time in the future.
2- Stock Appreciation Rights (SARS): grants employees a right to a monetary amount equal to
the future appreciation of its stock. Similar to stock options, however, no stock is used.
What are three types of Total Value Equity Based Plans - (answers)1- Stock Grant: plans that
provide stock to employees without any cost to the employee
2- Restricted Stock: stock grants that are contingent on remaining with the company until a
specific time. May not be sold until restriction period lapses
3- Performance Shares: shares awarded contingent on the achievement of certain predetermined
performance goals
What are the considerations for Equity Based Plans - (answers)1- Align employee / shareholder
interests
2- Retention
3- Stock performance may not reflect employee performance
UPDATE 2025 | COMPLETE QUESTIONS WITH CORRECT DETAILED
AND VERIFIED ANSWERS-RATED 100% CORRECT!!ALREADY
GRADED A+ | GUARANTEED PASS!!
What are the three categories of variable pay –
(answers)1-Incentives
2-Bonuses
3-recognition
What are the main characteristics of Incentives - (answers)1-Criteria determined in advance
2-Amount of pay can vary
3-Monetary or non-monetary
4-Self-funded or budgeted
5-Non-discretionary
What are the main characteristics of Bonuses - (answers)1-Task completion
2-Amount determined in advance
3-Monetary
4-Budgeted
5-Non-discretionary
What are the main characteristics of Recognition - (answers)1-Criteria broadly defined and
subjective
2-Awarded spontaneously
3-Decision after the fact
4-Focused on behaviors
5-Monetary or non-monetary
6-Budgeted
,7-Discretionary
What are short-term incentive plans - (answers)1-Profit Sharing
2-Performance Sharing
3-Individual performance based
What are the main characteristics of Profit sharing plans - (answers)Share profits with
employees, base rewards on financial performance, typically include entire organization and
payout is equal or graduated amounts
What are the objectives of profit sharing plans - (answers)Foster employee identification with the
organization's success and create a common focus
What are the considerations of profit sharing plans - (answers)Promote awareness / focus, pay
out only when company has a profit, employee ability to influence overall profits, ease of
administration
What are the main characteristics of Performance sharing plans - (answers)Define performance
by select criteria, focus on more than financial results, exists at all organizational levels, measure
performance based on predetermined objectives and are defined for a specific period
What are the objectives of a performance sharing plan - (answers)1-Improve organization's
performance
2-Foster employee identification with the organization's success
3-Increase employee understanding
4-Promote a more balanced approach
What are the considerations for a performance sharing plan - (answers)1-Promote awareness /
focus
2-Self-funding
3-Employee ability to influence overall performance
,4-Flexibility of design
5-May increase administrative requirements
What are the main characteristics of individual performance based plans - (answers)Based
payouts on individual performance and focus on more than financial results
What are the objectives of an individual performance based plan - (answers)Focus on personal
performance improvement, increase employee understanding and link rewards with personal
performance
What are three types of individual performance based plan approaches - (answers)Performance
against predetermined objectives (MBO), Output-based and commissions
Define Performance against predetermined objectives (MBO) - (answers)Rewards are earned for
the accomplishment of predetermined goals and objectives set for the individual
Define Output based individual performance plan - (answers)Rewards are earned based on a
predetermined amount for each unit (piece-rate plan) - used when scope is narrow, produce
output in a repetitive fashion and individual has some control over output
Define a Commission based individual performance plan - (answers)A predetermined incentive
amount for each discrete unit of sales. Designed to reward individual effort and drive results,
create singular focus on sales volume and motivate the sales success by tying the incentive
directly to sales results
What are the considerations for Individual performance based plans - (answers)1-Reinforcement
of performance culture
2-Narrow vision
3-wide variations in pay
4-High levels of administration
, What are some approaches of profit sharing plans - (answers)First-return plans, Threshold plans,
Operating Budget Plans and Peer company comparisons
What are the two categories of Long-Term Incentive Plans - (answers)Equity based and Non-
equity based
What are the main characteristics of Long Term Equity Based Plans - (answers)Create Equity
interest, based on stock performance and paid out using stock or cash
What are the main objectives of Long Term Equity Based Plans - (answers)1-Align employees
with shareholders
2-Conserve cash
3-Create employee wealth
4-Increase retention
What are two types of Appreciation only Equity Based plans - (answers)1-Stock Options:
employees get the right to buy company shares at a specific price at a specific time in the future.
2- Stock Appreciation Rights (SARS): grants employees a right to a monetary amount equal to
the future appreciation of its stock. Similar to stock options, however, no stock is used.
What are three types of Total Value Equity Based Plans - (answers)1- Stock Grant: plans that
provide stock to employees without any cost to the employee
2- Restricted Stock: stock grants that are contingent on remaining with the company until a
specific time. May not be sold until restriction period lapses
3- Performance Shares: shares awarded contingent on the achievement of certain predetermined
performance goals
What are the considerations for Equity Based Plans - (answers)1- Align employee / shareholder
interests
2- Retention
3- Stock performance may not reflect employee performance
