C8 Business Acumen for Compensation Professional Question and Answers

Compensation budgets only because staffing cannot exceed the funds available

A combination of organizational goals and budget realities

The consensus of HR management and line management estimates

The opinions of senior leaders in the organization

A Star

A Question Mark

A Market Leader

A Cash Cow

What direction will we take?

How do we work?

Why are we in business?

How will we achieve our objectives?

Compiling data needed to calculate salary budgets and merit increases

Identifying trends and key messages emerging over time

Reviewing historical trends to complete annual budgets

Providing quarterly incentive estimates for accruals

The cumulative information on the four quarterly reports adds up to the information on the annual report.

The quarterly reports are more detailed. The annual report provides similar data in summary form.

The annual report is required and the quarterly reports, while commonly used, are optional.

The quarterly reports are not as detailed as annual reports, and might not match due to changing accounting estimates over the year.

Business forecasting

Business analytics

Predictive modeling

Statistical analysis

They typically have the greatest effect on net income and operating results of any organizational expense or program

Their success or failure is closely tied to the success or failure of organizationwide goals and objectives

They have very little effect as long as they are managed effectively and efficiently

They affect the organization’s overall financial status and impact multiple stakeholders across most, if not all, business units

Reduce compensation expense

Improve program efficacy

Select the best vendors

Compensate employees competitively