MODULE 1--Introduction to Business Acumen

Question 1

What are the Key Compentencies for Compensation Professionals

Answer 1

• Understanding HR
• Mastering Resource Management
• Understanding Finance

Question 2

What does Understanding HR Entail?

Answer 2

• Assesses current and future staffing needs based on organizational goals and budget realities
• Ensures staff are appropriately selected, developed, appraised and rewarded
• Takes corrective action
• Understands basic organization design principles

Question 3

What does Mastering Resource Management Mean?

Answer 3

• Determines, sources and collects appropriate data to facilitate fact-based decisions
• Effectively partners with internal staff and external consultants or vendors
• Uses efficient and cost-effective approaches to integrate technology into the workplace and improve program efficacy

Question 4

What does Understanding Finance Mean?

Answer 4

• Demonstrates broad understanding of principles of financial management and business expertise necessary to ensure appropriate funding levels
• Understands ROI of programs and initiatives
• Prepares, justifies and/or administers the budget for the program area
• Uses cost-benefit thinking to set priorities
• Monitors expenditures in support of programs and policies
• Identifies cost-effective approaches
• Manages procurement and contracting
• Assesses performance plans based on stated objectives

Question 5

What are Business Acumen Skills and Behaviors

Answer 5

• Understanding the purpose your organization serves, how it creates value, and how it makes money
• Understanding business strategy through customers, competition and competitive advantage
• Understanding the culture and subcultures of your organization
• Ability to speak about your area of expertise and collaborate with colleagues from other business units

Question 6

What is the Importance of Business Acumen?

Answer 6

• Contributions to organizational success
• Engaging with Executive Leadership
• Self Improvement and Career Development

Question 7

What can the compensation professional with business acumen can:

Answer 7

• Demonstrate strong influencing and negotiation skills in order to navigate the approval process with stakeholders who have conflicting requirements. Be prepared to develop and facilitate agreement for the rewards philosophy, principles, strategies and programs.
• Focus on data and be an expert on the numbers. Compensation and rewards are emotional issues within organizations and stakeholders have many vested interests. Representing the
  compensation point of view with data and relating that compensation to business results helps other leaders look at facts as they relate to the organization’s bottom line.
• Understand and navigate regulatory challenges in the application of rewards programs globally. The compensation professional has a fiduciary responsibility to their organization to ensure that the financial resources of their organization are spent in a prudent manner.

Question 8

2. Which of the following best describes an employee with strong business acumen?
   A. Task-oriented, cautious, perfectionist
   B. Extroverted, impulsive, intelligent
   C. Inquisitive, insightful, confident
   D. Timid, ignorant, well-intentioned

Answer 8

C. Inquisitive, insightful, confident

Question 8

1. Which of the following is a compensation competency for financial management?
   A. Manages procurement and contracting
   B. Assesses current and future staffing needs
   C. Sources appropriate data for fact-based decision making
   D. Effectively partners with colleague

Answer 8

A. Manages procurement and contracting

Question 9

3. How can the compensation professional address emotional reactions from stakeholders?
   A. Describe how the compensation plan is in alignment with the organizational culture.
   B. Present the negotiation strategy to explain how the plan was developed.
   C. Offer reassurance that the plan is in the employee’s best interest.
   D. Focus on the data and its impact on the bottom line.

Answer 9

D. Focus on the data and its impact on the bottom line.

Question 10

4. How might business acumen lead to career development?
   A. Develop confidence and decisiveness in compensation plan design.
   B. Interact successfully with other business functions for a lateral career move.
   C. Become an expert in the overall business strategy to gain an audience with executive leadership.
   D. Influence others to support the compensation perspective.

Answer 10

A. Develop confidence and decisiveness in compensation plan design.