phr shrm preparation book

PHR SHRM Preparation Book

SPHR Preparation Book

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(i) That the Society For Human Resource Management is the exclusive copyright owner of the Materials.

(ii) Provided that the required fee for use of the Materials by User has been paid to SHRM or its agent, User has the right, by this License, to use the Materials solely for his/her own educational use.

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SOCIETY FOR H U M A N RESOURCE MANAGEMENT

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SPHR PREPARATION BOOK

Contents |s \

Introduction 1 SPHR Question Formats 2 SPHR Practice Test Questions 6

Printed on 30% post-consumer waste recycled paper.

Acknowledgments SHRM acknowledges the contributions of its volunteer leaders and staff members who have served as subject matter experts for the 2011 Learning System.

Module subject matter experts Wendy Bliss, J.D., SPHR Principal, Bliss & Associates Colorado Springs, Colorado

Deborah Keary, SPHR Human Resources Director,

Society for Human Resource Management

Alexandria, Virginia

Jennifer Loftus, SPHR-CA, GPHR, CCP, CBP, GRP

National Director, Astron Solutions New York, New York

Lynn C. Outwater, J.D., SPHR Managing Partner, Jackson Lewis LLP Pittsburgh, Pennsylvania

Gayle Porter, PhD, SPHR, GPHR Professor of Management Rutgers, The State University School of Business Camden, New Jersey

Nancy Voipe, SPHR, GPHR Chief People Officer Center for People Solutions LLC Grandville, Michigan

For past contributions Cornelia Gamlem, SPHR President, GEMS Group Ltd. Herndon, Virginia

Gary Kushner, SPHR, CBP President and CEO, Kushner

and Company Portage, Michigan

Michael Losey, SPHR, CAE President and CEO, Society for

Human Resource Management (retired)

President, MikeLosey.com Fleming Island, Florida

Dr. Fraya Wagner-Marsh, SPHR, GPHR

Department Head, Department of Management, Eastern Michigan University

Ypsilanti, Michigan

For test question contributions: Brenda Jimenez, SPHR Senior Consultant—

Diversity Verizon Communications Basking Ridge, New Jersey

Gena Jones, DM, SPHR Assistant Vice President for Human

Resources Texas Tech University Health

Sciences Center Lubbock, Texas

Randy McCamey, PhD, SPHR Associate Professor of Management

and Human Resources Tarleton State University Stephenville, Texas

For legal compliance: Jonathan A. Segal Partner, Duane Morris LLP Philadelphia, Pennsylvania

Linda B. Hollinshead Partner, Duane Morris LLP Philadelphia, Pennsylvania


SPHR PREPARATION BOOK . .

Introduction

Congratulations on your decision to sit for certification. Certification is a mark of distinction that sets you apart from other human resource professionals and signifies your commitment to your profession. It shows your organization and the HR community that you place a high value on learning and professional growth. Since certification represents your individual accomplishments, it serves as an impartial endorsement of your knowledge and experience.

This SPHR Preparation Book is designed to lessen your test anxiety and provide you with the additional practice you may need if you are sitting for the SPHR exam. If you are not taking the SPHR exam, you will still benefit from the information presented here.

The rest of this SPHR Preparation Book contains these key sections: • SPHR Question Formats • SPHR Practice Test Questions

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SPHR PREPARATION BOOK . . " -i ** i ^ __

SPHR Question Formats w d si?-,; Sis'

The test questions are all multiple-choice, although you can expect to see more complex questions on the SPHR exam. In the exam, you may encounter some of the following formats.

Questions That Assume Knowledge of Key Terms You may see questions that hinge on your knowledge of key terms. However, in the question itself, the term may never be used.

Sample question All candidates for manufacturing jobs are expected to lift 80 pounds. However, none of the items that require lifting weighs more than 50 pounds. A woman applies for a job and is not hired because of the limit. She learns from a friend at the company that the requirements are inflated. Is this action discriminatory? A. No, the company may set its requirements as it wishes. B. No, as long as the job description matches the essential requirements

of the job. C. Yes, the inflated lifting requirement may eliminate members of a

protected class. D. Yes, the company must lower its standards for members of a

protected class.

C is the correct answer. This question does not mention adverse or disparate impact, but this is the concept that is being tested. By inflating its requirements, the company may unknowingly be guilty of discriminating against protected classes (such as women) with limited lifting capability.

Questions That Require HR Knowledge and Experience Many questions require a combination of knowledge and experience to identify the best answer, as in the sample below.

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Sample question A female employee is approached by a male employee who grabs her buttock. She pushes him away and yells at him to stop. The next day he teases her about the incident. The employee reports both incidents to HR at the end of the day. The first step that the HR manager should take is to A. suspend the male employee. B. begin an investigation. C. transfer the female employee to another department. D. allow the female employee to take a few days off.

In this case, all of the answers may be plausible. However, B is the correct answer. The first thing the HR manager should do is to begin the investigation. The courts are in agreement that taking prompt remedial action can shield an employer from liability when the harassing conduct is committed by a coworker. It may be tempting to jump directly to disciplinary action (distractor A), but no disciplinary action is appropriate until an investigation is completed.

Series of Questions Written Against a Single Scenario Another question format seen more frequently on the SPHR exam is several questions written against a single scenario.

Use the following information to answer questions I and 2.

A company orders relationship management software that allows customer service representatives to enter orders, generate shipping tickets, and view information entered by the account managers. The software will speed the ordering process, but it is complex and difficult to learn. The company provides a week-long training session for customer service representatives and plans to evaluate its effectiveness one month after the training.

Question 1 What learning curve would you expect to see? A. Increasing returns B. Decreasing returns C. Plateau D. S-shaped

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The correct answer is A. The increasing returns pattern is most common when a person is learning something completely new. The beginning of the curve is slow while the basics are being learned. Then performance takes off as skills and knowledge are acquired.

Question 2 Which of the following will BEST determine the effectiveness of the training? A. Asking participants to complete a survey on their training experience B. Testing participants on the features of the software C. Tracking the number of orders processed per day before and after the training D. Observing the attitude of the participants toward the new software

The correct answer is C. Tracking the number of orders processed per day will allow the company to determine if the training has produced the desired result of speeding the ordering process. The company can compare the time per order before and after the installation of the new software.

Questions That Cross More Than One Functional Area There are also questions that require you to use knowledge presented in more than one module. For example, the following scenario draws on content related to compensation and benefits and employee and labor relations.

Use the following information to answer questions 1 and 2.

An employee is terminated due to the loss of several large company contracts. The employee has been a good performer, but the company must immediately reduce its workforce. The employee has health insurance and a 401(k) plan with the company.

Question 1 How can the company BEST minimize the risk that the employee will file a lawsuit? A. Provide the employee with outplacement assistance. B. Let the employee know that rehiring is a possibility if work conditions improve. C. Provide severance and have the employee sign a release. D. Recognize the employee's past achievements and sympathize with the

employee.

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In this case, several of the answers may be plausible and appropriate. However, C is the best answer because the severance agreement usually contains a clause that states that the employee accepts payment and releases the company from liability. Although this is not a guarantee that the employee will not sue, it is a strong defense.

Question 2 How long may the employee continue to be covered under the company's health insurance plan? A. 18 months B. 24 months C. 39 months D. Indefinitely

The correct answer is A. According to COBRA, employees who are laid off may continue health insurance coverage for 18 months at their own expense.

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SPHR Practice Test Questions

The questions on the following pages will give you a chance to further refine your test-staking skills. Whether or not you are sitting for the SPHR exam, be sure to complete these questions.

The answers for the questions are provided at the end of this section, starting on page 42. Rationales for the correct answers are also provided, so the questions serve not only as a testing practice but as a teaching aid.

These questions may not directly relate to the text in the SHRM Learning System. Many of the questions are based on real-world scenarios and require you to apply the concepts that you have studied. You may be asked to select the "best" option or the "most likely' result. A good way to approach such a question is to assume that you are a consultant. Given the situation described, draw on your knowledge and experience and base your answer on what you would recommend.

S3H

.; , Be Sure that you take advantage of all the test questions in the Learning System software. ^Complete the pre-test, module review tests, practice exams, -and post-tests for "both the PHR and SPHR levels. This -will give you the opportunity to take 1,040 additional questions—the equivalent of more than four certification exams.

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Practice Test Questions

Module 1: Strategic Business Management

Use the following information to answer questions 1 through 3.

A company's premier product is facing competition from a number of low-priced competitors entering the marketplace. While the company has a strong brand image and a reputation for quality, their sales are declining. They are considering whether they should introduce new products to meet competitors' actions.

1. What is the company's BEST option for remaining competitive? A. Reduce the price of the product and compete with the new competitors on price. B. Reformulate the product and compete by highlighting the value of their product. C. Develop a low-priced product that can compete at the lower price point. D. Sell the same product but market it to customers who are not price-conscious.

2. The company conducts additional market research and determines that it must create new product packaging and a new marketing campaign. The MOST important role that HR can play is to A. determine the number of new employees that must be hired to reformulate the

product. B. contribute to the product development and communication plan. C. research the competitive products in the marketplace. D. hire new employees as they are needed in the production process.

3. The new product is successful in the marketplace; however, the company's competitors take note of the new product and begin to incorporate similar features into their products. The biggest challenge for the company now is to A. retain the employees who accomplished the turnaround. B. recruit new employees who can bring a fresh perspective to the product. C. reevaluate production processes and cut costs. D. determine the direction the product will take in the future.

4. An organization's senior management team meets to discuss the impact of spinning off a profitable vertical market into a stand-alone business unit. An agenda is sent in advance of the meeting so the team will be able to prepare for it. What is the most important information that HR should bring to the meeting? A. Sales and revenue projections for the new unit B. Analysis of pros and cons of the new unit C. Organization chart for the new unit D. Staffing analysis for the new unit

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5. Because of increasing health-care costs, a benefits committee has been asked to explore changes to the organization's health insurance plan. The group plans to entertain bids from several health-care providers and determine how costs can be better controlled. However, the committee has already determined that employees will either need to pay a greater share of their insurance costs or face higher deductibles and copayments. Based on this preliminary report, HR should recommend that the committee A. inform employees that insurance costs will increase. B. conduct focus groups to elicit employee opinions. C. hire a benefits expert to assist the organization. D. request that the CFO review their work.


An organization decides to hire a contractor to develop a custom leadership program for its senior managers. A multidepartment team is in agreement on the need that the program will fill and has established goals, topics, and time frames for the program.

6. The next step in the process is for the team to A. attend several leadership development classes to determine what is currently available

in the marketplace. B. create an RFP and send it to potential contractors. C. benchmark its proposed program against those of its competitors. D. poll potential program attendees to see if they would attend the program.

7. The team selects a contractor and must present its decision to the senior HR manager for budget approval. The manager will want to know if the program is cost-effective. The team can BEST make its case by A. comparing the cost per trainee of this program to that of other programs in the

company. B. developing a charge-back plan that shares costs with participating departments. C. showing how the anticipated costs are offset by the expected benefits. D. comparing the contractor's price to the cost of developing the training internally.


An HR manager decides to test the theory that a decline in the training of account managers is directly related to a decline in subsequent sales revenues.

8. The BEST way to test this theory is to A. interview salespeople and determine the reasons for declining sales. B. survey account managers about the importance of training. C. track the correlation between training and revenues. D. identify external events that have an impact on sales revenues.

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9. Which of the following techniques will be MOST valuable in helping the HR manager visualize the correlation between training and revenues? A. Cause-and-effect diagram B. Scatter diagram C. Control chart D. Bell curve

10. In the visual below, what is the relationship between training and revenues?

Amount of Training in Hours

A. As training increases, revenues increase. B. As training increases, sales decrease. C. There is no relationship between revenues and training. D. It is impossible to draw a conclusion.

11. By defining its organizational values, an organization A. avoids ethical complications. B. will be in compliance with employment laws. C. demonstrates what employees must do to succeed in the company. D. provides a guideline for employee behavior.

12. In conducting its SWOT analysis, a strategic planning team lists the skills and knowledge of its employees as a strength. However, it identifies low employee morale as a weakness. The team assumes that employee morale is related to the fact that employees have not had raises in two years. To minimize the weakness it has identified, what is the first thing the company should do? A. Host an employee appreciation day and recognize key contributors. B. Survey employees about their satisfaction with the company and their jobs. C. Increase salaries of key employees who would be difficult to replace. D. Hire an outside consultant to create a pay-for-performance program.

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13. An organization decides to downsize in response to a downturn in business. The CEO recommends that the organization make its layoff decisions based on annual performance appraisal scores. However, three long-term employees have been with the organization from the beginning and have never had performance reviews. What should be the deciding factor in making the layoff decisions? A. Critical skills that the employees possess B. Seniority of the employees C. Annual salary of the employees D. Employees' proximity to retirement

14. According to the U.S. census, people over 50 make up 28% of the population. What is the MOST critical impact on the workplace? A. Organizations will be able to replace high-paid workers with lower-paid workers. B. Employers can expect their health-care costs to lessen as older employees retire. C. Baby boomers will take their organizational learning with them when they retire. D. Talented, younger employees will have more opportunities for promotion.

15. What is the advantage of using a balanced scorecard approach? A. The customer perspective is not required. B. Financial reporting will be consistent and accurate throughout the organization. C. Daily activities will be linked to business strategies. D. Employees at all levels of the organization are required to participate.

16. A retailer advertises that it always has the lowest prices on everyday goods. In keeping with its business strategy, which of the following activities is MOST important? A. Providing a highly trained sales staff B. Securing favorable contracts with its suppliers C. Building new, modern stores D. Allowing decentralized decision making

17. A company has 12 furniture stores located within a three-state area. An HR manager and a store manager are located at each store. However, all decisions are made at headquarters or according to the company's policy manual. The PRIMARY advantage of this approach is that it A. reduces staffing and operating costs. B. leads to higher levels of employee satisfaction. C. enables customer problems to be handled quickly. D. makes it easy to recruit store managers who can work within procedures.

18. Which of the following is MOST likely to prevent ethical violations? A. Training employees on laws and regulations with which they must comply B. Requiring applicants to pass an honesty test C. Creating a chief ethics officer position for the company D. Creating a code of ethics and training all employees

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19. Which of the following is protected by the Sarbanes-Oxley Act? A. Board members who approve changes in financial reporting practices B. International employees who pay foreign officials to obtain business C. Employees who report violations of federal security laws D. Managers who provide accurate information regarding former employees

20. What is the typical relationship of the strategic planning process to the environmental scan? A. The environmental scan is optional if an organization does strategic planning. B. The environmental scan is done in lieu of strategic planning. C. The environmental scan is done in conjunction with strategic planning. D. The environmental scan is done by one group, and another group completes strategic

planning.

21. The following accounts appear on a company's balance sheet. Which is considered an accrued liability? A. Vacation payable B. Prepaid expenses C. Inventory D. Stock

22. Which of the following is true of balance sheets? A. The IRS requires that they must be done yearly. B. They show items that are measurable in financial terms. C. They provide a snapshot of the organization's financial position and operating results. D. They provide a bottom-line look at how the company is performing.


A 170-employee manufacturing company has won a $3 million government contract and must produce 60,000 aircraft parts over the next three months. Presently the production department runs two shifts and utilizes 60 skilled workers per shift. Normal production for the company is 50,000 parts per month. The company must maintain its current production and fulfill the new order. Currently it has 10,000 parts in inventory.

23. The first step that the production department should take is to A. determine the standards that are required to meet its new and existing business. B. hire new staff to meet the additional demand. C. calculate the profit margins to determine if the work can be done profitably. D. immediately require its workers to work overtime.

24. Which of the following staffing strategies will work best in this situation? A. Require present workers to work overtime. B. Hire temporary workers for a third shift. C. Add quality inspectors to ensure that the parts meet standards. D. Ask managers to assist in the production area.

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25. Because the company is a government contractor, it is required to A. run disparate treatment calculations on all of its selection procedures. B. allow employees to view the information in their personnel files. C. have a formal affirmative action plan. D. establish a quota system for hiring minority employees.

26. The vice president of HR for an organization that operates on the basis of a product leadership strategy is told that the competition has just released a product superior to a new product that the organization is ready to launch. What strategy should the organization employ at this point? A. Ignore this development and complete the new product as scheduled. B. Accelerate the new product's development and launch as soon as possible. C. Abort the launch and immediately work on the next generation product. D. Abort the launch and adopt a completely new product line in a new market.

27. The CEO of a start-up organization has been struggling with the strategic planning process and wants to ensure that the plan will motivate employees at the right time. In which step of the strategic planning process should the HR director recommend that the CEO work with employees to get them motivated toward plan success? A. Strategy formulation B. Strategy development C. Strategy implementation D. Strategy evaluation

Use the following information to answer questions 28 and 29. Five years ago, a wireless company acquired a smaller competitor to gain greater market share. The acquired organization still has a very strong brand and is attractive to the financial community. However, the acquired company has not integrated into the culture of the parent organization and has become an unprofitable drain on corporate resources. The parent company's current retrenchment strategy has failed to achieve a turnaround. Management is concerned that the entire organization will soon collapse if no action is taken with the acquired company but wants to recoup its original investment. 28. What strategy should management execute?

A. Growth B. Bankruptcy C. Liquidation D. Divestiture

29. After the above strategy has been implemented, what is the next phase in the strategic planning process? A. Strategy analysis B. Strategy formulation C. Strategy development D. Strategy evaluation

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An organization with over 10,000 employees has been producing jam, jelly, and preserve products for over 100 years. It sells its products all over the world with multiple plants and a strong distribution system. The company is currently experiencing problems making their financial numbers, suffering from outdated procedures, and losing ground to the competition. Most of management is reluctant to implement change and reverts to old processes whenever change is attempted.

30. In which stage of its organizational evolution is the company? A. Introduction B. Growth C. Maturity D. Decline

31. How can HR help during this phase of the organization's evolution? A. Develop the vision statement and find growth opportunities. B. Increase recruiting efforts and leadership development. C. Formalize policies, procedures, and expansion activities. D. Cross-train employees and organize outplacement.

32. HR is assisting a project manager in clarifying project scope and other critical aspects of a project. The project manager is also assembling the project team. What should HR advise the manager to look for in project team members? A. Commitment to the project's objectives and an understanding of their role B. Knowledge of the project and a willingness to sponsor activities C. Commitment to their regular responsibilities and strong negotiating skills D. Knowledge of leadership and the ability to listen

33. An HR professional establishes a recognition program. Which of the following is associated with the directing function of management? A. Forecast the motivation needs for the recognition program. B. Design the actual recognition program. C. Schedule and conduct recognition ceremonies. D. Measure the success of the recognition program.

34. The HR department is assisting the organization with human capital planning and has been requested to provide some common measures for future evaluation. Which of the following are common measures of human capital? A. Gross profit margin, income, budgeting, and workforce accounting B. Marketing, customer interaction, price, and workforce promotion C. Inventory control, operations, scheduling, and workforce capacity D. Productivity, compensation, leadership, and workforce stability

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35. A shoe manufacturer introduced a new shoe product to the market at the lowest price possible. Sales were very poor, so the product was pulled off store shelves. The organization's management plans to reintroduce it as a high-cost designer product. These types of decisions are usually made by which business function? A. Financial assessment B. Information technology C. Operations standards D. Marketing pricing

36. Which activities should be performed FIRST in the process of merger and acquisitions? A. Team formulation, training, and preparation for change B. Performance of due diligence audit and investigation C. Organization integration and continuous communications D. Measurement implementation and staffing plan formulation

Use the following information to answer questions 3 7, 38, and 39.

An organization must make cost reductions to meet its annual financial goals. The marketing function has been targeted because it has significant cost overruns, has not met the marketing plan objectives, and has outdated, unimaginative marketing campaigns. The strategy recommended by management is to outsource the marketing function.

37. What should management build the new outsourced marketing organization structure around? A. Employee competencies and short-term inside relationships B. Job descriptions and long-term outside relationships C. Core competencies and long-term outside relationships D. Staffing plans and short-term internal relationships

38. If the HR department was requested to outsource as a cost-saving measure, which task within HR would be MOST likely to be outsourced? A. Organizational development B. Domestic relocation C. Employee development D. Succession planning

39. The leadership wants to successfully translate the outsourcing strategy into operational terms by using the balanced scorecard process. To assist with this process, the leadership wants to use the framework that organizes the strategy into four perspectives. What are the four perspectives? A. Financial, customers, internal business processes, and learning and growth B. Financial, customer service, external business processes, and training C. Financial, customers, external business processes, and development D. Financial, customer service, internal business processes, and development

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40. The process of implementing the balanced scorecard system is similar to the steps in strategic planning. Which of the following is included in Step 1, plan the process? A. Focus on specific measures that support the business strategy. B. Confirm the scope of the project and establish a project time line. C. Identify critical success factors for implementation. D. Monitor performance gaps.

Use the following information to answer questions 41, 42, and 43.

The CEO of an automobile parts manufacturing company with 500 employees in seven separate facilities in four different states has directed the company's HR director to evaluate its risk management programs after a sudden increase in employee complaints coupled with notice from the OFCCP of an upcoming compliance review. The HR director decides to conduct an HR audit as a first step in assessing the company's current risk of exposure.

41. What is the MOST probable benefit, other than determining legal compliance, of conducting an HR audit? A. Determining budget projections for HR operations B. Providing an analysis of individual jobs within the HR department C. Evaluating the integration of HR practices with business planning and strategy D. Benchmarking HR salaries with comparable market data

42. After considering what information is being sought, what type of HR audit is the HR director MOST likely to select? A. Best practices B. Compliance C. Strategic D. Function-specific

43. In the audit report, findings and recommendations are generally prioritized based on the A. risk level assigned to each item. B. cost associated with the recommended corrective action. C. alignment of the findings with the company's operating plans. D. department or operating unit affected.

44. Which of the following is MOST important to the success of a merger? A. Identifying an outside agency to conduct an independent financial analysis of each

company involved B. Appointing a dedicated communications team to ensure adequate and timely ongoing

communications for all involved C. Identifying and filling all of the new leadership positions before undertaking the

merger D. Surveying employees to determine the similarities and differences in the cultures of the

organizations involved

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45. ABC Productions is considering the possibility of offshoring its technical service call centers in order to reduce operating costs. Which strategic issue should be addressed for the company to expect a significant reduction in costs? A. Lack of organizational buy-in B. Unclear business objectives C. Inability to implement continuous improvement D. Failure to implement strong financial controls or reporting

46. Most companies contemplating offshoring are motivated by the idea that this will reduce costs. In many cases, the results of global offshoring are only marginally successful due to underestimated HR-related organizational impact and costs. The MOST frequently hidden or unexpected HR-related costs are related to A. regulatory issues. B. legal challenges. C. talent management. D. cultural and communication differences.

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Module 2: Workforce Planning and Employment


A minority female has a career discussion with her manager. During these discussions, the employee mentions that she would like to be considered for an account manager position if one becomes available, and her manager agrees that she is qualified. Several months later, a position becomes available and is given to a white female. The minority employee was unaware that the position was available and threatens to sue.

47. Does the employer have any exposure to liability in this situation? A. No, the employer need not consider the minority female since another female was

selected. B. No, the employee has a burden to manage her own career and seek out positions. C. Yes, the employer may be required to consider qualified people who have expressed an

interest in a particular position. D. Yes, minority employees should automatically be considered for any positions for

which they are qualified.

48. What could an employer do to lessen the possibility of future liability in this type of situation? A. Send an e-mail to all qualified minorities when a position is open. B. Establish a posting procedure and post all job openings. C. Ask employees to submit any career development requests in writing. D. Require sensitivity training for all HR managers.


For the past three years, a securities firm has used a selection test to screen stock analysts for its firm. Candidates who do not pass do not go further. Historically the selection rate for nonminority analysts has been 20% and the selection rate for minority analysts has been 16%. A minority employee who does not pass threatens to file a complaint.

49. What is the FIRST thing an HR professional should do? A. Determine how many minority analysts are available in the local labor pool. B. Conduct an adverse impact analysis. C. Recruit more minority analysts and waive the selection test. D. Eliminate the selection test and find one that has been carefully validated.

50. Is adverse impact indicated in this situation? A. Yes, the minority selection rate is lower than that of the majority group. B. Yes, the minority rate should be four-fifths of the dominant group's selection rate. C. No, the discrepancy between the two groups is not significant. D. No, the discrepancy is justified by the exam.



51. If the analysis shows that adverse impact is not indicated, the company should A. explain adverse impact to the applicant. B. offer the applicant a position on a probationary basis. C. allow the applicant to retake the exam. D. stand by its test and not hire the applicant.

52. A 650-person technology company decides to move its customer service operation overseas. There are 70 customer service positions. Ten customer service positions will remain in the U.S., while the remaining positions will move offshore. What is the FIRST step that the HR professional should take in staffing the customer service operation? A. Analyze the knowledge, skills, and abilities required in the customer service position. B. Lay off all customer service employees and have them reapply for the ten positions that

are available at headquarters. C. Provide the legally required 60-day notice for the terminated employees. D. Inform the state unemployment office of the job losses.

53. A large computer manufacturer needs to lay off 10% of its workforce. Due to a recently developed affirmative action program, the newest hires are the most ethnically diverse. The company sees the layoffs as a chance to remove poor employees but does not want to risk discriminating against any employee. In order from most to least weight, which of the following weightings will BEST meet the needs of this company? A. Performance appraisal data, seniority, diversity goals B. Seniority, diversity goals, performance appraisal data C. Seniority, performance appraisal data, diversity goals D. Diversity goals, performance appraisal data, seniority

54. A shipping company uses information provided by experts to predict future industry trends. The form of judgmental forecasting where experts take turns presenting their assumptions and refining a composite but never meet is called A. managerial estimates. B. the nominal group technique. C. trend analysis. D. the Delphi technique.

55. A 40-year employee suffers a work-related knee injury that requires surgery. After his surgery, he is assigned to light duty. After many medical leaves, the physician concludes that the employee's limitations are permanent, and he cannot return to his regular job as a mechanic without substantial limitations. The employee wants the company to create a troubleshooting job that does not require him to handle the physical aspects of his current job. The company terminates the employee consistent with the terms of the collective bargaining agreement. Is the employer legally obligated to provide the employee with a troubleshooting job? A. Yes, an employer must accommodate a disability if it does not create an undue

hardship. B. Yes, a long-term employee nearing retirement age cannot be terminated. C. No, the employer is not required to change the essential requirements of the job. D. No, the employer has fulfilled the terms of the collective bargaining agreement.

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56. An employer in the private sector institutes an AAP, and after a year AA representation is on par with 80% of AAP goals. The organization should then A. amend the plan to eliminate the need for those goals. B. continue the plan indefinitely unless it results in layoffs of white males. C. petition the OFCCP to discontinue the plan. D. discontinue the plan since the four-fifths objective has been achieved.

57. A chemical company that hires a scientist to perform research should have which of the following included in the employment contract? A. Protections for trade secrets and confidential information B. Collective bargaining agreement exceptions C. A ten-year noncompete agreement barring the employee from working for a competitor D. Provisions for the company to buy the employee's patents developed during

employment

58. A manager terminates an employee who "does not fit in." Rather than hurt the employee's feelings, the manager does not give a reason for the termination. Which of the following is true in this situation? A. It is better for the employee and the organization to avoid conflict. B. The employer is guilty of constructive discharge if a reason is not given. C. The employer may not legally terminate the employee for purely personality-related

reasons. D. The employer is not legally required to give a reason for discharge.

59. A major aircraft company has simplified and standardized its product development process and requires fewer engineers than in the past. The company offers an early retirement package to its engineering group. The company does not offer an early retirement package to its production workers. In this case, the Older Worker's Benefit Protection Act requires HR to A. explain to production workers why they are not eligible for early retirement. B. prepare a written waiver to be signed by engineers selecting the package. C. prepare severance pay for those employees who are not eligible for a pension. D. offer the same severance package to all who accept voluntary retirement.

60. An HR manager conducts an exit interview with an exceptional employee who is leaving for another firm. The employee is leaving because of problems with a coworker. The employee requests that the information not be shared with anyone outside of HR. The BEST solution to this situation requires HR to A. honor the employee's request and look for confirming evidence in prior and subsequent

exit interviews. B. share the information with the employee's manager and ask that it be kept confidential. C. meet with other employees in the department and get feedback on their working

relationships. D. ask the exiting employee what it would take to reverse the decision to leave.



61. A company has high turnover in its telemarketing department. Part of the reason for the turnover is that employees deal with stressful situations and difficult people. Which of the following would provide the MOST realistic job preview? A. Giving applicants a walking tour of the workplace B. Allowing applicants to talk with employees from other departments C. Allowing applicants to listen in on actual telemarketing calls D. Watching videos of how to deal with angry customers

62. To augment a comprehensive review of data, a compliance officer visits a federal contractor and interviews the organization's human resource manager about a variety of employment policies and procedures. The compliance officer also interviews employees and further analyzes data, which was previously requested by letter, including 1-9 forms. What kind of audit is being conducted? A. Compliance review B. Compliance check C. Focused review D. Glass ceiling review

63. Which of the following recruitment methods usually results in lower employee turnover? A. Employee referrals B. College placement offices C. Advertisements D. Walk-ins

64. An employment application may include sections dealing with A. arrest records. B. credit ratings. C. family status. D. authorization of information.

65. A job function is usually considered essential if it A. can be performed by many employees. B. is performed infrequently. C. is at least 5% to 10% of the job. D. requires highly specialized skills.


The HR director for a company with government contracts is seeking applicants for an accounting manager position. The opening is advertised on the company's Web site and a specialty job site. Interested candidates must complete a profile on the company's Web site or e-mail their resumes, which are added to the company's database. Five hundred candidates completed the profile, and 50 e-mailed their resumes. The HR director has a protocol that limits the number of candidates to be considered to the first 100 responses received. Out of this group, 25 had the basic qualifications for the job; however, four had location and salary preferences

20 © 2011 SHRM ^^^ Printed on 30% post-consumer waste recycled paper.


inconsistent with the position. Ten of the remaining 21 were phone-screened. One out of the 10 just accepted another position and was no longer interested. Five of the remaining nine candidates were interviewed and tested. One was hired.

66. Under the OFCCP regulations for Internet applicants, what is the applicant pool from which the HR director must solicit race, gender, and ethnicity information? A. 5 B. 10 C. 15 D. 20

67. The new OFCCP regulations require government contractors to retain which of the following records? A. All resumes submitted for consideration B. All resumes submitted that meet the basic qualifications C. Only the resumes submitted that meet the basic qualifications and are actively

considered D. Only resumes of individuals who meet the basic qualifications, are actively considered,

and are interviewed

68. In addition to the records retention requirements above, what other records are legally required? A. A copy of the job description applicable to the opening B. A record of the position for which the search was conducted, the search criteria

involved, and the date of the search C. A record of each interview conducted and who conducted the interview D. A list of any third-party agencies involved and a record of any candidates who

responded to the search

69. In terms of the OFCCP regulations, an employer (contractor) has "considered" the individual and must retain the record whenever A. the employer asks whether the resume or profile meets the basic qualifications for this

job. B. a resume or profile is submitted, solicited or not solicited, for consideration. C. a resume or profile is submitted regardless of whether it was submitted in accordance

with an established standard procedure. D. a resume or profile is submitted for any open position for which the candidate may

qualify.


An outstanding minority employee in the critical technology department wants to get promoted into management. This engineer is the best of the fully qualified candidates within the organization and is the key engineer in the organization's most successful product line. Unknown to this minority engineer, there are three open positions. One has been filled by an external

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technology manager and another by promoting from within the organization. Neither of the new managers is in a protected class. The employee informs management that he is considering accepting an opportunity with the competition.

70. What is the BEST recommendation for management to retain this top performer? A. Immediately offer the employee a significant pay increase. B. Immediately promote the employee into the remaining position. C. It is too late; allow the employee to accept the other opportunity. D. Demote the other internal manager and replace with the employee.

71. Does the employer have potential liability with the way the employee was treated? A. No, there is no potential discrimination. B. Yes, there is potential liability for disparate impact discrimination. C. No, there is no potential liability based on Executive Order 11246. D. Yes, there is potential liability based on the Sutton v. United Airlines case.


Red and Black Taxi is a very successful transportation organization in Chicago. It has an excellent executive staffing process that promotes from within. The COO has realized that it is also important to introduce new talent from outside the organization and would like to conduct recruiting in Seattle and Los Angeles. The COO wants to have a thoughtful and disciplined approach applied to the selection and on-boarding of these new hires.

72. Which is a key factor to retain and develop new executive talent integrating into the organization? A. Segregate the new executive from the rest of the organization. B. Set realistic expectations of the job and culture. C. Provide immediate coaching and feedback. D. Ensure that the new executive adheres to the organization's procedures.

73. What is one advantage of using the organization's HRIS to track the applicants from Seattle and Los Angeles? A. Recording union service data B. Creating applicant flow and utilization reports C. Outlining career path development D. Providing environmental scanning results

74. During an exit interview, what type of questions should be asked besides "Why is the employee leaving?" A. Opened-ended questions that are aligned with the organization's business needs B. Survey questions that are focused on the career objectives of the employee C. Open-ended questions that help the employer understand the competition D. Survey questions that are aligned with the organization's mission



Module 3: Human Resource Development

75. An automotive dealership provides parts sales training for its sales associates. How can the dealership BEST determine if the training has had an impact? A. Ask the sales associates about the training. B. Observe the associates' interactions with customers. C. Test the employees on sales techniques. D. Compare employee sales before and after the training.

Use the following information to answer questions 76 through 78. A manufacturing facility purchases new equipment so that it can increase its productivity. Employees are trained on the new equipment. In anticipation of the increased productivity, the piece-rate standards for the workers are increased. However, the operations manager has noticed that the quantity and quality of its products has actually declined.

76. What is the FIRST thing the operations manager should do? A. Talk to employees about the situation. B. Return to the original compensation plan. C. Send employees to refresher training. D. Lower the expected production volume.

77. The manager determines that the decline is a result of both the new equipment and the compensation policy. Because some of the employees are not yet proficient on the equipment, they believe that the higher productivity goals are not achievable. What is the next thing the manager should do? A. Reinstate the original compensation plan. B. Provide a breather period before instituting the new compensation incentives. C. Threaten to reprimand all workers who are falling below standard. D. Provide retraining and coaching for all workers who are below standard.

78. The attitude that the employees are exhibiting can best be explained by A. Theory X and Theory Y. B. Vroom's expectancy theory. C. equity theory. D. Maslow's theory.

79. Managers with direct reports receive a memo containing guidelines for performance appraisals. According to the memo, the evaluation of each manager's direct reports must conform to the following distribution guidelines: Excellent performers 10% Good performers 20% Average performers 40% Below-average performers 20% Lowest-level performers 10%

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A manager has a department where none of the employees is failing to meet the minimum requirements of the job. What recourse does the manager have under this system? A. The manager may ignore the distribution requirements. B. The manager can use good judgment to evaluate employees but must defend deviations

in writing. C. The manager can ask HR for a waiver or an alternative rating system. D. The manager's appraisals must conform to the distribution.

80. A high-performing manager is interested in promotion to an executive-level position. However, the company does not have an employee who is ready to move into the manager's position. The manager has indicated that it may be time to look at outside opportunities. What action will BEST meet the needs of both the employee and the company? A. Promote the manager immediately and appoint an acting manager. B. Enroll the manager in executive training while searching for a replacement. C. Agree on an acceptable time frame for promotion. D. Hire a temporary manager until a new manager is found.

81. A training manager and a marketing manager differ on the content of a new training program for entry-level marketing assistants. What is the best way to resolve the disagreement? A. Work with the marketing manager to develop a needs assessment. B. Let the training manager develop the program, but have the marketing manager review it. C. Let senior management decide based upon the strategic plan. D. Whoever is paying for the development of the program should have the final decision.

82. An educational services company hires an OD consultant to examine its organizational structure and reporting relationships. Presently the company of 500 employees has a senior management group consisting of a president and CEO, COO, CFO, and seven vice presidents. Two of the vice presidents have direct reports; the remainder do not. The reporting relationship for the vice presidents is not defined, and they are given direction from both the COO and the CEO. Reporting relationships for those below the vice president level are well-defined. What should the consultant do first? A. Recommend that all of the vice presidents report directly to the COO. B. Develop an organizational chart that shows all of the employee relationships as they

currently exist. C. Meet with each of the vice presidents to determine the work they do and with whom

they interact. D. Meet with each member of the senior management group.

83. A group of employees works together on a large project. Due to the nature of the project, the employees are required to assume a variety of roles during the project, and no one person has control of a particular task. The manager decides that the best way to appraise performance is by using a group appraisal. What is the BIGGEST drawback to group appraisals? A. The top performers may leave the company. B. The average performers may receive a higher rating than they deserve. C. The appraisal will lead to group conflict. D. The manager must spend more time observing the group.



84. An interviewer believes that older workers are more difficult to train and make more mistakes than younger workers. This form of performance appraisal error is A. deficiency. B. contamination. C. bias. D. conflict.

85. An employee who is good at answering customer questions on technical software is not good at completing paperwork or working with fellow employees. In spite of this, the employee is rated highly in all performance categories. What performance appraisal error has occurred? A Recency B. Halo effect C. Bias D. Leniency

86. Which type of diversity training has the MOST direct impact on employee retention? A. Multilingual training programs B. Multicultural rewards systems C. Supervisor awareness programs D. Translation and interpretation programs


The training director for a company that wants to provide training for its 30 customer service representatives wants to undertake a needs analysis.

87. What is the best way to gather information about customer service problems and solutions since the representatives are located at headquarters? A. Review employee records to define past customer service problems. B. Form an advisory committee consisting of training and operations managers. C. Ask customer service representatives to fill out questionnaires related to their training

needs. D. Conduct a series of focus groups with customer service representatives.

88. Once the data has been gathered, the next step is to A. report the needs that training can and cannot meet. B. develop the objectives for the training program. C. propose a series of solutions for customer service problems. D. decide whether to develop or buy the training program.


A pharmaceutical company is undertaking a joint venture that enables it to sell a new drug. The company is on a tight time frame and needs to provide training for 150 sales representatives located throughout the U.S.



89. Given the company's time constraints, which needs assessment method would best determine the training that sales representatives need? A. Tests B. Observation C. Advisory committee D. Assessment center

90. Which of the following needs assessment methods should the company use to create the sales representatives' buy-in? A. Questionnaire B. Phone interviews C. Assessment center D. Observation

91. Which of the following is true of training needs assessments? A. They are concerned with employee skill gaps, not attitudes. B. They can be eliminated if management knows what training is needed. C. They serve as a base line for evaluating training effectiveness. D. They do not consider the conditions under which training is conducted.


The customer service manager has come to the HR director about an employee who is experiencing job burnout and is exhibiting a lack of motivation. The manager has developed and documented a job enrichment plan for the employee in the hopes of reenergizing and motivating the employee. The manager believes the employee will have no problem reaching the performance goals but is unsure the rewards for achieving the performance improvement will be sufficient to motivate the employee to change.

92. The HR director advises the manager to focus the employee's job enrichment plan on factors that will stimulate motivation. In particular, the plan should identify outcomes attractive to the employee as a way to improve performance. Which motivation theory is the basis for the HR director's advice? A. Reinforcement theory B. Expectancy theory C. Goal-setting theory D. Motivation-hygiene theory

93. At what stage of Maslow's hierarchy will the employee's needs be satisfied by the job enrichment plan? A. Safety and security B. Belonging and love C. Esteem D. Self-actualization



94. Transfer of training refers to a trainee's ability to A. teach others what they have learned. B. evaluate the effectiveness of training. C. pass a final exam at the end of the training session. D. apply what they have learned on the job.

95. Gaps between actual and desired performance are best identified in which phase of the ADDIE process? A. Development B. Design C. Assessment D. Evaluation

96. Which level of training evaluation provides data related to sales increases or cost savings? A. Reaction B. Learning C. Behavior D. Results

Use the following information to answer questions 97 and 98. A multinational electronic manufacturing organization employs several thousand assembly workers on various product lines. The organization has just won several contracts for producing new products for their customers, while at the same time completing two contracts for obsolete products. 97. Which levels will a complete needs assessment address?

A. Department, position, and employee assessment B. Organizational, task, and individual assessment C. Past, present, and future needs D. Internal and external factors affecting production of the new contracts

98. For the organization above, which needs assessment method would BEST assess the technical abilities of the assembly workers? A. Observation B. Surveys or questionnaires C. Assessment centers D. Interviews

99. What is the difference between replacement planning and succession planning? A. Replacement planning has a long-term focus; succession planning has a short-term focus. B. Replacement planning focuses on developing back-ups for key positions; succession

planning develops a pool of candidates capable of filling several assignments. C. Replacement planning is based on a very formal development plan; succession planning

is more informal and is usually based on oral discussions between manager and employee.

D. Replacement planning focuses on mid-level positions; succession planning focuses on executive-level positions.



Module 4: Total Rewards

100. An employee declines to relocate and becomes eligible for severance benefits. At the employee's request, the company agrees to extend employment and the use of a company-paid cell phone for three months. The company later learns that the employee used his company cell phone for an inordinate amount of personal calls and used a list of confidential associate addresses to mail out advertisements for his fledgling real estate business. The company terminates the employee for misconduct and policy violations, which makes him ineligible for severance benefits under the company's benefit plan. The employee sues the company. In order to win the lawsuit, the employee must prove that A. the company treated him differently than other employees who received severance

benefits. B. he did not violate company policies by his actions. C. the company's benefit plan is covered by ERISA and he is entitled to benefits. D. the company policy was unfair.

101. Which of the following laws covers both employee whistleblower protection and notice requirements for defined contribution plans? A. ERISA B. Sarbanes-Oxley Act C. False Claims Act D. Privacy Act

102. The prudent person rule applies to A. questions that may be asked during an interview. B. risks a company may assume when managing an employee benefit program. C. the amount of reasonable accommodation required under the ADA. D. the amount of compensatory time off awarded to an employee.

103. An employer knowingly misclassifies employees without intending to pay them a salary and makes improper deductions. The LIKELY outcome is that the employer A. will have to restore the employee wages and pay a penalty. B. may lose the overtime exemption for all employees in the same job class who were

working under the persons who made the deductions. C. must reclassify the employees as nonexempt, reimburse for improper deductions,

develop a policy against improper deductions, and publish the policy in an employee handbook.

D. may take advantage of a one-time safe-harbor rule that prevents the loss of the overtime exemption provided that no new improper deductions are discovered.

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104. A full-time employee works for an organization with 250 employees. The employee's hours are reduced to 15 hours per week because of a decline in sales. As a result, the employee no longer qualifies for health-care benefits. What is the organization's obligation to the employee? A. The organization is obligated to inform the employee and the spouse that the employee

will lose insurance protection. B. The organization must send the employee COBRA notification within 14 days of

learning of the qualifying event. C. The organization must offer COBRA coverage to the employee unless it neglected to

provide COBRA notification with 90 days of eligibility. D. The company does not have to provide COBRA coverage unless the employee

terminates.

105. An employee needs to take FMLA leave to receive medical treatment for a serious injury. The employee has two weeks of sick leave available as well. The employee asks to take off 14 weeks, with two weeks paid and 12 unpaid. Must the employer honor the request? A. Yes. Unless it is a hardship, the employer must grant both vacation time and FMLA

leave. B. Yes, the law specifically allows employees to add sick leave and vacation to FMLA

leave. C. No, the law states that employees have only 12 weeks of leave. D. No, the employer can develop a plan that requires that vacation and FMLA leave be

taken concurrently.

106. Which of the following statements about long-term disability protection is generally true? A. It is integrated with Social Security benefits. B. It expires after 26 weeks of disability. C. It becomes effective once an employee's sick-leave benefits expire. D. It covers both work- and nonwork-related injuries.

107. An insurance organization is considering an incentive pay program for its customer service representatives. A customer feedback survey is the main component on which the incentive payout will be based. Which plan necessity is the insurance company using? A. Sunset clause B. Incentive program alignment C. Line-of-sight D. Incorporation of long-term goals

108. An international HR manager for a global consulting organization has determined that the primary reason executives do not want to participate in international assignments is because the assignment countries pay significantly lower salaries. Which is the BEST approach to reduce the disincentive of moving from a high-salary country to a low-salary country? A. Pure localization B. Higher of home or host country C. Lump sum D. Headquarters-based balance sheet



109. An organization wants to focus its executives' attention on increasing the value of the organization's stock over the next two years. Which is the BEST incentive vehicle for rewarding achievement of this goal? A. Incentive stock options B. Stock appreciation rights C. Phantom stock plans D. Restricted stock grants

110. Which of the following is the MOST common feature of a golden parachute? A. There is a specified transition period of not greater than 90 days. B. Stock options are subject to an accelerated vesting schedule. C. There is a guaranteed seat on the new board of directors. D. There is an extended period of COBRA benefits.

111. A multinational organization is experiencing strong resistance from its U.S. employees who are offered international assignments in countries with high social security taxes. How will totalization agreements assist international assignees under these conditions? A. They document the international assignee's responsibilities and the organization's

responsibilities regarding who is responsible for paying the social security taxes. B. They eliminate dual social security taxation. C. They are negotiated on a case-by-case basis. D. They require the organization to pay both the employer and employee share of host-

country social security taxes. 112. From a U.S. organization's point of view, paying higher international assignment

compensation than necessary in Europe is most likely to result when using which international assignments compensation approach? A. Cafeteria B. Lump sum C. Pure localization D. Home-country-based balance sheet

113. A publicly traded organization wants to reward its key performers by providing stock options beyond what they receive when they join the organization. To minimize the taxes due when the option is exercised, the organization should issue what type of stock options? A. Incentive stock options (ISOs) B. Nonqualified stock options (NSOs) C. Restricted stock grants D. Performance share options

114. Which of the following is a common action taken in the U.S. to lower budgets that would most likely violate compensation laws in other countries? A. Reduce base salary levels. B. Offer early retirement packages. C. Delay or do not fill open positions. D. Downgrade job titles.

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A public relations agency, formed two years ago, has been growing rapidly and now has over 200 employees. The most recent hire was the vice president of HR, whose first initiative is to create a compensation plan that will accommodate rapid growth. Currently all employees are based in the Chicago office, but plans to open a San Francisco office are underway.

115. Which of the following is NOT a key consideration when developing a pay plan? A. It is fiscally sound and based on the organization's ability to pay. B. It is perceived as fair to all employees. C. It satisfies employees' income requirements. D. It supports the organization's vision and goals.

116. In reviewing exit interview data, it is apparent that the majority of resigning employees were paid below market. The vice president of HR determines that paying at market must become the organization's official compensation philosophy if the organization wants to decrease turnover levels. What is the FIRST step the vice president of HR should take to determine market rates? A. Contact a local compensation consultant and arrange to have a salary survey conducted. B. Review job descriptions to ensure that they reflect actual duties and responsibilities. C. Review any salary surveys purchased in the past few years, age the salary information

to make it current, and compare it to the organization's salary rates. D. Network with other HR professionals in the same industry to understand what salary

levels they are paying their key positions.

117. After reviewing several salary surveys for market data, the vice president of HR determines that the organization can afford to pay market rates for those employees based in Chicago but not for those employees based in San Francisco. According to a total rewards philosophy, which is the BEST solution? A. Implement a "match market" policy for Chicago and a "lag market" policy for San

Francisco. Provide San Francisco employees with additional indirect compensation. As finances allow, move the San Francisco office to a "match market" policy.

B. Continue with a "lag market" policy until the organization is able to afford a "match market" policy for all locations.

C. Implement a "match market" policy for Chicago and a "lag market" policy for San Francisco. Do not communicate that the offices have different policies. Do not share the salary structure beyond the executive suite.

D. Bring both the Chicago and San Francisco offices to "match market." Raise agency fees in order to fund the pay plan.

Use the following information to answer questions 118 and 119. An organization that offers 401 (k) and other defined contribution plans is about to switch to a new plan provider as well as change some of the investment options offered. Notices of the blackout period were distributed six weeks ago.



118. What does NOT typically happen during a blackout period? A. The outgoing record keeper performs a final reconciliation of accounts. B. The incoming record keeper reviews the data for accuracy. C. Account holders may obtain distributions and loans. D. Executives may not trade company stock held outside the plan if 50% of plan

participants are affected by the blackout. 119. According to the Sarbanes-Oxley Act (SOX), the blackout notice must contain all EXCEPT

which of the following? A. Reason for the blackout period B. Identification of participant rights that are affected C. Acknowledgement of potential loss of earnings due to blackout period D. Expected beginning date and length of blackout period

120. The vice president of HR is responsible for overseeing defined benefit and defined contribution plans. The organization has been experiencing slow sales for the past few years and is conducting rounds of layoffs. The CEO has asked if assets from the pension plan can be used to cover expenses until sales pick up. According to the prudent person rule, how should the vice president of HR respond? A. Yes, the pension plan can be used as long as the way in which it is being used is well

documented. B. Yes, the pension plan can be used but only if a promissory note is issued by the

organization. C. No, the pension plan should not be used until the plan members vote to do so. D. No, the pension plan should not be used because it would be funding an unwarranted risk.

121. From a U.S. perspective, which of the following is a disadvantage of a headquarters-based approach to international compensation? A. Employees' purchasing power is equalized. B. Employees must negotiate with the company to get the best deal. C. The employer incurs higher costs than under some other plans. D. Employers find it difficult to recruit candidates for international assignments.

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Module 5: Employee and Labor Relations

122. Which of the following is a mandatory subject for collective bargaining? A. Retiree benefits B. Closed shop C. Discriminatory hiring D. Overtime

123. A major air freight carrier allows pilots to bid for extra, voluntary open flying times not covered in the regular monthly schedule. Flights are awarded to crews on the basis of seniority. The union and the company disagreed on several provisions in the current contract. As a result, the union asked all pilots not to bid on open flying times until the differences were resolved. The company lost several large jobs due to the lack of pilots and filed a complaint against the union for an illegal strike. Is the union guilty of an illegal strike? A. Yes, the union is creating a work slowdown, which is illegal. B. Yes, the union cannot encourage its employees not to work. C. No, the employees' actions did not rise to the level of a strike. D. No, the employees did not picket or attempt to drive away customers.

124. A company advertises an opening for a home health-care aide. A candidate reports to the employment interview wearing a union button and volunteers during the interview that her intention is to seek employment in order to organize the employer's staff. The employer refuses to hire the candidate. What is the MOST likely effect of this management action? A. The employer will do background checks on the union involvement of future applicants. B. The employer can refuse to hire without penalty if the candidate's intention is solely to

organize the employees and not remain on the job. C. The union cannot sue the company for committing a ULP. D. The NLRB will demand that the employer employ the candidate.

125. A form of collective bargaining in which unions negotiate provisions similar to those that exist within the industry is referred to as A. coalition bargaining. B. multiple employer bargaining. C. pattern bargaining. D. coordinated bargaining.


A unionized workforce participates in the company's yearly employee satisfaction survey. At the next bargaining session, management uses the survey data—although it has promised not to do so—to show that employees, on the whole, are satisfied with their salary and benefits. The union files a grievance against the employer.



126. What is the likely result of this action by the union? A. The NLRB will require the company to pay damages to the union. B. An arbitrator will impose sanctions against the employer. C. The union grievances will be dismissed. D. The company will discontinue the employee survey.

127. The BEST way to encourage union members to participate in future surveys is for the company to agree to A. separate the results by union and nonunion members. B. agree not to use the results in collective bargaining sessions. C. provide the survey results to the union prior to sharing them with employees. D. allow the union to develop its own employee survey.

128. Which of the following trends in union membership will continue? A. Female membership will slightly outpace male membership, because organizers are

targeting the lower-paying jobs held by women. B. Unions will continue their robust growth because of an unsettled economy and

financial concerns related to retirement and health-care benefits. C. Union membership will show a healthy growth as union organizers target immigrants

who are working at minimum wage jobs. D. The unionization rate for government workers will remain steady despite the high

rate of retirement in the public sector.

129. Which of the following statements is true when a unionized company's operation is purchased by a new employer? A. The new employer can refuse to bargain with the present union. B. The bargaining unit remains the same unless the union loses its majority status. C. The new employer must bargain with the union unless new supervisors are hired. D. The union members must sign authorization cards and go through the election

process again.

130. An account executive has worked for an advertising agency for ten years. The employee resigns and opens a new advertising agency. A noncompete agreement was part of the job offer, and the agreement specifies that the employee cannot solicit company clients in the New York metro area for a period of two years. The employee takes the company to court and asks to have the agreement thrown out. What is the likely outcome? A. The employer will probably prevail because the noncompete agreement was signed

at the time of hire. B. The employer will probably prevail because the agreement is specific and covers a

reasonable length of time. C. The employee will probably prevail because the agreement restricts the employee's

ability to earn a living. D. The employee will probably prevail because the company cannot prove that

substantial damages are likely to occur.



131. A customer service employee in a small company handles customer orders, prints the invoices, and sends them to the production and shipping department. Over time, the employee has become bored with the job and the work has become routine. Given the size of the company, what can the employer do to increase employee satisfaction with the job? A. Rotate employees between customer service and shipping. B. Allow the employee to apply for another job in the company. C. Send the employee to a professional development course. D. Design bonuses that reward the employee for measurable results.

132. When the EEOC issues a "right to sue" notice, it indicates that A. a viable case exists. B. the charging party may proceed with a lawsuit. C. conciliation should be attempted. D. the agency is willing to litigate on behalf of the employee.

133. A company operates movie theaters around the U.S. and wants to convert theaters in several locations from company-run operations with union employees to manager-operated theaters that use fewer employees. Because of computerization, film projectionists are no longer needed. Without consideration, the company fires projectionists at unionized theaters. The union protests to the NLRB. What will the NLRB do in this case? A. Allow the company's action to stand, since the jobs are now obsolete. B. Reinstate the workers because the company has a duty to bargain over the elimination

of positions. C. Require the company and the union to go to binding arbitration. D. Recommend that the union and the company generate a local memorandum of

understanding.

134. The significance of the Weingarten rights is that A. union employees have the right to have a mediator present during a disciplinary

proceeding. B. union employees have the right to have a coworker present during certain management

investigations. C. jurisdictional proceedings of the NLRA do not apply to nonunion environments. D. jurisdictional proceedings of the NLRA depend on the annual revenue or volume of

business.

135. A trucking company shares a common building entrance with a telecommunications company. The trucking company is being picketed, but the telecommunications company's business has been affected. The union may continue to picket the main entrance of the building if A. people are not prevented from entering the building. B. the telecommunications company has a separate entrance to the building. C. picketing is confined to the back entrance of the building. D. the telecommunications company gives its approval.



136. What is the primary difference between collective bargaining in the U.S. and foreign countries? A. Workers in foreign countries are less involved in labor decisions. B. Foreign governments play a larger role in bargaining. C. U.S. collective bargaining is more adversarial. D. Collective bargaining in the U.S. is more likely to lead to strikes.

137. For the last two weeks, an accounts payable person has been 10 to 15 minutes late each day. When you bring up the issue with the employee, you learn that the employee's spouse has cancer and that the employee cannot leave for work until a caregiver arrives. What is the BEST option that will meet the needs of the employee and the company? A. Allow the employee to shorten the workday by 15 minutes. B. Suggest that the worker consider FMLA leave. C. Deduct the employee's pay by 15 minutes per day. D. Adjust the employee's schedule to allow for later arrival and departure.

138. An employee has been disciplined twice for failing to follow the supervisor's instructions. The HR manager has discussed the situation with the employee and has issued an oral warning. The next week the employee and the supervisor argue over the best way to complete the work. The employee shouts, "Then do it yourself," and throws a legal pad at the supervisor. What is the BEST way to handle the situation? A. Terminate the employee immediately. B. Suspend the employee while you investigate the situation. C. Provide the employee with a written warning notice. D. Reassign the employee to another supervisor.

139. Which of the following statements BEST describes interest-based bargaining? A. It encompasses several communication techniques. B. It is similar to good-faith bargaining concepts. C. Any costs can be justified since the outcome will result in a gain for one of the parties. D. It is an effective bargaining tool for investigative interviews.

140. A organization wants to facilitate upward communication within departments and reinforce their open-door policy. Which of the following methods would be MOST effective? A. Climate survey B. Annual department communication meetings C. Skip-level interviews D. Employee participation committees

141. Which of the following is an example of a common workplace situation that may require alternative dispute resolution (ADR)? A. Discrimination charges B. Layoffs C. Merger restructuring D. FMLA requests

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142. What is the significance of Circuit City Stores v. Adams? A. Accommodations must be made for the multilingual needs of the workforce. B. Noncompete agreements are legally defensible if an employee signs a job application. C. A pre-hire employment agreement requiring arbitration of all employment disputes is

enforceable. D. An employer is responsible for an employee's wrongful act only if it occurs on

company premises.

143. The fact that all unfair labor practice charges that apply to employers also apply to managers and supervisors is known as what type of relationship? A. Employee-supervisor B. Fair representation C. Fiduciary D. Agent-principal

144. An HR professional calls you to check references for an employee who has left your organization. The employee did not get along with other employees, was verbally abusive, and was involved in at least one altercation with another employee. You are concerned that you may be sued for slander if you provide information. How should you respond? A. Provide the details of the behavior but ask that your statements be kept anonymous and

confidential. B. Verify the employee's title, dates of employment, and salary. C. Provide only accurate information that is job-related and factual. D. Suggest that the prospective employer probe into the applicant's relationship with

coworkers.

145. The employee expense reimbursement policy, procedures, and work rules have been developed and written. How should the information be dispersed to the employees? A. Managers and employees should be trained by HR. B. Managers should be trained by HR, and employees should be trained by managers. C. Managers and employees should be trained by the accounting staff members. D. Managers and employees should be trained through an e-learning process.

146. An extremely efficient and high-performing employee in the organization continues to have problems with tardiness. The supervisor has met with the employee a number of times individually and has warned the employee about the problem. The supervisor is very frustrated with the ongoing problem and has come to the HR manager wanting to fire the employee. What should the HR manager do? A. Agree to fire the employee, therefore setting an example to others. B. Give the employee a written warning, the next step in the corrective action policy. C. Tell the supervisor to ignore the problem as the employee is a top performer. D. Reassign the employee to another supervisor who will deal with the problem.

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147. An organization decides to conduct a focus group session to verify the positive results of an employee satisfaction survey. Which of the following is the PRIMARY advantage of the focus group? A. Translated materials can be made available for participants who may need them. B. Participants can be influenced by others in the open discussion. C. The format is flexible and comfortable for participants. D. Participants can control the direction of the discussion.

148. A Midwest stationery store has decided to evaluate the effectiveness of its employee relations program. One of the measurements the organization decides to use is turnover rate. To better understand why employees voluntarily leave, which of the following would be the MOST helpful to review? A. Turnover by performance relationships B. Average tenure of current employees C. Voluntary separations by reason for leaving D. Employee to supervisor ratio

149. An employee has brought a gun to work. The employee is showing the gun to others but is not threatening anyone. The organization's policy states that possession of a gun or rifle will result in termination. How should the organization respond? A. Have the employee arrested. B. Suspend the employee while investigating. C. Terminate the employee on the spot. D. Set a precedent with this employee.

150. Conciliation might be used to resolve conflicts between an organization's management and the union. In which type of conciliation might the mediator collect data and restate the positions of each party? A. Facilitation mediation B. Fact-finding mediation C. Ad hoc conciliation D. Permanent conciliation

151. Bargaining that resolves more than one issue and focuses on creative solutions and mutual benefits is known as A. distributive. B. circumvention. C. integrative. D. surface.

152. An organization's employees are preparing for a union election vote. Employees must be eligible to vote using the NLRB's criteria. Which of the following employees would NOT be eligible to vote? A. Employee on sick leave B. Employee who is striking C. Employee on military leave D. Employee who has been permanently laid off

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Module 6: Risk Management

153. A construction company's OSHA illness and injury rate has increased over the last three years. What is the FIRST thing that HR should do? A. Form a safety committee and hold meetings on a regular basis. B. Request an OSHA audit to identify unsafe working conditions. C. Provide safety incentives for employees who are accident-free. D. Analyze OSHA Form 301 to look for injury trends.

154. An applicant applies for a job as a truck driver for a local courier company. The employer requires the applicant to take a test to screen for use of illegal drugs. This request is legal if the employer A. has already made a job offer. B. requires all couriers to take the test. C. can prove that the test is job-related. D. protects the confidentiality of results.

155. An employee suffers a severe ankle sprain at a company-sponsored softball game and cannot perform an essential function of the job. The company employs 35 people and does not have a light-duty job for the employee. Which of the following is the BEST option for the employer? A. Provide workers' compensation benefits for the employee. B. Require the employee to take FMLA leave. C. Provide reasonable accommodation under ADEA. D. Give the employee a temporary layoff.

156. A department store hires security guards to patrol the store entrances and floors. A guard observes an employee taking jewelry and putting it in a shopping bag from another store. At what point should the security guard confront the employee? A. When the employee leaves the jewelry department B. When the employee leaves store property C. When the employee puts the jewelry into the bag D. When police are called


An employer is located in a metropolitan area and employs 100 employees on the manufacturing floor. The spouse of one of the employees has entered the workplace, is agitated, and is threatening to use the gun that is in his car. The HR manager is the highest-ranking employee on site due to the general manager and shop supervisor being on vacation. The HR manager has never encountered a situation like this, and the security guard is a retired army sergeant who does not carry a weapon.



157. What is the MOST appropriate step for the HR manager to take? A. Send security to speak with the agitated spouse. B. Call 911 and move as many employees as possible away from the agitated spouse. C. Allow the employee and the spouse to have a discussion outside the building in private. D. Attempt to calm down the agitated spouse by bringing him and the employee into the

office to talk. 158. Now that the situation is defused, what action should the employer immediately take to

reduce the likelihood of a similar incident occurring at the workplace? A. Hire a new security guard who has experience dealing with issues of violence,

preferably a retired police officer. B. Engage a security consultant to train employees on security do's and don'ts. C. Review the incident to learn how to prevent a recurrence and address the effect the

incident had on company and employee morale. D. Publish a zero tolerance policy regarding violence in the workplace.

Use the following information to answer questions 159 through 161. A pharmaceutical organization is working on a breakthrough drug to fight cancer. The organization needs to raise money to fund further research. It also needs to hire several chemists with specialty training. 159. When speaking with potential investors and potential employees, what is the MOST

effective way to protect the organization's proprietary information? A. Advise potential investors and employees that discussions will be recorded and kept on

file in the event information regarding this drug is leaked. B. Explain the sensitivity and confidentiality of the information and request that potential

investors and employees agree not to discuss the information with anyone except the interviewer.

C. Require that nondisclosure agreements (NDAs) be signed prior to discussions commencing. D. Have the organization's lawyers present at all discussions in order to maintain attorney-

client privilege. 160. A senior researcher's laptop was stolen from his automobile when parked at a grocery store.

This researcher was responsible for recording clinical trial results and other critical information regarding a new cancer drug. What is the BEST precaution the information technology department could have taken to prevent this data from being accessible, even if the laptop was stolen? A. There should be a policy that requires all data of this nature to be stored only on the

organization's network; no files should be stored on laptop hard drives. B. Confidential data may be stored on laptop hard drives, but it must be password-protected. C. Confidential data may be stored on laptop hard drives, but it must be backed up on the

organization's network every night to ensure that the organization always has a current copy.

D. There should be a policy that forbids the use of laptop computers; all employees must use workstations.



161. In the event the pharmaceutical organization's computer network is attacked by hackers using the stolen laptop, what is the FIRST step in business continuity planning? A. Communicate to employees that the network is down but that the IT department is

working on restoring it. B. Change all passwords and security protocols/routines and then begin restoring data

using the backup network. C. Allow only a few critical IT department employees to continue working on the network. D. Hire IT consultants to review security measures and make recommendations for

changes.

162. The CEO of a company that manufactures small appliances wants to ensure that the company is able to react quickly and effectively in the event of a crisis or a disaster. He instructs his vice president of HR to develop a crisis management plan. What is the FIRST step the vice president of HR should take? A. Analyze the company's capabilities and hazards. B. Identify emergency response capabilities. C. Establish a planning team. D. Review applicable federal and state regulations.

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Answers for Practice Test Questions

Module 1: Strategic Business Management

1. The correct answer is B. The company's strength is in the development of premier products. It already has a good reputation and brand recognition. By reformulating and strengthening the product, the company can remain competitive. It would be as difficult for the company to reverse its strategy to become a low-cost provider as it would be for Nordstrom to become Wal-Mart. The company's costs and culture may not be in line with a low-cost strategy. Marketing only to customers who are not price-conscious is not an option, as the company would automatically eliminate a large share of the market.

2. The correct answer is B. HR can provide more value if it is involved from the beginning in the creation of the product development process and communication plan. By being involved up front, HR can help the company to understand the HR implications of the options it has available.

3. The correct answer is D. While all of these tasks may be important, the company's biggest challenge is to develop a strategic plan that will allow it to chart its future and stay ahead of the market. After the company determines its direction, then the other tasks can be completed accordingly.

4. The correct answer is B. While the HR professional will need to decide such matters as organization and staffing, at this stage the HR professional should be analyzing what such a move will mean to the organization as a whole. The perspective that HR brings may help the group to discuss issues that they may not have considered.

5. The correct answer is B. When an organization is instituting a major change, particularly one that is likely to be unpopular, it is important to involve employees in the change process. The committee has a chance to educate employees on the state of health-care costs and determine the best way to pass on the employees' share of these costs.

6. The correct answer is B. The team has identified the need for a custom program and can describe what is expected of the program contractor. Now the team should create an RJFP (request for proposal) and send it to potential contractors.

7. The correct answer is C. A senior HR manager will be most interested in seeing how the training will benefit the company, either by reducing corporate costs or bringing in additional revenue.

8. The correct answer is C. By tracking the correlation between training and sales revenue, the HR manager can determine if the data supports the theory.

9. The correct answer is B. A scatter diagram shows the relationship between two variables. 10. The correct answer is A. There appears to be a positive correlation between revenues and

training as indicated by the direction and proximity of the points and strong pattern of the relationship.

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11. The correct answer is D. An organization's values state what is important to the organization and how employees should conduct themselves. If cooperation and participation are welcomed in the organization, employees will bring these values to the job.

12. The correct answer is B. Before the company can address the morale issue, it needs to confirm the cause of the low morale. It may be that the dissatisfaction is related to compensation; however, the team should not take action until it is certain.

13. The correct answer is A. The organization is on high ground if it determines what critical skills are needed rather than looking at performance appraisal results. This gives all employees an equal chance to keep their jobs and treats them fairly and consistently. The organization must be sure that its actions do not violate Title VII, the ADEA, or the Older Worker's Benefit Protection Act.

14. The correct answer is C. Employers must begin training and recruiting new workers before baby boomers leave the workforce and must begin developing flexible work arrangements that allow boomers to stay in the workforce beyond retirement age.

15. The correct answer is C. The advantage of the balanced scorecard approach is that it goes beyond financial reporting and also ties customer satisfaction, growth and learning, and internal business processes to a company's strategies.

16. The correct answer is B. Low-cost retailers buy in volume and deal with suppliers who are willing to give them favorable pricing and delivery terms, warehouse products for them, and provide just-in-time delivery. This enables them to pass on their savings to their customers.

17. The correct answer is A. A centralized management staff can make decisions for all stores, eliminating the need to have marketing or purchasing specialists at each store. The centralized approach also results in economies of scale and a consistent approach from store to store. On the downside, it may be less motivating for employees who would like greater control over their work.

18. The correct answer is D. While the other activities might play a key role in preventing ethical violations, it is critical to create an ethical code and ensure that employees, managers, executives, and board members can apply the code to their activities.

19. The correct answer is C. The Sarbanes-Oxley Act has a whistleblower provision that provides protection for employees of publicly traded companies who report violations of federal securities laws.

20. The correct answer is C. An organization typically conducts a SWOT analysis as part of its strategic planning process. In order to accurately assess the company's threats and opportunities, the company must have an understanding of factors outside of the organization. The environmental scan focuses on external factors and, when done in conjunction with strategic planning, provides additional information upon which the company can base its decisions.



21. The correct answer is A. The company must show wages, salaries, and vacations as accrued liabilities. The company "owes" these wages to the employees, and since they are cash transactions they must appear on the balance sheet.

22. The correct answer is B. A balance sheet reports assets, liabilities, and equity. It can only measure transactions that are measurable in money. For example, depreciation, measured in dollars, must be recorded even if there is no related cash flow impact.

23. The correct answer is A. The company must determine the amount of quality parts that can be produced in a given time period. If it falls short of the required output, it then must plan for ways to increase production.

24. The correct answer is A. In order to produce the additional parts, the company will need to require its workers to work overtime. The company needs skilled workers, and adding a third shift may not give the company the quality that it requires. It will take time and money to train new workers. In this instance, it may be more cost-effective to pay the overtime.

25. The correct answer is C. The company is required to have an affirmative action plan since it has more than 50 employees and a government contract that exceeds $50,000 in a one-year period.

26. The correct answer is C. It is better to abort the launch and work on the next generation product than to release a new product that could be seen by the market as inferior. If the organization releases an inferior product, its strategy of product leadership will be compromised.

27. The correct answer is C. Strategy implementation is the step of the strategic planning process where motivating employees to work toward organizational goals yields the greatest benefits.

28. The correct answer is D. Divesting part of the organization is often chosen by strategic managers when retrenchment fails to accomplish a desired turnaround. This part of the organization must be attractive to a prospective buyer for management to be confident in the divestiture strategy.

29. The correct answer is D. The next phase of the strategic planning process after strategy implementation is strategy evaluation.

30. The correct answer is D. Decline usually occurs when the organization becomes entrenched in rules and policies and the leadership becomes resistant to change.

31. The correct answer is D. HR will be instrumental in organizing outplacement, providing outsourcing, controlling costs, retraining key people, and cross-training employees during the decline phase of the organization's evolution.

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32. The correct answer is A. The team members must understand the project and be committed to the project's objectives. All team members must understand their roles and obligations as well as rules and processes under which the team will operate.

33. The correct answer is C. The directing function involves engaging in those activities that ensure effective operation, including leadership and motivation of employee action toward goals. Forecasting occurs during planning, designing occurs during organizing, and measuring occurs during controlling.

34. The correct answer is D. Common measures of human capital include innovation, creativity, employee attitudes, productivity, compensation, leadership, workforce stability, employee relations, employee capability, human capital investment, workforce profile, benefits, job creation, recruitment, compliance, and safety. The other choices are from other functions of business.

35. The correct answer is D. Marketing is the process of planning, pricing, promoting, and distributing goods and services to satisfy organizational objectives.

36. The correct answer is A. The first step in mergers and acquisitions is to prepare for the action by issue identification, team formulation, training, and preparation for the change. The next step is to perform the due diligence.

37. The correct answer is C. Outsourcing is rapidly becoming an accepted management tool for redefining and reengineering the organization. It challenges management to build a more flexible organization structured around core competencies and long-term relationships.

38. The correct answer is B. In the HR community, there are a number of tasks that are most frequently candidates for outsourcing, and domestic relocation is one such task. The other choices are selected less frequently.

39. The correct answer is A. The four perspectives of the balanced scorecard are financial, customers, internal business processes, and learning and growth.

40. The correct answer is B. Planning the process involves confirming the scope of the project and establishing a project time line. Focusing on specific measures that support the business strategy and identifying critical success factors for implementation are part of Step 2, the scorecard design. Monitoring performance gaps is part of Step 3, employ and refine measures.

41. The correct answer is C. Although not a primary focus, a significant ancillary benefit of an HR audit is the ability to determine the effectiveness and efficiency with which HR practices integrate into and support business planning and strategy.

42. The correct answer is B. A compliance-based audit focuses on the legal risks associated with required HR policies, practices, and procedures that are a result of federal and state laws.



43. The correct answer is A. Since the focus of the audit is the company's risk exposure, findings and recommendations should be organized by the degree of risk involved.

44. The correct answer is B. While each choice would be a positive contribution, the need for ongoing, timely, and effective two-way communications is so important that a dedicated communications team is required.

45. The correct answer is B. Unclear business objectives is a strategic issue; the other choices are all executional issues.

46. The correct answer is D. While all of the choices are factors, almost two-thirds (64%) of HR professionals cite maintaining corporate culture and communication differences as the top offshoring challenge.

Module 2: Workforce Planning and Employment

47. The correct answer is C. Courts have ruled that employers should keep careful records of internal job applications to determine whether employees have expressed an interest in particular areas of work. If so, and if positions in those areas become available, the employer may be obliged to consider qualified employees whether or not they have formally applied for a particular opening.

48. The correct answer is B. To help guard against this possibility, employers should have formal posting procedures and should follow them consistently.

49. The correct answer is B. The HR professional must determine if adverse impact is present. 50. The correct answer is C. Adverse impact is not indicated when the selection rate for

minority analysts is at least four-fifths of that of the majority group. 51. The correct answer is D. If the company has determined that adverse impact is not indicated

and the test is valid, then it should not hire the applicant. It is important that the company follow its selection procedures and treat all applicants the same.

52. The correct answer is A. HR must detennine the skills and abilities of the workforce to determine which employees can assume the ten remaining customer service positions. Since the 60 terminated employees do not represent 33% of the workforce, the company has no legal obligations under the WARN act.

53. The correct answer is A. The company will be least liable to charges of discrimination if its decisions are based first on performance appraisal data. In this way, all employees have an equal chance of remaining with the company based on their performance. Seniority might be considered next, followed by diversity.

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54. The correct answer is D. The Delphi technique is the only technique in which members work as a group without ever meeting. Managerial estimates and trend analysis are generally completed by individuals and presented to management. The nominal group technique requires face-to-face meetings.

55. The correct answer is C. The company's refusal to modify the position in the manner requested by the employee does not violate the ADA, and the limitations suggested by the employee amount to a significant change in the essential functions of the original job. Even though the company is not legally obligated to provide the accommodation, it might be good practice to create the position. However, the company must carefully document why it created the job for this employee.

56. The correct answer is A. Once a goal has been met, it can be eliminated from the plan. However, the plan should not be discontinued.

57. The correct answer is A. The company's first concern must be to protect its proprietary information. A noncompete agreement that prevents an employee from working for a competitor for such an extended period is unrealistic and probably unenforceable. Such agreements cannot prevent an employee from earning a living.

58. The correct answer is D. Employment-at-will relationships do not require a reason for termination. However, the failure to state a reason for discharge may prompt an employee to pursue a claim. Stating anything other than the true reason could be equally risky.

59. The correct answer is B. OWBPA requires employees to sign a waiver highlighting their rights and relinquishing their right to sue in exchange for a special retirement offer that is of greater benefit than that offered by the normal retirement plan.

60. The correct answer is A. HR should honor the request but should look for confirming evidence. Perhaps HR will see a behavioral pattern and can then take the appropriate action. Since there are no apparent legal issues related to the behavior, HR can honor the request for confidentiality.

61. The correct answer is C. While all of the activities here have merit, the best job preview is the one that most closely mirrors the actual job. In this case, allowing the applicant to hear actual calls and see how a representative handles them provides the most realistic look at what the position entails.

62. The correct answer is A. A compliance review is a comprehensive review that typically starts with a desk audit by the compliance office and may proceed to the contractor's site. The compliance officer may even interview employees.

63. The correct answer is A. Because employees know the corporate culture and job specifications, they usually recommend people who will fit in well. Therefore, these people



may be more likely to remain with the organization and have the highest one-year survival rates.

64. The correct answer is D. An application form should ask applicants to verify that the information they have provided is correct. Asking for information related to arrest records, credit ratings, or family status may be discriminatory and should be avoided.

65. The correct answer is D. An essential job function is one that is performed regularly and makes up at least 20% of the job. An essential function requires highly specialized skills or expertise, and, in many cases, the reason the job exists is to perform the function. Nonessential functions are less than 10% of the job and can be performed by many people in a department. If not completed, there are often minimal consequences.

66. The correct answer is D. The definition of an Internet applicant is subject to four rules: (1) The individual submits an expression of interest in employment through the Internet or related electronic data technologies, (2) the contractor (employer) considers the individual for employment for a particular position, (3) the individual's expression of interest indicates that the individual possesses the basic qualifications for the position, and (4) the individual does not remove himself/herself from further consideration or indicate that he/she is no longer interested. In this case, 550 individuals expressed their interest but only 100 were considered. Of these, 25 were qualified, but five were eliminated either by the individual's withdrawal or because their preferences were inconsistent with the position. The remaining applicants must be solicited for their race, gender, and ethnicity information.

67. The correct answer is C. The records retention requirements apply to all resumes submitted that meet the basic qualifications and are actively considered.

68. The correct answer is B. The regulations require a record of the position involved, the search criteria, and the date of the search.

69. The correct answer is A. If the employer reviews the resume or profile against the position's qualifications requirements, the candidate becomes an "applicant" regardless of whether the submission was solicited or not, whether it was submitted in accordance with an established standard procedure or not, or whether the individual applied for any position rather than a specific position.

70. The correct answer is B. Since this employee is the best of the fully qualified internal candidates and there is an opening, promote the employee immediately to prevent a prima

facie case of disparate impact discrimination.

71. The correct answer is B. Disparate impact discrimination occurs when protected classes are unintentionally treated differently from other employees, resulting in unequal consequences, or are evaluated by the same standards but with different consequences. Disparate impact is usually unintentional, but whether intentional or not, HR professionals need to look carefully at selection procedures.



72. The correct answer is B. Setting realistic job expectations and a true picture of the culture are key factors toward the successful integration and retention of new executives. Other factors include a properly structured selection process, assisting the executive to build a network of support, and providing ongoing coaching and feedback.

73. The correct answer is B. Creating applicant flow and utilization reports from the HRIS is an advantage and an application of HRIS for workforce planning. The other choices are applications of HRIS for other HR functional areas.

74. The correct answer is A. In addition to asking why the employee is leaving, the exit interview should focus on factors that are aligned with the organization's business needs. Open-ended questions should be used to discover information about areas such as compensation and benefits and organizational culture.

Module 3: Human Resource Development

75. The correct answer is D. The impact of the training on the company's revenue is the most critical gauge. Although the other options may have some merit and are also useful, the best indicator is the impact the training has on business results.

76. The correct answer is A. The manager needs to know the details behind the production issues. Are the employees still learning the new equipment? Was the training ineffective? Have the changes in the compensation plan been demotivating? Once the manager identifies the cause of the decline, appropriate action can be taken.

77. The correct answer is D. Some employees need more time and help than others to become proficient at the new equipment. It is critical to ensure that all employees understand the new equipment and process. In addition, when learning a complex skill, it is important to remember that employees may learn slowly at first and then become more proficient as new skills are acquired. Providing a breather period is not the best option because it assumes that the employees will get better on their own without any further intervention.

78. The correct answer is B. Employees must believe that a certain outcome is worth the effort and that there is a high probability of success. This is the basis of Vroom's'expectancy theory.

79. The correct answer is D. In a forced distribution system, employees are grouped by performance in order to ensure a normal bell curve distribution. It does not rank employee performance simply against job requirements. The supervisor should comply.

80. The correct answer is B. This option best meets the needs of the employee and the organization. It gives the employee a tangible sense of progress and gives the company time to find an effective replacement.

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81. The correct answer is A. The marketing manager is accountable for defining the major emphasis and content of the training program. The training manager must act as a business partner to develop effective training that meets the marketing manager's training requirements and the needs of the organization. Working together on a needs assessment will ensure that the program will meet the needs of both parties.

82. The correct answer is D. The consultant should begin by meeting individually with each of the members of the key management group. From there, the consultant can begin to talk to the vice presidents and their direct reports to determine what structure might work best for the company.

83. The correct answer is A. Top performers feel the need to be given credit and feedback on the job that they have done. They may find it difficult to be part of a group appraisal situation and may leave for a position that satisfies that need. Group conflict may appear to be a drawback, but conflict is not necessarily a negative. It can lead to increased performance if the group is given time to work out key issues.

84. The correct answer is C. Bias occurs when an appraiser's values, beliefs, or prejudices distort ratings. For example, a manager may believe that female employees with young children should not work outside the home and will rate employees in this situation more critically.

85. The correct answer is B. The halo effect occurs when an employee's excellent performance in one area causes the appraiser to also give the employee high ratings in all other areas.

86. The correct answer is C. Supervisors are influential and are critical to employee retention.

87. The correct answer is D. Since all the customer service representatives are in a single location, it will be cost- and time-efficient to conduct focus groups with the target audience and hear from them directly. Also, customer service employees are in the best position to identify problems and solutions.

88. The correct answer is A. The next step is to sort through the findings and determine which needs can be addressed by training and which cannot. Based on this analysis, the other steps related to purchasing or developing a program can begin.

89. The correct answer is C. Because the company is on a tight time frame, they need to speed the assessment process. Advisory committees are made up of individuals who know the training needs of the target audience. Input from the committee can be gathered very simply and inexpensively.

90. The correct answer is B. Considering that time is an issue and that sales representatives are geographically dispersed, phone interviews will be most effective. Interviews are most useful in that they can uncover attitudes and allow for discussion of problems and possible



solutions. This would not occur with a questionnaire. The tight time frame rules out observation and assessment centers.

91. The correct answer is C. An effective needs assessment allows a company to both design and evaluate a training program against the specific needs uncovered. A good needs assessment considers employee skills and attitudes as well as conditions under which training will be delivered. Assumptions about what training is needed should be checked to avoid the risk of providing too much or too little training.

92. The correct answer is B. Vroom's expectancy theory is based on the premise that an individual acts in a certain way based on the expectation that the act will be followed by a given outcome and the attractiveness of the outcome to the individual. Reinforcement theory focuses on behavior as a function of consequences. Goal-setting theory proposes that difficult goals result in higher performance. Motivation-hygiene theory states that intrinsic factors are related to job satisfaction while extrinsic factors are related to job dissatisfaction.

93. The correct answer is C. A job enrichment plan increases the employee's responsibilities and therefore sense of fulfillment. This would be at the esteem stage.

94. The correct answer is D. Transfer of training refers to effective and continuing on-the-job application of knowledge and skills gained during the learning experience.

95. The correct answer is C. Training gaps are best identified during the assessment phase of training. The design and development of the training program and evaluation tools are based on the performance gap analysis.

96. The correct answer is D. The most difficult and most valuable evaluation occurs at the results level. The difficulty is in determining what role training played in producing the results. The reaction level focuses on the satisfaction of trainees; the learning level focuses on trainees' abilities to learn facts, ideas, and concepts; and the behavior level focuses on observable changes in job behaviors.

97. The correct answer is B. A complete needs assessment looks at three levels of the organization: the organizational level to determine future knowledge, skills, and abilities (KSAs); the task level to compare job requirements with specific employee knowledge; and the individual level to determine if the employee is performing to standard.

98. The correct answer is A. The observation method is best for technical or functional work. This method allows for the least amount of disruption to the work flow and provides quality quantitative data.

99. The correct answer is B. Replacement planning is focused on a single functional area and on finding back-up candidates who are ready to assume a position within the short term, usually 12 months. Succession planning focuses on developing a pool of talented employees who



will be capable of filling a variety of positions within the long term, usually 12 to 36 months. Replacement planning can be done at all levels, not just for mid-level executives. Generally speaking, replacement planning is more informal than succession planning.

Module 4: Total Rewards

100. The correct answer is B. The employee must prove that he did not violate company policy. The eighth U.S. Circuit Court of Appeals upheld a decision in favor of an employer who had discharged an employee for violation of company policies, even though the discharge precluded the individual from receiving severance benefits under a plan covered by the Employee Retirement Income Security Act (ERISA). In this situation, an employer must assess the cost of paying the severance package versus legal costs.

101. The correct answer is B. The Sarbanes-Oxley Act protects whistleblowers who expose security violations and also requires administrators of defined contribution plans to provide 30 days' notice of a blackout period.

102. The correct answer is B. The employer cannot take more risks when investing funds than a reasonably knowledgeable, prudent investor would take.

103. The correct answer is B. If an employer has a practice of making improper deductions, the employer can lose the overtime exemption for all other employees in the same job class who work for individuals who made improper deductions during the same time period.

104. The correct answer is B. You must provide COBRA notice to an employee within 14 days of a qualifying event, even if the employee will not qualify for COBRA coverage.

105. The correct answer is D. Employers are free to decide if sick leave and/or vacation must be taken concurrently with FMLA leave. In this case, the employer is within the law to grant 12 weeks of leave and pay the employee sick leave pay for two of the weeks.

106. The correct answer is A. Long-term disability coverage is usually integrated with Social Security to avoid duplication of coverage.

107. The correct answer is C. Line-of-sight refers to the ability of an employee to control or influence the components of the incentive plan. The employee needs a level of control over the component in order to believe that the incentive plan is fair and worth the extra effort.

108. The correct answer is B. The higher-of-home-or-host-country approach compares home-country salary and host-country salary and pays the assignee the higher one. This allows the employee from a high-pay country to preserve the higher pay and accept the international assignment in a low-pay country. Pure localization means that the international assignee would be paid the same as the local nationals who are paid significantly less.

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109. The correct answer is B. Stock appreciation rights (SARs) are linked to the value of the stock at the beginning of the program and compared to the value of the stock at the end of the program.

110. The correct answer is B. Executives with golden parachutes generally have a significant portion of their compensation in the form of stock options. Golden parachutes specify an accelerated vesting schedule of the executive's options in order to keep the executive whole in the event of a merger or acquisition.

111. The correct answer is B. Totalization agreements, also called international social security agreements, are agreements between the U.S. and other specified countries to eliminate dual taxation.

112. The correct answer is C. Pure localization pays international assignees the same compensation as local nationals in equivalent positions. If an assignee is moving from the U.S. to, for instance, Switzerland, this will result in a significant pay increase, which may not be necessary or justified.

113. The correct answer is A. Incentive stock options allow deferral of taxation until the stock is sold, providing the employee holds the stock for a year or more from the time of exercise and two years from the time of grant.

114. The correct answer is A. Decreasing an employee's base salary is illegal in many countries, particularly in Latin America and Europe.

115. The correct answer is C. While many organizations would like their employees to be content with their pay and not wish for more, this is not a key design consideration. Being able to fund the pay program and ensuring a high degree of fairness are fundamental to effective plan design.

116. The correct answer is B. Before a market comparison can be made, accurate job descriptions are needed. The jobs must be closely matched to ensure that the salary data is applicable. If a job match is not 90% or higher, then it is not a close enough match.

117. The correct answer is A. A total rewards philosophy considers all forms of financial rewards that employees receive. While organizations often prefer to be homogenous regarding pay structures, total rewards encourages the inclusion of all types of compensation, both direct and indirect. Total rewards packages should support organizational goals and objectives.

118. The correct answer is C. Plan participants or beneficiaries cannot obtain loans or distributions during the blackout period. The accounts are frozen while the reconciliation occurs.

119. The correct answer is C. While a blackout notice must advise participants to evaluate the appropriateness of investment decisions in light of their inability to direct or diversity their



accounts, it does not have to acknowledge that a financial loss may take place during the blackout period.

120. The correct answer is D. The prudent person rule includes a duty to act prudently and with due diligence, a duty of loyalty to the fund and its members, and a principle of diversification with avoidance of unwarranted risk. Funding the company with pension plan assets does not qualify as avoiding unwarranted risk. As the money would be reinvested in the company, it means the plan would not be sufficiently diversified.

121. The correct answer is C. The headquarters-based approach to compensation is simple for international assignees to understand and simple for the company to administer. However, it usually costs more than other compensation approaches since it pays all assignees the same, regardless of their country of origin.

Module 5: Employee and Labor Relations

122. The correct answer is D. Negotiation of rate of pay is required by law and the NLRB. Retiree benefits may be negotiated, but such negotiation is not required by law. Closed shop and discriminatory hiring are illegal and cannot be negotiated.

123. The correct answer is C. The union's concerted action only encouraged pilots to not bid on a voluntary program and did not constitute an illegal strike. The union promoted the concerted action as a way to pressure the company to resolve its differences of opinion. However, this did not rise to the level of a strike, which is "concerted interruptions of operations by employees."

124. The correct answer is B. Salting occurs when a candidate seeks employment for the specific purpose of organizing the employer's employees. The NLRB recently changed its prior position that salting was not inappropriate and now is more likely to rule in the employer's favor if it determines that the salt never was "genuinely interested" in establishing an employment relationship with the employer.

125. The correct answer is C. Pattern, or parallel, bargaining takes place when unions negotiate provisions covering wages and other benefits similar to those that already exist within the industry. This is common in the auto industry.

126. The correct answer is C. The union grievances will most likely be dismissed. The employees participated of their own free will, and the opinions they gave were their own. There is no contractual basis for the grievance.

127. The correct answer is B. The company must win back the union's trust by not using the results against them in the bargaining sessions. Without this agreement, the union will likely encourage its members not to participate.

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128. The correct answer is D. The unionization rate for government workers has remained steady since 1983, while overall union membership has steadily declined from its peak in the 1950s.

129. The correct answer is B. When a new employer takes over an existing unionized company, the bargaining unit remains the same. The new employer cannot unilaterally change conditions and must bargain in good faith if it leaves operations intact with the predecessor's employees. The union also has this obligation.

130. The correct answer is B. Most courts find a two- to three-year time frame reasonable for noncompete agreements and will uphold an agreement that is specific without being overly restrictive. In this case, the employee is still able to earn a living even if present clients can not be approached.

131. The correct answer is A. Allowing the employee to rotate between two related jobs may alleviate the monotony of the routine. In addition, the company will benefit from having people who can fill in for each other.

132. The correct answer is B. The EEOC issues a "right to sue" notice when it determines that there is no reasonable cause to believe that discrimination has occurred. The notice gives the employee the right to file suit and does not rule on whether the case is viable.

133. The correct answer is B. In a similar case, the NLRB ruled that such changes represent a significant change in the structure of the bargaining unit and require negotiation with the union. The company has a duty to bargain with the union over the impact of the elimination of the positions. The NLRB has the authority to order the projectionists to be reinstated.

134. The correct answer is B. Weingarten rights allow a union employee to request the presence of a coworker during an investigatory interview that the employee reasonably believes may result in disciplinary action.

135. The correct answer is B. The trucking company must establish and maintain a separate gate for the workers of the telecommunications company. In addition, the union picket signs must clearly show which of the companies is being picketed.

136. The correct answer is B. The governments of foreign countries may play an active role in advancing national or industry agreements, and they may require or encourage union recognition.

137. The correct answer is D. The easiest option would be to let the employee begin later and stay later each day. This is fair to both the company and the employee. FMLA leave may be taken in small increments, but the record keeping requires more effort than flexing the schedule.

138. The correct answer is B. It is best not to terminate an employee on the spot even if the offense seems to require it. From a legal standpoint, it is best to complete an investigation and document your findings. You can suspend an employee subject to discharge pending further investigation.



139. The correct answer is A. A variety of techniques (e.g., brainstorming, information sharing) are a part of interest-based bargaining, with the goal of promoting communication and reaching a mutually acceptable position.

140. The correct answer is C. Skip-level interviews allow employees to communicate with a manager one level higher than their own managers. This allows employees to speak more freely and makes it easier for managers to gather input on departmental employee issues and perceptions.

141. The correct answer is A. Discrimination charges filed with the EEOC have increased dramatically in the past decade. Cases are backlogged. ADR procedures can provide employees with a process that is accessible, prompt, and impartial and that results in more timely resolution of complaints and reduced resolution costs. ADR is a viable alternative to litigation.

142. The correct answer is C. In this case, the Supreme Court held that a provision in a pre-hire employment application requiring that all employment disputes be settled by arbitration was enforceable under the Federal Arbitration Act.

143. The correct answer is D. The agent-principal relationship means that regulations on ULPs that apply to employers also apply to acts of individual managers and supervisors.

144. The correct answer is C. The best practice is to provide information that is job-related and factual and to provide that information consistently to all employers. Avoid subjective comments like, "He just never seemed to fit in here." Instead say, "We had three complaints that he was verbally abusive, and on one occasion he was involved in an altercation that resulted in a reprimand and warning." Information that is factual, objective, and true is a good defense against a slander claim.

145. The correct answer is B. HR should train the managers; then the managers should be responsible for training their employees.

146. The correct answer is B. The supervisor has already had verbal problem-solving discussions with the employee. The next step should be a written warning.

147. The correct answer is C. The format is flexible, allowing participants to feel comfortable sharing. However, this may result in participants being influenced by others, and the discussion may go off on a tangent if not well controlled.

148. The correct answer is C. Understanding the reasons employees leave the organization and the frequency with which each reason occurs provides information regarding potential employee relations issues.

149. The correct answer is B. Even though the employee was not following policy, an investigation still needs to take place. Removing the employee reinforces the seriousness of the offense and provides time for an orderly investigation.



150. The correct answer is B. The mediator collects more information and data in fact-finding mediation, allowing the parties to see more detail.

151. The correct answer is C. Integrative bargaining takes place when there is more than one issue to be resolved and the potential exists to make tradeoffs that will result in mutual benefit. Distributive bargaining takes place when the parties are in conflict over an issue and the outcome represents a loss for one party and a gain for another, Circumvention is unlawful and occurs when an employer discusses bargaining proposals with its employees that have not been disclosed to the union. Surface bargaining involves merely going through the motions of bargaining, with no real intention of reaching a formal agreement.

152. The correct answer is D. An employee who has been discharged or permanently laid off is not eligible to vote in the union election.

Module 6: Risk Management

153. The correct answer is D. Before any action is taken, the company must determine where and why accidents occur. Then it can determine what type of corrective action is needed. Form 301 lists each recordable injury and illness and must be kept for five years. Reviewing the form can identify trends and patterns.

154. The correct answer is B. If all prospective employees are required to take the test, the exam is legal. The EEOC does not consider this a medical exam. Therefore, a job offer does not have to be made before administering the test.

155. The correct answer is A. Since the employee is injured at a company-sponsored event, the employee is entitled to workers' compensation. If the employee were injured at an event not sponsored by the company, such as a family picnic, workers' compensation would not apply.

156. The correct answer is C. A security guard may approach the employee immediately upon seeing the shoplifting and may ask to see proof of purchase for the merchandise.

157. The correct answer is B. With limited experience and minimal security, it is most appropriate to call the police. The first concern is to protect all employees. While the agitated spouse may be bluffing, the HR manager would not know that. It is best to allow law enforcement handle the situation.

158. The correct answer is C. A post-incident review should focus on what needs to be done to prevent a similar incident (for instance, preventing nonemployees from gaining access to work areas) and what needs to be done to deal with the aftereffects of the incident.

159. The correct answer is C. Nondisclosure agreements (NDAs) are the most effective way to maintain confidentiality regarding highly sensitive proprietary information. NDAs have

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become quite common, especially in research-intensive industries, and are enforceable in courts.

160. The correct answer is A. While it is not common practice, information that is highly sensitive to the operations of the organization should be stored on systems that do not leave the organization's premises. By not allowing the data to be stored on the laptop hard drive in the first place, the stolen laptop would not be such a security concern.

161. The correct answer is B. First secure the network from further unauthorized access by preventing ongoing access. Once that is done, then communicate that the network is down to employees. Do not allow any employees to continue working on the network; it must be secured and rebuilt before access is granted. A post-mortem review may indicate the need for professional consulting assistance to prevent further attacks of this nature.

162. The correct answer is C. Planning requires a coordinated effort of many "experts." The first step is to establish a planning team that includes the best expertise available.

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