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PHR® and SPHR®
Professional in Human
Resources

Complete Practice Tests

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Sandra M. Reed, SPHR


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This one is for you.

Acknowledgments

I used to think that the creative process was quite romantic in many ways. After all, as inhabitants of a quirky world made up of inspired leaps and profound discoveries, writers, I thought, must guard their process closely. I could not have been more wrong! Taking a concept from idea to delivery requires the (sometimes) herculean efforts of many talented individuals, the least of which is the author. To the editors Kenyon Brown, Kelly Talbot, Kim Wimpsett, Karin Hill, Pete Gaughan, and the countless other hands that touched this text, I give my utmost respect and gratitude. Their thoughtful guidance and professionalism carried this book through many iterations, contributing to what I believe is the best version of this material to date!

To my clients, I am equally indebted, for it is in their people-and-process-centric laboratories that I am able to explore so many of the critical HR systems and behavioral science practices that inform the basis of the PHR and SPHR exams.

I would also like to acknowledge the consummate professionals at the Human Resource Certification Institute. Their dedication of purpose to the field of HR is clearly embedded in their quest for excellence, and I feel privileged to help bring the HRBoK to life through applied practice.

Finally, Ralph Waldo Emerson noted, “In my walks, every man I meet is my superior in some way, and in that I learn from him.” This could not be more true of my family, friends, mentors, clients, colleagues, employees, coaches, and students, who daily show me yet another perspective of the important work of our lives. I am fortunate to know each of you.

About the Author

Sandra M. Reed, SPHR, has more than 20 years of experience in the field of human resources. With a bachelor's degree in I-O psychology and her graduate work in organizational leadership in progress, she has led the work of many professionals in the development of the Human Resource Body of Knowledge. This culminated in the bringing together of HR thought leaders of today to share their insights and technical proficiencies in HRCI's A Guide to the Human Resource Body of Knowledge (HRBoK), Second Edition, published in 2017.

Sandra is a certified practitioner of the MBTI Personality Assessment and an endorsed trainer of the Leadership Training for Managers (LTM) program with Dale Carnegie. Additionally, she leads a team of human resource professionals for a manufacturing company in the Central Valley of California, where she is also an active member of the local HR community.

Find her on the Web at http://epochresources.com.

About the Technical Editor

Karin M. Hill, MBA, SPHR, SHRM-SCP, acquired extensive experience managing human resources and organizational development departments. Her HR experience—from entry level to executive—was gained while working for international companies, an outplacement/career development/team-building consulting business, and major Midwest health systems in St. Louis and Kansas.

She earned her BA in journalism and government from Southern Illinois University at Edwardsville and her MBA from St. Louis University. Hill is currently on the continuing education adjunct faculty at Midlands Technical College, providing facilitation in the leadership and employee development areas. She also serves as a human resources and organizational development consultant for small businesses in the Columbia, South Carolina, area. She holds several national training certifications as well as the SPHR and SHRM-SCP certifications.

Currently, Hill consults with and provides leadership, employee, and customer service training for multiple organizations, including manufacturing and service industries, healthcare and related health services, insurance companies, educational institutions, and government entities and agencies at the city, county, and state levels.

Introduction

Congratulations on your decision to pursue the Professional in Human Resources (PHR)® or Senior Professional in Human Resources (SPHR)® credential. With more than 500,000 certified professionals in more than 120 countries, you join a community of dedicated human resource leaders across the globe. Furthermore, achieving this designation distinguishes you as an expert in the field, one with both the knowledge and competencies to drive organizational results. This in turn develops the practice of human resources overall, as organizations become more aware of the practical value HR provides when efforts are aligned with business goals. In short, your successful certification and application of the knowledge acquired will help grow the industry.

The PHR and SPHR credential is offered by the Human Resource Certification Institute (HRCI®), a not-for-profit organization based in Alexandria, Virginia. HRCI® has been certifying HR professionals for more than 40 years and currently offers eight human resource exams. The PHR and SPHR exams are both accredited by the National Commission for Certifying Agencies (NCCA), an agency that sets rigorous standards to maintain quality and integrity within the certification process.

Preparing for an exam of this magnitude requires a systematic approach that involves the ability to demonstrate knowledge within an applied context. However, knowledge and competencies are not enough to pass these tests. The PHR and SPHR exams are noted not only for the difficult content but also for the unique format of questions, so it is imperative that you prepare for the question structures. Whether you are in the final stages of preparation or just beginning your preparation journey, there is value in taking the time to work with practice exams.

Book Structure

This book is primarily structured around two major resources: HRCI’s Exam Content Outlines (ECO) and HRCI’s A Guide to the Human Resource Body of Knowledge (HRBoK®), Second Edition. This book tests your knowledge of the responsibilities covered by the exam domains with the goal of exposing you to questions formatted similarly to those you would find on the actual exam. The more questions that you expose yourself to, the better prepared you will be on exam day.

The PHR exam content makes up the first part of this book. Questions are focused on the operational nature of a generalist’s day-to-day activities, such as implementing and managing typical HR programs and systems. The question content is focused on the five functional areas of the exam, as shown in Table 1. It is useful to note that on the PHR exam, more than half the content is related to the functional areas of Business Management and Employee & Labor Relations. If you are on an accelerated preparation path, it is recommended that you start with these sections and seek perfection in your scores. The first section ends with a full-length PHR practice exam.

TABLE 1 PHR Exam Weighting by Functional Area

Functional Area Title % of Exam Content
1 Business Management 20%
2 Talent Planning & Acquisition 16%
3 Learning & Development 10%
4 Total Rewards 15%
5 Employee & Labor Relations 39%

HRCI notes on its website that “the PHR is for the HR professional who has experience with program implementation, has a tactical/logistical orientation, is accountable to another HR professional within the organization, and has responsibilities that focus on the HR department rather than the whole organization.”

The second section of the book is dedicated to the SPHR content outline. A senior-level HR professional is expected to be well versed in the strategic development of HR programs and systems that are aligned with business drivers and outcomes. As shown in Table 2, the exam is weighted with 60 percent of content in Leadership & Strategy and Employee Relations & Engagement. Knowing this will allow for more focused preparation activities. This section also includes a full-length SPHR-specific practice exam.

TABLE 2 SPHR Exam Weighting by Functional Area

Functional Area Title % of Exam Content
1 Leadership & Strategy 40%
2 Talent Planning & Acquisition 16%
3 Learning & Development 12%
4 Total Rewards 12%
5 Employee Relations & Engagement 20%

Explanations are provided in the appendixes to help you learn the concepts.

The SPHR exam is focused on the business, rather than at a department level. HRCI notes that “the SPHR demonstrates your mastery of the strategic and policy-making aspects of HR management as practiced in the U.S. The credential is designed for big-picture thinkers responsible for planning rather than implementing HR policy. Organizations seek out SPHR professionals for their proven accountability for HR department goals, for breadth and depth of knowledge in all HR disciplines, and for understanding business issues beyond the HR function.”

Both the PHR and SPHR exams are three hours in length and include 175 questions—150 questions that are scored and 25 questions that are being validated for future use. You will not know which questions are being scored and which are part of the 25 being pretested. Each domain includes a summary statement, a list of short exam responsibility statements, and a broader list of knowledge requirements. These are listed at the beginning of each chapter.

Finally, of the thousands of questions available on exam day related to the breadth of content covered in the ECOs, no two exams are exactly alike. These computerized tests will deliver to you a 175-question experience that is unique. Some candidates may see an abundance of questions related to union organizing, for example, while others may see only one or two questions on this content. This means that you may feel both over-prepared and under-prepared on exam day. Try not to worry about this! Looking at the intense preparation process through a long-view lens will reinforce the reason you are seeking certification in the first place—for future application of best practices on the job. We wish you the best of luck as you strive for excellence in our industry and for your organization.

PART I
Professional in Human Resources (PHR)

Chapter 1
PHR Practice Area 1: Business Management

THE PHR EXAM CONTENT FROM THE BUSINESS MANAGEMENT FUNCTIONAL AREA COVERED IN THIS CHAPTER FOCUSES ON “USING INFORMATION ABOUT THE ORGANIZATION AND BUSINESS ENVIRONMENT TO REINFORCE EXPECTATIONS, INFLUENCE DECISION-MAKING, AND AVOID RISK.” IT CONSISTS OF THE FOLLOWING RESPONSIBILITIES:

IN ADDITION TO THE RESPONSIBILITIES LISTED ABOVE, AN INDIVIDUAL TAKING THE PHR EXAM SHOULD HAVE WORKING KNOWLEDGE OF THE FOLLOWING, USUALLY DERIVED THROUGH PRACTICAL EXPERIENCE:

 

  1. Which of the following is not one of the four elements of the acronym VUCA?

    1. Visionary
    2. Unemployed
    3. Clarity
    4. All of the above
  2. Which option is the correct term describing the near-term activities involved in transferring the product or service from the business to the customer?

    1. Sales
    2. Marketing
    3. Placement
    4. Both A and B
  3. Managing payroll and recruiting for open positions are examples of which human resource role?

    1. Strategic
    2. Operational
    3. Administrative
    4. Employee relations
  4. A conduct statement is most likely to be found in which corporate document?

    1. Employee handbook
    2. Ethics policy
    3. Injury and Illness Prevention Plan (IIPP)
    4. All of the above
  5. Which of the following tools would HR most likely recommend to an employer who wants to tailor an employee wellness program to the needs of the workforce?

    1. Workers’ comp aggregate report
    2. Utilization reports
    3. Employment trends
    4. Workforce analytics
  6. Reengineering, corporate restructuring, and workforce expansion are all examples of what type of management strategy?

    1. Change
    2. Authoritarian
    3. Risk
    4. Transformational
  7. The employer you work for is looking to open a large paint facility in a neighboring state. It will be the second location, with corporate headquarters continuing to be home base. Which change management structural intervention will HR most likely need to address?

    1. Reengineering
    2. Corporate restructuring
    3. Workforce reduction
    4. Workforce expansion
  8. Which metric should you use to communicate to an executive team the expenses associated with recruiting and selection?

    1. Cost per hire
    2. Time to hire
    3. Replacement cost
    4. Accession rate
  9. A supervisor complained to HR that one of his employees is often tardy. When asked about it, the employee said that he thought being on time wasn’t really that important, as his supervisor seemed to come and go as he pleased. The supervisor himself is a nonexempt employee with a regular schedule. What should HR recommend as a first step?

    1. Discipline the employee for violating the attendance policy.
    2. Discipline both the employee and the supervisor for violating the attendance policy.
    3. Coach the supervisor on modeling appropriate workplace behaviors and communicating proper standards.
    4. Provide the employee and supervisor with the company’s standards of conduct.
  10. How do employee handbooks contribute to an organization’s risk management plan?

    1. Employee handbooks are required by law.
    2. Employee handbooks help protect the organization from potential risk.
    3. Employee handbooks act as an insurance policy by identifying procedures and checklists.
    4. Employee handbooks are the only way to defend against unlawful discrimination claims.
  11. Why is it important for HR professionals to keep up to date on employment litigation statistics?

    1. It is the first step toward compliance with labor laws.
    2. These statistics provide insight into updated labor laws in response to cultural or technological trends.
    3. Doing so helps to predict unemployment trends.
    4. These statistics help to predict areas of vulnerability and recommend risk management strategies.
  12. Which of the following usually present the most risk of a discrimination charge being filed with the Equal Employment Opportunity Commission?

    1. Retaliation, race, disability
    2. Race, age, disability
    3. Sex, race, age
    4. Race, ethnicity, national origin
  13. What is the purpose of a legislative committee?

    1. To unify members of the U.S. Congress either for or against a specific bill
    2. To sponsor a bill, agreeing to seek support of its passage
    3. To study a bill and determine the likelihood that the bill will be able to pass a vote in the full body of Congress
    4. To make changes to a bill prior to its forwarding to the full body for a vote
  14. An activity in which anybody can participate to influence laws and regulations is known as which of the following?

    1. Lobbying
    2. Administrative law
    3. Corporate governance
    4. Social responsibility
  15. A code of conduct is to _____________ as an ethical statement is to organizational standards of behavior.

    1. Employee professionalism
    2. Policies
    3. Work rules
    4. Employee standards of behavior
  16. An assembly-line configuration and standard operating procedures for taking a sales call are examples of which of the following organizational functions?

    1. Scheduling
    2. Production layout
    3. Capacity
    4. Facility location
  17. Considering inputs such as available material and labor is an activity of which organizational function?

    1. Capacity
    2. Production layout
    3. Scheduling
    4. Facility location
  18. The evolution from pagers to cellular phones is an example of which of the following forces in the external business environment?

    1. Availability of skilled workers in the labor force
    2. Legal and regulatory activity
    3. The economic environment
    4. Technology developments driving industry change
  19. In which of the following ways does the finance department contribute to the achievement of HR outcomes?

    1. A financial analyst can provide information related to incentives for customers to buy.
    2. A financial analyst can provide models to predict the number of employees needed at different production levels.
    3. A financial analyst can aid in tracking real-time inventory related to sales.
    4. The finance department can process employee payroll.
  20. Forecasting is most likely to be used when a company is doing which of the following activities?

    1. Conducting a feasibility study
    2. Creating an annual budget
    3. Completing an environmental scan
    4. Developing a training matrix
  21. The company for which you work has partners who have agreed to share responsibility for managing the business on a day-to-day basis. This is an example of which of the following business structures?

    1. Limited liability partnership
    2. Joint venture
    3. General partnership
    4. Corporation
  22. Under what conditions would employees be most receptive to organizational change?

    1. If they understand the benefits of the changes to their own working conditions
    2. If they receive a pay increase as the result of the change
    3. If the organizational change does not directly affect their own jobs
    4. Employees are never initially receptive to change.
  23. Fill in the blank: Technological challenges are to project management as __________ challenges are to change management.

    1. Financial
    2. Human
    3. Risk
    4. Environmental
  24. During the strategic planning session, the organizational leaders of a custom cabinet shop identified that there were serious quality defects in the wood being sourced from an outside vendor. Additionally, these flaws were contributing to the reason existing product packaging was no longer adequate to properly prepare the product for freight transport. This company has identified problems in which business function?

    1. Shipping and receiving
    2. Inventory
    3. Supply chain
    4. Purchasing
  25. A company objective is to help managers perform through a series of 90-day goals. The goals will be set by the executive team, and managers will be expected to report weekly progress via email. Which of the following internal relationships should HR cultivate to help the company achieve this strategic objective?

    1. Twice-a-month meetings with the managers to identify and support any workforce changes that will need to occur to achieve the goals
    2. Weekly planning sessions with the executive team to address any obstacles that hinder goal achievement
    3. Bi-weekly meetings with the CFO to advocate for the financial resources management needs to achieve the goals
    4. Weekly meetings with the HR generalists to get updated on their own progress toward department goals
  26. Which of the following is an example of a human capital measurement?

    1. Employee attitudes
    2. Employee capabilities
    3. Productivity
    4. All of the above
  27. A values statement does not need to include which of the following?

    1. Standards of behavior
    2. Ethical components
    3. Action items
    4. A definition of what is important to the company
  28. A painting company has decided to organize its services by industrial and residential. It plans to hire division directors to form key account teams in both sales and marketing but keep operations as its own division. This is an example of which strategy?

    1. Divisional
    2. Regional market
    3. Organizational development
    4. Business unit
  29. Inventory, employees, and accounts receivable are all examples of what?

    1. Assets
    2. Liabilities
    3. Capital
    4. Competitive advantage
  30. Which number is the mode in the following sequence: 1334555?

    1. 1
    2. 3.7
    3. 5
    4. 26
  31. One of the corporate values of your company is the concept of “Ohana” that is centered around behaviors such as transparency and trust. Which of the following conditions would you expect to find at this organization?

    1. Rules prohibiting disclosures of pay rates
    2. Encouragement to challenge the status quo
    3. Generous family leave policies
    4. Practices that encourage diversity
  32. The large company that you work for has decided that addressing the leadership needs of their organization is necessary to advance their growth objectives. Which of the following should be your first priority?

    1. Hiring strong leaders
    2. Replacing poor leaders
    3. Evaluating current leaders
    4. Identifying future leaders
  33. Which of the following is the most likely reason that some organizational leaders struggle with ethical decision-making?

    1. Most leaders have personalities that make them inclined to test boundaries.
    2. Ethics do not lead to measurable outcomes.
    3. Laws are not consistent from country to country or state to state.
    4. Not everyone shares the same set of values.
  34. A startup company is focused on innovation, driven by its research and development efforts. The skillsets necessary for its workforce do not currently exist in the available labor market. Which of the following strategies should you recommend?

    1. Offer paid internships to high school students in the communities where you operate.
    2. Pay above market value for your research and development team.
    3. Invest in training and development for your management staff.
    4. Encourage a creative, nontraditional workplace culture.
  35. The executive team at a major retailer has decided that it must close 68 stores nationwide, with an anticipated loss of more than 10,000 jobs. Which of the following external partnerships would have the biggest impact on the laid-off workers?

    1. County unemployment offices
    2. State and local political leadership
    3. Local staffing agencies
    4. Local universities and/or training centers
  36. Who is hiring, what price points are selling, and what are the current trends and cultural factors are questions answered by a scan of which of the following?

    1. Industry practices and developments
    2. Economic environment
    3. The general business environment
    4. The legal and regulatory environment
  37. HR provided the strategic planning committee with a report showing the unemployment rate at the state and county levels and the availability of labor by skillset. The committee is most likely preparing for which of the following planning activities?

    1. A training needs assessment
    2. Strategic workforce planning
    3. A strategic compensation review
    4. The launch of a diversity management team
  38. Which of the following is a major characteristic of evidence-based management?

    1. Conducting a training needs assessment
    2. Launching a diversity management team
    3. Completing a strategic compensation review
    4. Making decisions using scientific evidence
  39. Which evidence would you use to make a decision about how many employees a company may need during peak season?

    1. Scientific evidence
    2. Experiential evidence
    3. Industry evidence
    4. Strategic evidence
  40. In developing the exam content outline, a major exam administrator identifies subject-matter experts to review the existing exam content and anonymously make suggestions for changes. A facilitator gathers the feedback and then sends out proposed changes to each member for revisions and comments. The facilitator repeats this process round after round until a consensus is reached. This company is employing which of the following decision-making methods?

    1. Evidence-based management
    2. SME processing
    3. Delphi technique
    4. Nominal group process
  41. Which of the following is most likely to increase employee commitment to change?

    1. Increasing employee trust in management
    2. Increasing associated pay levels with new responsibilities and tasks
    3. Terminating employees who have bad attitudes toward the change
    4. Adding technological components that increase employee skills
  42. Purchasing employment practice liability insurance (EPLI) is what type of risk management technique?

    1. Avoid
    2. Transfer
    3. Mitigate
    4. Accept
  43. HR is most likely to serve in what type of role related to an employer’s use of workforce analytics?

    1. Administrative
    2. Technical
    3. Legal
    4. Advisory
  44. For what purpose is a churn model most likely to be used?

    1. To understand why benefit costs continue to increase
    2. To predict which way employees may vote for (or against) union representation
    3. To identify the root cause of turnover
    4. To improve overall employee services
  45. Suppliers, employees, and local community groups are all examples of which of the following?

    1. Communities of interest
    2. Protected whistleblowers
    3. Company shareholders
    4. Company stakeholders
  46. A code of ethics, accounting rules, and sustainability guidelines are all examples of what type of company behavior?

    1. Legal compliance
    2. Ethical management practices
    3. Corporate governance
    4. Diversity management
  47. Which of the following technological tools would best help HR manage résumés, training documents, and service awards?

    1. A human resource information system (HRIS)
    2. An applicant tracking system (ATS)
    3. Workforce analytics
    4. Cloud computing
  48. The collective knowledge, skills, and abilities of an organization’s employees based upon which an employer may compete is best known as which of the following?

    1. Core competencies
    2. Strategic workforce planning
    3. Human capital
    4. Head count
  49. Your favorite news outlet just announced that interest rates will be going up in the next calendar quarter. This is an example of which of the following?

    1. A leading economic indicator
    2. A key performance indicator
    3. An element of the consumer price index
    4. An effect on the labor rate
  50. You have tasked a department with coming up with a proposed schedule for the holiday season. You are asking them in effect to form which of the following?

    1. An autonomous review
    2. An evidenced-based decision
    3. A team review
    4. A group consensus