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SHRM-CP Certification Exam Questions 2023 - Day 25
1. Refer to the following scenario for the next 4 questions. A company has four full-time sales employees who receive a base salary, a 10% commission on new sales to existing clients, and a 30% commission on new sales to new clients. One sales employee has an existing, established territory. The clients were established prior to the salesperson's employment, and sales to these clients are strong and consistent, providing an excellent income for the employee. This employee makes no effort for new sales due to satisfaction with the current income level. The other three sales employees are in new territories and work hard to make sales. Their income levels are lower than that of the first sales employee. Management believes that the current sales compensation structure is unfair and that the first sales employee is overpaid in comparison to the others. Additionally, the current structure does not provide any incentive for the first sales employee to obtain new clients. Management has requested the HR director to reduce the first sales employee's compensation to be consistent with that of the other three sales employees. Which action should the HR director take regarding the compensation structure?
A) A. Explain to management that changing the current system can impact morale and employees might leave.
B) B. Talk to the sales employees to ask their opinion about the current system.
C) C. Compare the current structure to the organizational strategy to evaluate alignment.
D) D. Conduct an assessment of the current compensation system to determine if it meets the needs of employees.
2. Which action should the HR director take to make sure that the sales compensation structure is internally and externally equitable?
A) A. Use valid external wage information and the organization's strategy to develop a structure that compensates employees for performance.
B) B. Contact other organizations in the same geographic region and ask about their salary structure for sales employees.
C) C. Purchase three external wage surveys and ask management and the employees to decide what is equitable.
D) D. Use external wage information to recommend a commission-only compensation structure that is aligned with industry standards.
3. Which action should the HR director take if management is interested in exploring other compensation systems?
A) A. Hire a compensation consultant to design a number of different systems for management to choose from.
B) B. Analyze, evaluate, and price the jobs and compare how various compensation systems align with the organization's strategy.
C) C. Explain the difference between a salary structure and a commission structure and recommend that the structure be changed to commission-only.
D) D. Contact an outside vendor that specializes in compensation structures and have someone speak to management about the various systems.
4. Management recommends that the first sales employee be paid a straight salary, since the employee is not generating new sales from new clients. What action should the HR director take to address this recommendation?
A) A. Ignore the request and hope management forgets about the recommendation.
B) B. Agree with management and change the employee to a straight salary.
C) C. Explain how it might make the employee feel singled out and disengaged.
D) D. Share an analysis of the benefits of a commission structure aligned with business goals.
5. What is the first step in evidence-based decision making (EBDM)?
A) Phrasing the problem in the form of a question to be answered
B) Looking for logical connections among the gathered data
C) Verifying the value of the activity to the organization
D) Identifying good, reliable sources of data
6. Data Sources Management has requested that HR conduct a focus group to better understand the results of a recent compensation survey. Which is the most important factor HR will want to consider when forming the focus groups?
A) The focus group facilitator should be well known to participants, preferably one of their managers.
B) Members should be a representative sample of the employee population.
C) Focus group objectives should be kept general to encourage the group to move in its own direction.
D) Participants should include only subject matter experts to ensure that the time is well spent.
7. What data-gathering method requires a face-to-face meeting?
A) Delphi technique
B) Trend and ratio analysis
C) Regression analysis
D) Nominal group technique
8. Which approach describes the form of data gathering in which experts take turns presenting their assumptions and refining a composite answer but never meet face to face?
A) Nominal group technique
B) Delphi technique
C) Trend analysis
D) Managerial estimates
9. Refer to the following scenario for the next 4 questions. During an accident investigation, an HR manager determines that the injured employee could not read the safety data sheet (SDS). The manager reviews the company's training database and discovers that 10% to 15% of the current employees possess poor reading comprehension and cannot read the lockout/tagout (LOTO) procedures for machinery or the SDS for hazardous chemicals. Upon further investigation, the HR manager learns that these employees ask coworkers for assistance with LOTO and MSDS. Fortunately the company has not had a major catastrophic injury or death related to these areas, although a review of historic data on employee injury rates indicates a high percentage of minor injuries involving chemical burns and skin abrasions. These injuries have resulted in a higher-than-average experience modification rate that has adversely impacted the company's workers' compensation insurance premiums. The HR manager decides to develop a reading literacy program to provide coaching and tutoring to raise the reading and comprehension levels for all employees, soliciting a local educational institution to develop these reading courses. Which criteria should the HR manager use to justify the proposed reading improvement program?
A) A. Comparison of on-the-job injury rates for employees whose reading levels are below the national average to the rates for employees at or above the national average
B) B. Comparison of cost-per-accident rate for employees whose reading levels are below the national average to the rate for employees at or above the national average
C) C. Comparison of average age of employees whose reading levels are below the national average to the age of employees at or above the national average
D) D. Comparison of annual performance evaluation data for employees whose reading levels are below the national average to those at or above the national average
10. What additional benefits could the company gain from successful implementation of the reading program?
A) A. The company could use this initiative to improve its employee brand and corporate social responsibility.
B) B. This could result in better communication between employees and management.
C) C. With positive reactions to the training, the company could institute additional employee improvement programs.
D) D. It could result in greater performance output per employee and higher levels of engagement.
A) A. Explain to management that changing the current system can impact morale and employees might leave.
B) B. Talk to the sales employees to ask their opinion about the current system.
C) C. Compare the current structure to the organizational strategy to evaluate alignment.
D) D. Conduct an assessment of the current compensation system to determine if it meets the needs of employees.
2. Which action should the HR director take to make sure that the sales compensation structure is internally and externally equitable?
A) A. Use valid external wage information and the organization's strategy to develop a structure that compensates employees for performance.
B) B. Contact other organizations in the same geographic region and ask about their salary structure for sales employees.
C) C. Purchase three external wage surveys and ask management and the employees to decide what is equitable.
D) D. Use external wage information to recommend a commission-only compensation structure that is aligned with industry standards.
3. Which action should the HR director take if management is interested in exploring other compensation systems?
A) A. Hire a compensation consultant to design a number of different systems for management to choose from.
B) B. Analyze, evaluate, and price the jobs and compare how various compensation systems align with the organization's strategy.
C) C. Explain the difference between a salary structure and a commission structure and recommend that the structure be changed to commission-only.
D) D. Contact an outside vendor that specializes in compensation structures and have someone speak to management about the various systems.
4. Management recommends that the first sales employee be paid a straight salary, since the employee is not generating new sales from new clients. What action should the HR director take to address this recommendation?
A) A. Ignore the request and hope management forgets about the recommendation.
B) B. Agree with management and change the employee to a straight salary.
C) C. Explain how it might make the employee feel singled out and disengaged.
D) D. Share an analysis of the benefits of a commission structure aligned with business goals.
5. What is the first step in evidence-based decision making (EBDM)?
A) Phrasing the problem in the form of a question to be answered
B) Looking for logical connections among the gathered data
C) Verifying the value of the activity to the organization
D) Identifying good, reliable sources of data
6. Data Sources Management has requested that HR conduct a focus group to better understand the results of a recent compensation survey. Which is the most important factor HR will want to consider when forming the focus groups?
A) The focus group facilitator should be well known to participants, preferably one of their managers.
B) Members should be a representative sample of the employee population.
C) Focus group objectives should be kept general to encourage the group to move in its own direction.
D) Participants should include only subject matter experts to ensure that the time is well spent.
7. What data-gathering method requires a face-to-face meeting?
A) Delphi technique
B) Trend and ratio analysis
C) Regression analysis
D) Nominal group technique
8. Which approach describes the form of data gathering in which experts take turns presenting their assumptions and refining a composite answer but never meet face to face?
A) Nominal group technique
B) Delphi technique
C) Trend analysis
D) Managerial estimates
9. Refer to the following scenario for the next 4 questions. During an accident investigation, an HR manager determines that the injured employee could not read the safety data sheet (SDS). The manager reviews the company's training database and discovers that 10% to 15% of the current employees possess poor reading comprehension and cannot read the lockout/tagout (LOTO) procedures for machinery or the SDS for hazardous chemicals. Upon further investigation, the HR manager learns that these employees ask coworkers for assistance with LOTO and MSDS. Fortunately the company has not had a major catastrophic injury or death related to these areas, although a review of historic data on employee injury rates indicates a high percentage of minor injuries involving chemical burns and skin abrasions. These injuries have resulted in a higher-than-average experience modification rate that has adversely impacted the company's workers' compensation insurance premiums. The HR manager decides to develop a reading literacy program to provide coaching and tutoring to raise the reading and comprehension levels for all employees, soliciting a local educational institution to develop these reading courses. Which criteria should the HR manager use to justify the proposed reading improvement program?
A) A. Comparison of on-the-job injury rates for employees whose reading levels are below the national average to the rates for employees at or above the national average
B) B. Comparison of cost-per-accident rate for employees whose reading levels are below the national average to the rate for employees at or above the national average
C) C. Comparison of average age of employees whose reading levels are below the national average to the age of employees at or above the national average
D) D. Comparison of annual performance evaluation data for employees whose reading levels are below the national average to those at or above the national average
10. What additional benefits could the company gain from successful implementation of the reading program?
A) A. The company could use this initiative to improve its employee brand and corporate social responsibility.
B) B. This could result in better communication between employees and management.
C) C. With positive reactions to the training, the company could institute additional employee improvement programs.
D) D. It could result in greater performance output per employee and higher levels of engagement.
1. Right Answer: C
Explanation: C is the best answer. An assessment should be completed, and the system must be compared to the organizational strategy. The system must also be equitable. A is incorrect. Organizations may need to change compensation structures to match the organizational strategy. B is incorrect. It may be only a part of the assessment process. D is incorrect. The primary goal should be to assess whether the compensation system fits the organizational strategy.
2. Right Answer: A
Explanation: A is the best answer. It uses external information along with the organizational strategy, and it is transparent to the employees, so they will understand how their performance will affect their compensation. B is incorrect, because it focuses on only external equity, not internal equity. Additionally, the wage information received may not be valid. C is incorrect, because it focuses on only external wage information. D is incorrect. The structure should be aligned with the organization's goals, not the industry's standards.
3. Right Answer: B
Explanation: B is the best answer. The HR director should evaluate the jobs, develop a comparison, and show how each system aligns to the organizational strategy. A is incorrect. This would only pass the responsibility on to a consultant and would not demonstrate the HR director's value. C is incorrect. The HR director should be prepared to provide information about other structures as well. D is incorrect. This is one reference that the HR director may use, but it is something that an assistant could arrange. There are better strategic ways to add value.
4. Right Answer: D
Explanation: D is the best response, because it demonstrates the HR director's ability to use objective information in consulting with management. A is incorrect. Ignoring a recommendation from management does not demonstrate the HR director's ability to provide consultation. B is incorrect. HR would be missing an opportunity to consult with management. C is incorrect. Changing only one employee's compensation structure and not changing the structure for other employees in the same job category could be discriminatory and demonstrates inequity.
5. Right Answer: A
Explanation: The first step in EBDM is to ask the question that will guide the subsequent search for relevant data. What problem are we trying to solve?
6. Right Answer: B
Explanation: Focus groups provide valuable data and elicit opinions that may be verified by surveying the larger employee population. They may also be used to elicit qualitative information that can help explain quantitative survey results. It is important to select members who are representative of the employee population at large and to appoint a moderator who is unrelated to the participants. Objectives should be specific so the organization gets the information it needs.
7. Right Answer: D
Explanation: The nominal group technique uses a variety of individuals associated with the industry to forecast ideas and assumptions. This technique requires that the individuals meet face to face. The Delphi technique is performed individually but anonymously and is therefore not performed face to face.
8. Right Answer: B
Explanation: In the Delphi technique, 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.
9. Right Answer: A
Explanation: A is the best response, as it identifies the specific reasons for on-the-job injuries that occur as a result of employees who cannot read at the national level for adults. The HR manager can use real data to show that employees who can read are able to avoid such dangerous situations or conditions. B is incorrect. Analyzing the cost-per-accident rate for each employee group will reveal only the cost of accidents occurring and will provide no significant information on trends or the causes of these accidents. C is incorrect. This information would not help justify a reading improvement program, as it provides no relevance to the situation. D is incorrect. Reviewing annual performance data does not provide any relevant information as to the causes or impacts of accidents. An annual performance rating is a review of an employee's performance and not an accurate measure of the impact of multiple repeated minor accidents upon the company's annual accident and medical insurance premiums.
10. Right Answer: A
Explanation: A is the best response. An enhanced employee brand can benefit the company greatly, both in the marketplace and by attracting and retaining high-potential employees. B is incorrect. Although this may be a side benefit, the scenario does not indicate that communication is an issue. Only the reading of instructions is an issue. C is incorrect, as initially it benefits the employees, not the company as a whole. D is incorrect. The scenario does not indicate that the output per employee is an issue, nor is there any data that suggests that this would result in higher output per employee.
Explanation: C is the best answer. An assessment should be completed, and the system must be compared to the organizational strategy. The system must also be equitable. A is incorrect. Organizations may need to change compensation structures to match the organizational strategy. B is incorrect. It may be only a part of the assessment process. D is incorrect. The primary goal should be to assess whether the compensation system fits the organizational strategy.
2. Right Answer: A
Explanation: A is the best answer. It uses external information along with the organizational strategy, and it is transparent to the employees, so they will understand how their performance will affect their compensation. B is incorrect, because it focuses on only external equity, not internal equity. Additionally, the wage information received may not be valid. C is incorrect, because it focuses on only external wage information. D is incorrect. The structure should be aligned with the organization's goals, not the industry's standards.
3. Right Answer: B
Explanation: B is the best answer. The HR director should evaluate the jobs, develop a comparison, and show how each system aligns to the organizational strategy. A is incorrect. This would only pass the responsibility on to a consultant and would not demonstrate the HR director's value. C is incorrect. The HR director should be prepared to provide information about other structures as well. D is incorrect. This is one reference that the HR director may use, but it is something that an assistant could arrange. There are better strategic ways to add value.
4. Right Answer: D
Explanation: D is the best response, because it demonstrates the HR director's ability to use objective information in consulting with management. A is incorrect. Ignoring a recommendation from management does not demonstrate the HR director's ability to provide consultation. B is incorrect. HR would be missing an opportunity to consult with management. C is incorrect. Changing only one employee's compensation structure and not changing the structure for other employees in the same job category could be discriminatory and demonstrates inequity.
5. Right Answer: A
Explanation: The first step in EBDM is to ask the question that will guide the subsequent search for relevant data. What problem are we trying to solve?
6. Right Answer: B
Explanation: Focus groups provide valuable data and elicit opinions that may be verified by surveying the larger employee population. They may also be used to elicit qualitative information that can help explain quantitative survey results. It is important to select members who are representative of the employee population at large and to appoint a moderator who is unrelated to the participants. Objectives should be specific so the organization gets the information it needs.
7. Right Answer: D
Explanation: The nominal group technique uses a variety of individuals associated with the industry to forecast ideas and assumptions. This technique requires that the individuals meet face to face. The Delphi technique is performed individually but anonymously and is therefore not performed face to face.
8. Right Answer: B
Explanation: In the Delphi technique, 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.
9. Right Answer: A
Explanation: A is the best response, as it identifies the specific reasons for on-the-job injuries that occur as a result of employees who cannot read at the national level for adults. The HR manager can use real data to show that employees who can read are able to avoid such dangerous situations or conditions. B is incorrect. Analyzing the cost-per-accident rate for each employee group will reveal only the cost of accidents occurring and will provide no significant information on trends or the causes of these accidents. C is incorrect. This information would not help justify a reading improvement program, as it provides no relevance to the situation. D is incorrect. Reviewing annual performance data does not provide any relevant information as to the causes or impacts of accidents. An annual performance rating is a review of an employee's performance and not an accurate measure of the impact of multiple repeated minor accidents upon the company's annual accident and medical insurance premiums.
10. Right Answer: A
Explanation: A is the best response. An enhanced employee brand can benefit the company greatly, both in the marketplace and by attracting and retaining high-potential employees. B is incorrect. Although this may be a side benefit, the scenario does not indicate that communication is an issue. Only the reading of instructions is an issue. C is incorrect, as initially it benefits the employees, not the company as a whole. D is incorrect. The scenario does not indicate that the output per employee is an issue, nor is there any data that suggests that this would result in higher output per employee.
80% DISCOUNT: SHRM-CP PRACTICE EXAMS Questions with detailed explanation 2023 - UPDATED
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