2026 PHR Exam Questions Answered
Correctly 2026 update
Differentiation leadership - CORRECT ANSWERS another key area to establishing competitive
advantage. It entails marketing products and services that are significantly different than offerings from
competing organizations. This method requires continuous improvement
Cost Leadership - CORRECT ANSWERS is the ability of an organization to offer the same
quality product or service
as the competition but at a lower price. Companies will often look for the best way to
produce goods and services with minimal inefficiencies and well-developed production
methods
Cost Focus - CORRECT ANSWERS is a strategy similar to cost leadership, but with emphasis on
a specific market. It
involves offering a quality product/service at a low price with a targeted market segment in
mind. Using the cost focus strategy helps an organization establish brand awareness more
readily in that market
Differentiation focus - CORRECT ANSWERS is a strategy like differentiation leadership, in that
they both offer
specific or custom products, but the differentiation focus strategy offers those specialized
products/services to a narrow and targeted market.
Profit and Loss - CORRECT ANSWERS The difference between revenue and expenses that
determine if the company made or lost money is
referred to as the
Revenue - CORRECT ANSWERS is the total amount of money brought in, measured over a
specific
time period.
Financial Projections - CORRECT ANSWERS are a collection of financial statements used to
forecast future expenses and
revenue
Income Statement - CORRECT ANSWERS displays expenses, revenue, and profit for a set time
period
Cash Flow Statement - CORRECT ANSWERS details incoming and outgoing cash
Balance Sheet - CORRECT ANSWERS shows business assets,
liabilities, and equity. External data included in the projection can include market growth rates,
historical growth trends in the market, and consumer demand
,Quality - CORRECT ANSWERS an organization plays a large role in the image, branding, and
reputation of the
organization to the public and consumers
Service Level Agreement (SLA) - CORRECT ANSWERS is a contract between at least two
parties, where one party (or
group) provides a service to another party (or group).
Customer-based - CORRECT ANSWERS SLA exists between a vendor and a customer. It details
the level of
service that will be delivered to the customer
internal - CORRECT ANSWERS SLA can exist between departments to outline the roles and
responsibilities of
the teams so that there is a clear understanding of expectations.
Multilevel - CORRECT ANSWERS SLA is divided into different tiers or sections based on the
level of access or
service provided.
Fixed Cost (FC) - CORRECT ANSWERS do not change in relation to the activity of a business;
they remain the same
regardless of how much or how little a company produces.
Variable Costs - CORRECT ANSWERS do change based on business
activity. These costs increase as production increases, and lower as production shrinks.
Supply and Demand - CORRECT ANSWERS refers to the economic relationship involving the
cost of a product,
product availability, and buyer demand for the product.
Supply - CORRECT ANSWERS is the amount of the product that is
being sold on the market by companies producing that item or service. When the price point is high,
it is profitable for an organization to increase supply.
Demand - CORRECT ANSWERS is how many goods buyers
are willing to purchase at different prices
Net Income - CORRECT ANSWERS The amount of money that a business makes after
deducting the costs of raw goods/materials,
taxes, wages, and operating expenses is its
Strategic Plan - CORRECT ANSWERS defines and communicates the direction that an
organization will take over the
course of three to five years.
Forming The Strategy - CORRECT ANSWERS Assess the current situation using internal and
external audits
, - CORRECT ANSWERS 1. Which of the following individuals is MOST appropriate to conduct
exit interviews?
a. Direct supervisors
b. Senior executives
c. A third party
d. Departmental managers
- CORRECT ANSWERS 2. Sandra is the head of a small human resources department. She
wants to implement a
human resource information system, so she begins by commissioning a needs analysis. What
is her next step?
a. Researching possible systems
b. Asking for permission to implement the system
c. Identifying possible conflicts with other organizational systems
d. Creating a timeline for implementation
- CORRECT ANSWERS 3. Which of the following types of employee rating systems is usually
better for a smaller
group of employees but can be difficult to organize with a larger group?
a. Behaviorally anchored rating scales
b. Forced distribution
c. Ranking
d. Competency-based
Refer to the following for questions 4 - 5:
You are a human resources manager for a midsized technology company with a
diverse employee group—there are many employees from India, some are from
Russia, and others are American. Employees tend to stay within their own cultural
groups for socializing and even for project collaboration. This has created a siloed
work environment, resulting in minimal communication and inefficient work
processes.
- CORRECT ANSWERS
- CORRECT ANSWERS 4. What would be a creative and effective way to improve
communication across the
organization?
a. Pair up individuals from different cultures on specific work assignments.
b. Require language classes for each of the dialects spoken in the organization.
c. Offer cultural sensitivity training for the entire organization.
Correctly 2026 update
Differentiation leadership - CORRECT ANSWERS another key area to establishing competitive
advantage. It entails marketing products and services that are significantly different than offerings from
competing organizations. This method requires continuous improvement
Cost Leadership - CORRECT ANSWERS is the ability of an organization to offer the same
quality product or service
as the competition but at a lower price. Companies will often look for the best way to
produce goods and services with minimal inefficiencies and well-developed production
methods
Cost Focus - CORRECT ANSWERS is a strategy similar to cost leadership, but with emphasis on
a specific market. It
involves offering a quality product/service at a low price with a targeted market segment in
mind. Using the cost focus strategy helps an organization establish brand awareness more
readily in that market
Differentiation focus - CORRECT ANSWERS is a strategy like differentiation leadership, in that
they both offer
specific or custom products, but the differentiation focus strategy offers those specialized
products/services to a narrow and targeted market.
Profit and Loss - CORRECT ANSWERS The difference between revenue and expenses that
determine if the company made or lost money is
referred to as the
Revenue - CORRECT ANSWERS is the total amount of money brought in, measured over a
specific
time period.
Financial Projections - CORRECT ANSWERS are a collection of financial statements used to
forecast future expenses and
revenue
Income Statement - CORRECT ANSWERS displays expenses, revenue, and profit for a set time
period
Cash Flow Statement - CORRECT ANSWERS details incoming and outgoing cash
Balance Sheet - CORRECT ANSWERS shows business assets,
liabilities, and equity. External data included in the projection can include market growth rates,
historical growth trends in the market, and consumer demand
,Quality - CORRECT ANSWERS an organization plays a large role in the image, branding, and
reputation of the
organization to the public and consumers
Service Level Agreement (SLA) - CORRECT ANSWERS is a contract between at least two
parties, where one party (or
group) provides a service to another party (or group).
Customer-based - CORRECT ANSWERS SLA exists between a vendor and a customer. It details
the level of
service that will be delivered to the customer
internal - CORRECT ANSWERS SLA can exist between departments to outline the roles and
responsibilities of
the teams so that there is a clear understanding of expectations.
Multilevel - CORRECT ANSWERS SLA is divided into different tiers or sections based on the
level of access or
service provided.
Fixed Cost (FC) - CORRECT ANSWERS do not change in relation to the activity of a business;
they remain the same
regardless of how much or how little a company produces.
Variable Costs - CORRECT ANSWERS do change based on business
activity. These costs increase as production increases, and lower as production shrinks.
Supply and Demand - CORRECT ANSWERS refers to the economic relationship involving the
cost of a product,
product availability, and buyer demand for the product.
Supply - CORRECT ANSWERS is the amount of the product that is
being sold on the market by companies producing that item or service. When the price point is high,
it is profitable for an organization to increase supply.
Demand - CORRECT ANSWERS is how many goods buyers
are willing to purchase at different prices
Net Income - CORRECT ANSWERS The amount of money that a business makes after
deducting the costs of raw goods/materials,
taxes, wages, and operating expenses is its
Strategic Plan - CORRECT ANSWERS defines and communicates the direction that an
organization will take over the
course of three to five years.
Forming The Strategy - CORRECT ANSWERS Assess the current situation using internal and
external audits
, - CORRECT ANSWERS 1. Which of the following individuals is MOST appropriate to conduct
exit interviews?
a. Direct supervisors
b. Senior executives
c. A third party
d. Departmental managers
- CORRECT ANSWERS 2. Sandra is the head of a small human resources department. She
wants to implement a
human resource information system, so she begins by commissioning a needs analysis. What
is her next step?
a. Researching possible systems
b. Asking for permission to implement the system
c. Identifying possible conflicts with other organizational systems
d. Creating a timeline for implementation
- CORRECT ANSWERS 3. Which of the following types of employee rating systems is usually
better for a smaller
group of employees but can be difficult to organize with a larger group?
a. Behaviorally anchored rating scales
b. Forced distribution
c. Ranking
d. Competency-based
Refer to the following for questions 4 - 5:
You are a human resources manager for a midsized technology company with a
diverse employee group—there are many employees from India, some are from
Russia, and others are American. Employees tend to stay within their own cultural
groups for socializing and even for project collaboration. This has created a siloed
work environment, resulting in minimal communication and inefficient work
processes.
- CORRECT ANSWERS
- CORRECT ANSWERS 4. What would be a creative and effective way to improve
communication across the
organization?
a. Pair up individuals from different cultures on specific work assignments.
b. Require language classes for each of the dialects spoken in the organization.
c. Offer cultural sensitivity training for the entire organization.
