SHRM CP SITUATIONAL JUDGEMENT
EXAMINATION TEST 2026 QUESTIONS
WITH SOLUTIONS
◉ Analyze data related to the organization's mission, strategy, goals,
size, industry, and location and on talent availability. Answer: A
company has been giving its employees automatic pay increases
annually. Recently, however, production has decreased, resulting in less
profit. The president tasks HR with implementing a new goal-oriented
pay plan to incentivize employees to increase production.
HR designs a pay-for-performance plan and trains supervisors. HR also
sends an e-mail to all employees explaining the change, referring
employees with questions to their supervisor.
As part of the new program, goal development is handled by
supervisors. However, some supervisors feel that the change in pay
philosophy is unnecessary and tell employees that the new pay plan will
not work.
Twelve months pass, and, upon review of performance evaluations, HR
finds that some appraisals lack goals and do not objectively measure
employees' work performance. The results are recommended pay
increases that are subjective and unsubstantiated by metrics.
Rumors that pay increases will be provided to employees who are
favorites begin to impact morale, and work production continues to
decline. Leadership is disappointed with the results of using a pay-for-
performance system.
HR is instructed to temporarily revert to the original pay plan and
complete a further analysis of its continued viability. Employees are
satisfied; however, the reputation of the company and HR has suffered
by this rollout, and production has not increased and profits are still low.
,HR still believes that the cause of decreased production is the absence of
incentive pay. Which recommendation should the HR manager include
in a business case for an incentive pay program that would convince
leaders while rebuilding HR's credibility?
◉ Talk with the employees to understand their concerns and how
supervisors supported the change efforts. Answer: A company has been
giving its employees automatic pay increases annually. Recently,
however, production has decreased, resulting in less profit. The
president tasks HR with implementing a new goal-oriented pay plan to
incentivize employees to increase production.
HR designs a pay-for-performance plan and trains supervisors. HR also
sends an e-mail to all employees explaining the change, referring
employees with questions to their supervisor.
As part of the new program, goal development is handled by
supervisors. However, some supervisors feel that the change in pay
philosophy is unnecessary and tell employees that the new pay plan will
not work.
Twelve months pass, and, upon review of performance evaluations, HR
finds that some appraisals lack goals and do not objectively measure
employees' work performance. The results are recommended pay
increases that are subjective and unsubstantiated by metrics.
Rumors that pay increases will be provided to employees who are
favorites begin to impact morale, and work production continues to
decline. Leadership is disappointed with the results of using a pay-for-
performance system.
HR is instructed to temporarily revert to the original pay plan and
complete a further analysis of its continued viability. Employees are
,satisfied; however, the reputation of the company and HR has suffered
by this rollout, and production has not increased and profits are still low.
The president and the HR manager agree on a 90-day period to address
the problems related to workforce morale and the new pay plan. Which
is the best first step for the HR manager to identify the root cause of the
morale issues in order to develop a plan to address them?
◉ Identify organizational and departmental goals, specific employee
performance and behaviors, and meaningful metrics. Answer: A
company has been giving its employees automatic pay increases
annually. Recently, however, production has decreased, resulting in less
profit. The president tasks HR with implementing a new goal-oriented
pay plan to incentivize employees to increase production.
HR designs a pay-for-performance plan and trains supervisors. HR also
sends an e-mail to all employees explaining the change, referring
employees with questions to their supervisor.
As part of the new program, goal development is handled by
supervisors. However, some supervisors feel that the change in pay
philosophy is unnecessary and tell employees that the new pay plan will
not work.
Twelve months pass, and, upon review of performance evaluations, HR
finds that some appraisals lack goals and do not objectively measure
employees' work performance. The results are recommended pay
increases that are subjective and unsubstantiated by metrics.
Rumors that pay increases will be provided to employees who are
favorites begin to impact morale, and work production continues to
decline. Leadership is disappointed with the results of using a pay-for-
performance system.
, HR is instructed to temporarily revert to the original pay plan and
complete a further analysis of its continued viability. Employees are
satisfied; however, the reputation of the company and HR has suffered
by this rollout, and production has not increased and profits are still low.
Which approach should HR take first to encourage better alignment
between the organization and the employees in order for them to accept
and sustain the new pay system?
◉ Conduct training that includes role playing and different scenarios
that could arise in the employee meetings. Answer: A company has been
giving its employees automatic pay increases annually. Recently,
however, production has decreased, resulting in less profit. The
president tasks HR with implementing a new goal-oriented pay plan to
incentivize employees to increase production.
HR designs a pay-for-performance plan and trains supervisors. HR also
sends an e-mail to all employees explaining the change, referring
employees with questions to their supervisor.
As part of the new program, goal development is handled by
supervisors. However, some supervisors feel that the change in pay
philosophy is unnecessary and tell employees that the new pay plan will
not work.
Twelve months pass, and, upon review of performance evaluations, HR
finds that some appraisals lack goals and do not objectively measure
employees' work performance. The results are recommended pay
increases that are subjective and unsubstantiated by metrics.
Rumors that pay increases will be provided to employees who are
favorites begin to impact morale, and work production continues to
decline. Leadership is disappointed with the results of using a pay-for-
performance system.
EXAMINATION TEST 2026 QUESTIONS
WITH SOLUTIONS
◉ Analyze data related to the organization's mission, strategy, goals,
size, industry, and location and on talent availability. Answer: A
company has been giving its employees automatic pay increases
annually. Recently, however, production has decreased, resulting in less
profit. The president tasks HR with implementing a new goal-oriented
pay plan to incentivize employees to increase production.
HR designs a pay-for-performance plan and trains supervisors. HR also
sends an e-mail to all employees explaining the change, referring
employees with questions to their supervisor.
As part of the new program, goal development is handled by
supervisors. However, some supervisors feel that the change in pay
philosophy is unnecessary and tell employees that the new pay plan will
not work.
Twelve months pass, and, upon review of performance evaluations, HR
finds that some appraisals lack goals and do not objectively measure
employees' work performance. The results are recommended pay
increases that are subjective and unsubstantiated by metrics.
Rumors that pay increases will be provided to employees who are
favorites begin to impact morale, and work production continues to
decline. Leadership is disappointed with the results of using a pay-for-
performance system.
HR is instructed to temporarily revert to the original pay plan and
complete a further analysis of its continued viability. Employees are
satisfied; however, the reputation of the company and HR has suffered
by this rollout, and production has not increased and profits are still low.
,HR still believes that the cause of decreased production is the absence of
incentive pay. Which recommendation should the HR manager include
in a business case for an incentive pay program that would convince
leaders while rebuilding HR's credibility?
◉ Talk with the employees to understand their concerns and how
supervisors supported the change efforts. Answer: A company has been
giving its employees automatic pay increases annually. Recently,
however, production has decreased, resulting in less profit. The
president tasks HR with implementing a new goal-oriented pay plan to
incentivize employees to increase production.
HR designs a pay-for-performance plan and trains supervisors. HR also
sends an e-mail to all employees explaining the change, referring
employees with questions to their supervisor.
As part of the new program, goal development is handled by
supervisors. However, some supervisors feel that the change in pay
philosophy is unnecessary and tell employees that the new pay plan will
not work.
Twelve months pass, and, upon review of performance evaluations, HR
finds that some appraisals lack goals and do not objectively measure
employees' work performance. The results are recommended pay
increases that are subjective and unsubstantiated by metrics.
Rumors that pay increases will be provided to employees who are
favorites begin to impact morale, and work production continues to
decline. Leadership is disappointed with the results of using a pay-for-
performance system.
HR is instructed to temporarily revert to the original pay plan and
complete a further analysis of its continued viability. Employees are
,satisfied; however, the reputation of the company and HR has suffered
by this rollout, and production has not increased and profits are still low.
The president and the HR manager agree on a 90-day period to address
the problems related to workforce morale and the new pay plan. Which
is the best first step for the HR manager to identify the root cause of the
morale issues in order to develop a plan to address them?
◉ Identify organizational and departmental goals, specific employee
performance and behaviors, and meaningful metrics. Answer: A
company has been giving its employees automatic pay increases
annually. Recently, however, production has decreased, resulting in less
profit. The president tasks HR with implementing a new goal-oriented
pay plan to incentivize employees to increase production.
HR designs a pay-for-performance plan and trains supervisors. HR also
sends an e-mail to all employees explaining the change, referring
employees with questions to their supervisor.
As part of the new program, goal development is handled by
supervisors. However, some supervisors feel that the change in pay
philosophy is unnecessary and tell employees that the new pay plan will
not work.
Twelve months pass, and, upon review of performance evaluations, HR
finds that some appraisals lack goals and do not objectively measure
employees' work performance. The results are recommended pay
increases that are subjective and unsubstantiated by metrics.
Rumors that pay increases will be provided to employees who are
favorites begin to impact morale, and work production continues to
decline. Leadership is disappointed with the results of using a pay-for-
performance system.
, HR is instructed to temporarily revert to the original pay plan and
complete a further analysis of its continued viability. Employees are
satisfied; however, the reputation of the company and HR has suffered
by this rollout, and production has not increased and profits are still low.
Which approach should HR take first to encourage better alignment
between the organization and the employees in order for them to accept
and sustain the new pay system?
◉ Conduct training that includes role playing and different scenarios
that could arise in the employee meetings. Answer: A company has been
giving its employees automatic pay increases annually. Recently,
however, production has decreased, resulting in less profit. The
president tasks HR with implementing a new goal-oriented pay plan to
incentivize employees to increase production.
HR designs a pay-for-performance plan and trains supervisors. HR also
sends an e-mail to all employees explaining the change, referring
employees with questions to their supervisor.
As part of the new program, goal development is handled by
supervisors. However, some supervisors feel that the change in pay
philosophy is unnecessary and tell employees that the new pay plan will
not work.
Twelve months pass, and, upon review of performance evaluations, HR
finds that some appraisals lack goals and do not objectively measure
employees' work performance. The results are recommended pay
increases that are subjective and unsubstantiated by metrics.
Rumors that pay increases will be provided to employees who are
favorites begin to impact morale, and work production continues to
decline. Leadership is disappointed with the results of using a pay-for-
performance system.
