SHRM-CP EXAM 2025/2026 QUESTIONS
AND ANSWERS 100% PASS
Turnover Calculation - ANS Turnover Rate = # of separations / Avg. # of employees x 100
The Principal Agent Problem - ANS does as little as possible because the pay or reward is the
same no matter what the outcome is
Ishikawa Diagram - ANS AKA Fishbone Diagram
Categorizes potential causes of a problem to identify its root causes
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Golden Handshake - ANS Payment given to someone who is laid off or retires early
Golden Handcuffs - ANS (mainly benefits) payments provided by an employer to discourage
an employee from taking employment elsewhere
Golden Parachute - ANS Large payment or financial compensation guaranteed to a company
executive should they be dismissed bc of a merger or takeover
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
,Golden Life Jacket - ANS Large compensation package offered to executives going through a
merger to induce them to study
Balanced Scorecard - ANS 4 different ways
1. Financial
2. Customers
3. Internal (internal processes)
4. People
Two core areas for success of HR Professionals - ANS 1. Basic understanding and knowledge
of core competencies
2. Being able to translate these competencies to business success
Green Circle Employees - ANS individuals that fall below the minimum of the organization's
pay range
Concurrent Validity - ANS evidence that can be gathered to defend the use of a test for
predicting other outcomes
Face validity - ANS Making a decision on the appropriateness of a test based on the
appearance rather than objective criteria
Fair Labor Standards act of 1938 - ANS Act that set up basic min. wage and overtime pay
Buffer Stock - ANS Stock accrued by gov. when supplies are plentiful and prices are cheap
and used when supplies are short in effort to stabilize the price (also known as reverse stock)
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
, Hardship premiums - ANS Extra compensation for difficult living conditions
Employee Buyout (EBO) - ANS when employees pull together money to buy a majority stake
in the company
Cliff vesting - ANS when an employee becomes fully vested at a specified time, rather than
partially vested over long period of time
Graded Vesting - ANS schedule used for vesting over 5-15 yrs
RIPA - ANS Retirement Income Policy Act
Employee Retirement Income Security Act of 1974
(ERISA) - ANS federal law that sets minimum standards for most voluntarily established
pension and health plans in private industry to provide protection for individuals in these plans
Form 5500 filing - ANS Annual return that is used to report information regarding employee
benefit plans
Feather bedding - ANS Deliberately limit production or retain excess staff, in an attempt to
create jobs just for the sake of creating jobs, usually result of union contract
Territory rule - ANS employees must follow tax laws in the country that they are in
Salting - ANS tactic where union hires someone to apply for a job at a targeted company, and
then the person will begin unionizing efforts
Hay Market Affair - ANS Aftermath of bombing, May 4th 1886
3 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
AND ANSWERS 100% PASS
Turnover Calculation - ANS Turnover Rate = # of separations / Avg. # of employees x 100
The Principal Agent Problem - ANS does as little as possible because the pay or reward is the
same no matter what the outcome is
Ishikawa Diagram - ANS AKA Fishbone Diagram
Categorizes potential causes of a problem to identify its root causes
\\\\\
------->
/////
Golden Handshake - ANS Payment given to someone who is laid off or retires early
Golden Handcuffs - ANS (mainly benefits) payments provided by an employer to discourage
an employee from taking employment elsewhere
Golden Parachute - ANS Large payment or financial compensation guaranteed to a company
executive should they be dismissed bc of a merger or takeover
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
,Golden Life Jacket - ANS Large compensation package offered to executives going through a
merger to induce them to study
Balanced Scorecard - ANS 4 different ways
1. Financial
2. Customers
3. Internal (internal processes)
4. People
Two core areas for success of HR Professionals - ANS 1. Basic understanding and knowledge
of core competencies
2. Being able to translate these competencies to business success
Green Circle Employees - ANS individuals that fall below the minimum of the organization's
pay range
Concurrent Validity - ANS evidence that can be gathered to defend the use of a test for
predicting other outcomes
Face validity - ANS Making a decision on the appropriateness of a test based on the
appearance rather than objective criteria
Fair Labor Standards act of 1938 - ANS Act that set up basic min. wage and overtime pay
Buffer Stock - ANS Stock accrued by gov. when supplies are plentiful and prices are cheap
and used when supplies are short in effort to stabilize the price (also known as reverse stock)
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
, Hardship premiums - ANS Extra compensation for difficult living conditions
Employee Buyout (EBO) - ANS when employees pull together money to buy a majority stake
in the company
Cliff vesting - ANS when an employee becomes fully vested at a specified time, rather than
partially vested over long period of time
Graded Vesting - ANS schedule used for vesting over 5-15 yrs
RIPA - ANS Retirement Income Policy Act
Employee Retirement Income Security Act of 1974
(ERISA) - ANS federal law that sets minimum standards for most voluntarily established
pension and health plans in private industry to provide protection for individuals in these plans
Form 5500 filing - ANS Annual return that is used to report information regarding employee
benefit plans
Feather bedding - ANS Deliberately limit production or retain excess staff, in an attempt to
create jobs just for the sake of creating jobs, usually result of union contract
Territory rule - ANS employees must follow tax laws in the country that they are in
Salting - ANS tactic where union hires someone to apply for a job at a targeted company, and
then the person will begin unionizing efforts
Hay Market Affair - ANS Aftermath of bombing, May 4th 1886
3 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
