WGU C202 – Managing Human Capital (UXC2) Objective Assessment | OA V1
and V2 | Questions and Answers – 2026 Update | 100% Correct.
Questions 1–15
Question 1
An organization is experiencing high voluntary turnover among high-performing employees.
Exit interviews reveal that employees feel there is limited opportunity for career advancement
and professional growth. Which of the following human capital strategies would most effectively
address this issue?
A. Increasing base salaries across all departments
B. Implementing structured career development and succession planning programs
C. Reducing performance evaluation frequency
D. Outsourcing recruitment to an external staffing agency
Correct Answer: B
Explanation:
Career development and succession planning create clear advancement pathways, improving
retention of high performers. While compensation (A) may help short-term, long-term retention
is more strongly linked to growth opportunities. Reducing evaluations (C) does not address
advancement concerns, and outsourcing recruitment (D) does not impact internal retention.
Question 2
A company conducts a job analysis to update job descriptions and determine necessary
competencies. Which of the following is the primary purpose of conducting a job analysis?
A. To determine employee salary increases
B. To identify tasks, responsibilities, and required knowledge, skills, and abilities (KSAs)
C. To evaluate employee engagement levels
D. To conduct disciplinary reviews
Correct Answer: B
Explanation:
Job analysis identifies essential tasks, duties, responsibilities, and required KSAs. It supports
recruitment, selection, performance appraisal, and compensation decisions. It does not directly
determine salary increases (A), engagement (C), or discipline (D).
,Question 3
Which of the following best describes human capital as a source of competitive advantage?
A. It is easily replicated by competitors.
B. It focuses solely on employee compensation strategies.
C. It includes the collective skills, knowledge, and abilities that contribute to organizational
performance.
D. It eliminates the need for strategic planning.
Correct Answer: C
Explanation:
Human capital refers to employees’ collective capabilities and knowledge that drive performance
and innovation. When unique and well-developed, it creates sustainable competitive advantage.
It is not easily replicated (A), not limited to compensation (B), and does not replace strategic
planning (D).
Question 4
An organization adopts a high-performance work system (HPWS). Which practice would most
likely be included?
A. Strict top-down management with limited employee input
B. Minimal training investment to reduce costs
C. Extensive employee training, empowerment, and performance-based rewards
D. Annual performance reviews without ongoing feedback
Correct Answer: C
Explanation:
HPWS emphasizes employee development, empowerment, collaboration, and performance-
based incentives to improve productivity. Options A, B, and D contradict HPWS principles.
Question 5
Which federal law requires employers to provide reasonable accommodations to qualified
individuals with disabilities?
,A. Fair Labor Standards Act (FLSA)
B. Americans with Disabilities Act (ADA)
C. Occupational Safety and Health Act (OSHA)
D. National Labor Relations Act (NLRA)
Correct Answer: B
Explanation:
The ADA requires employers to provide reasonable accommodations unless it causes undue
hardship. FLSA addresses wages and hours, OSHA focuses on safety, and NLRA governs labor
relations.
Question 6
An HR manager wants to ensure selection tools are legally defensible. Which concept must the
tools demonstrate?
A. Redundancy
B. Validity and reliability
C. Informality
D. Seniority bias
Correct Answer: B
Explanation:
Selection tools must be valid (measure what they claim) and reliable (produce consistent results).
Without validity and reliability, hiring decisions may be legally challenged.
Question 7
Which of the following is an example of intrinsic motivation?
A. Receiving a bonus for meeting sales targets
B. Enjoying the sense of accomplishment from completing a challenging project
C. Getting a salary increase
D. Being promoted to a managerial role
Correct Answer: B
Explanation:
Intrinsic motivation comes from internal satisfaction, such as accomplishment or enjoyment.
Bonuses, raises, and promotions are extrinsic rewards.
, Question 8
A company uses a forced ranking performance appraisal system. What is a potential
disadvantage of this method?
A. It eliminates employee accountability.
B. It may create unhealthy competition and reduce teamwork.
C. It provides overly lenient evaluations.
D. It avoids differentiating performance levels.
Correct Answer: B
Explanation:
Forced ranking can create internal competition and morale issues. It clearly differentiates
performance (D incorrect), but may harm collaboration.
Question 9
Which leadership theory emphasizes adapting leadership style based on employee readiness and
competence?
A. Trait Theory
B. Situational Leadership Theory
C. Transactional Leadership Theory
D. Path-Goal Theory
Correct Answer: B
Explanation:
Situational leadership adjusts style based on follower competence and commitment levels. Trait
theory focuses on personality traits; transactional theory emphasizes exchanges; path-goal
focuses on clarifying paths to goals.
Question 10
Which compensation strategy aligns employee pay directly with individual performance
outcomes?
A. Seniority-based pay
B. Merit-based pay
and V2 | Questions and Answers – 2026 Update | 100% Correct.
Questions 1–15
Question 1
An organization is experiencing high voluntary turnover among high-performing employees.
Exit interviews reveal that employees feel there is limited opportunity for career advancement
and professional growth. Which of the following human capital strategies would most effectively
address this issue?
A. Increasing base salaries across all departments
B. Implementing structured career development and succession planning programs
C. Reducing performance evaluation frequency
D. Outsourcing recruitment to an external staffing agency
Correct Answer: B
Explanation:
Career development and succession planning create clear advancement pathways, improving
retention of high performers. While compensation (A) may help short-term, long-term retention
is more strongly linked to growth opportunities. Reducing evaluations (C) does not address
advancement concerns, and outsourcing recruitment (D) does not impact internal retention.
Question 2
A company conducts a job analysis to update job descriptions and determine necessary
competencies. Which of the following is the primary purpose of conducting a job analysis?
A. To determine employee salary increases
B. To identify tasks, responsibilities, and required knowledge, skills, and abilities (KSAs)
C. To evaluate employee engagement levels
D. To conduct disciplinary reviews
Correct Answer: B
Explanation:
Job analysis identifies essential tasks, duties, responsibilities, and required KSAs. It supports
recruitment, selection, performance appraisal, and compensation decisions. It does not directly
determine salary increases (A), engagement (C), or discipline (D).
,Question 3
Which of the following best describes human capital as a source of competitive advantage?
A. It is easily replicated by competitors.
B. It focuses solely on employee compensation strategies.
C. It includes the collective skills, knowledge, and abilities that contribute to organizational
performance.
D. It eliminates the need for strategic planning.
Correct Answer: C
Explanation:
Human capital refers to employees’ collective capabilities and knowledge that drive performance
and innovation. When unique and well-developed, it creates sustainable competitive advantage.
It is not easily replicated (A), not limited to compensation (B), and does not replace strategic
planning (D).
Question 4
An organization adopts a high-performance work system (HPWS). Which practice would most
likely be included?
A. Strict top-down management with limited employee input
B. Minimal training investment to reduce costs
C. Extensive employee training, empowerment, and performance-based rewards
D. Annual performance reviews without ongoing feedback
Correct Answer: C
Explanation:
HPWS emphasizes employee development, empowerment, collaboration, and performance-
based incentives to improve productivity. Options A, B, and D contradict HPWS principles.
Question 5
Which federal law requires employers to provide reasonable accommodations to qualified
individuals with disabilities?
,A. Fair Labor Standards Act (FLSA)
B. Americans with Disabilities Act (ADA)
C. Occupational Safety and Health Act (OSHA)
D. National Labor Relations Act (NLRA)
Correct Answer: B
Explanation:
The ADA requires employers to provide reasonable accommodations unless it causes undue
hardship. FLSA addresses wages and hours, OSHA focuses on safety, and NLRA governs labor
relations.
Question 6
An HR manager wants to ensure selection tools are legally defensible. Which concept must the
tools demonstrate?
A. Redundancy
B. Validity and reliability
C. Informality
D. Seniority bias
Correct Answer: B
Explanation:
Selection tools must be valid (measure what they claim) and reliable (produce consistent results).
Without validity and reliability, hiring decisions may be legally challenged.
Question 7
Which of the following is an example of intrinsic motivation?
A. Receiving a bonus for meeting sales targets
B. Enjoying the sense of accomplishment from completing a challenging project
C. Getting a salary increase
D. Being promoted to a managerial role
Correct Answer: B
Explanation:
Intrinsic motivation comes from internal satisfaction, such as accomplishment or enjoyment.
Bonuses, raises, and promotions are extrinsic rewards.
, Question 8
A company uses a forced ranking performance appraisal system. What is a potential
disadvantage of this method?
A. It eliminates employee accountability.
B. It may create unhealthy competition and reduce teamwork.
C. It provides overly lenient evaluations.
D. It avoids differentiating performance levels.
Correct Answer: B
Explanation:
Forced ranking can create internal competition and morale issues. It clearly differentiates
performance (D incorrect), but may harm collaboration.
Question 9
Which leadership theory emphasizes adapting leadership style based on employee readiness and
competence?
A. Trait Theory
B. Situational Leadership Theory
C. Transactional Leadership Theory
D. Path-Goal Theory
Correct Answer: B
Explanation:
Situational leadership adjusts style based on follower competence and commitment levels. Trait
theory focuses on personality traits; transactional theory emphasizes exchanges; path-goal
focuses on clarifying paths to goals.
Question 10
Which compensation strategy aligns employee pay directly with individual performance
outcomes?
A. Seniority-based pay
B. Merit-based pay
