SHRM CP Exam Preparation Questions and
Correct Answers 2026-2027 GRADED A+.
Career Planning - CORRECT ANSWER Actions & activities that individuals perform
in order to give direction to their work lives.
Brain drain - CORRECT ANSWER Exit of educated & skilled citizens from emerging
& developing countries for better paying jobs in developed countries.
Auditory learners - CORRECT ANSWER People who learn best by relying on their
sense of hearing.
Andragogy - CORRECT ANSWER Study of how adults learn.
Cost-of-living adjustment (COLA) - CORRECT ANSWER Pay adjustment given to
eligible employees regardless of performance or organizational profitability; usually
linked to inflation.
Compa-ratio - CORRECT ANSWER Pay rate divided by the midpoint of the pay
range.
Broadbanding - CORRECT ANSWER Combining several salary grades or job
classifications with narrow pay ranges unto one brand with a wider salary spread.
Behavioral interview - CORRECT ANSWER Type of interview that focuses on how
applicants previously handled real situations.
Applicant tracking software (ATS) - CORRECT ANSWER Software that provides an
automated way for organizations to manage the recruiting process.
Developmental activities - CORRECT ANSWER Activities that focus on preparing
employees for future responsibilities while increasing their capacity to perform their
current jobs.
Compensation - CORRECT ANSWER All financial returns (beyond any benefits
payments or services), including salary and allowances.
Career development - CORRECT ANSWER Process by which employees progress
through a series of stages in their careers, each of which is characterized by
relatively unique, themes, and tasks.
,Benefits - CORRECT ANSWER Payments or services provided to employees to
cover issues such as retirement, health care, sick pay/disability schemes, life
insurance, and paid time off.
Apprenticeship - CORRECT ANSWER Related to technical skills training; often a
partnership between employers and unions.
Competency-based interview - CORRECT ANSWER Type of interview in which the
interviewer asks questions related to competencies for the position and asks
candidates to provide examples of times they demonstrated the competencies.
ADDIE model - CORRECT ANSWER 5 step instructional design process that
governs the development of learning programs.
Assessment centers - CORRECT ANSWER Assessment tools that provide
candidates a wide range of leadership situations and problem-solving exercises.
Blended learning - CORRECT ANSWER Planned approach to learning that included
a combination of instructor-led training, self-directed study, and /or on-the-job training.
Career management - CORRECT ANSWER Preparing, implementing, and
monitoring employees' career paths, with a primary focus on the goals and needs of
the organization.
Competencies - CORRECT ANSWER Clusters of highly interrelated attributes,
including knowledge, skills, or abilities (KSA) that give rise to the behaviors needed
to perform a given job effectively.
Strategy - CORRECT ANSWER A plan of action for accomplishing an organization's
long-range goals.
SWOT analysis - CORRECT ANSWER Process for assessing an organization's
strategic capabilities in comparison to threats and opportunities identified during
environmental scanning.
Value drivers - CORRECT ANSWER Actions, processes, or results that are needed
to deliver a desired value.
Vision statement - CORRECT ANSWER Vivid, guiding image of an organization's
desired future, the future it hopes to attain through its strategy.
Organizational values - CORRECT ANSWER Beliefs that are important to an
organization and often dictate employee behavior.
,Strategic fit - CORRECT ANSWER A state in which an organization's strategy is
consistent with its external opportunities and circumstances and its internal structure,
resources, and capabilities.
Strategic management - CORRECT ANSWER The actions that leaders take to move
their organizations toward those goals and create value for all stakeholders.
Strategic planning - CORRECT ANSWER The process of setting goals and
designing a path toward a competitive position.
Metrics - CORRECT ANSWER Performance parameters based on the relationship
between 2 or more measures.
Mission statement - CORRECT ANSWER Statement that specifies what activities an
organization intends to pursue and what course management has carted for the
future; a concise statement of its strategy.
Net profit margin - CORRECT ANSWER Ratio of net income (gross sales minus
expenses and taxes) to net sales.
Organizational culture - CORRECT ANSWER The basic beliefs and customs shared
by members of an organization that contribute to an organization's sense of its
identity.
Income statement - CORRECT ANSWER Statement that reports revenues,
expenses, and net income (profit) for a specified period.
Lagging indicator - CORRECT ANSWER Type of metric that describes an activity
that has already occurred.
Leading indicator - CORRECT ANSWER Type of metric that describes an activity
that can change future performance and indicate higher degree of success in
achieving strategic goals.
Liabilities - CORRECT ANSWER Organization's debts and other financial obligations.
Due diligence - CORRECT ANSWER Necessary level of care and attention that is
taken to investigate an action before it is taken.
Environmental scanning - CORRECT ANSWER Process that involves a systematic
survey and interpretation of relevant data to identify external opportunities and threats
and to assess how these factors affect the organization currently and how they are
likely to affect the organization in the future.
Equity - CORRECT ANSWER Amount of owners' or shareholders' portion of a
business.
, Gross profit margin - CORRECT ANSWER Ratio of gross profit to net sales.
Benchmarking - CORRECT ANSWER Process that compares performance levels
and/or processes of one entity with those of another to identify performance gaps
and set goals aimed at improving performance.
Blue ocean strategies - CORRECT ANSWER Strategies that generate competitive
advantage by creating a new marketplace arena in which there are no other
competitors.
Business case - CORRECT ANSWER Presentation to management that establishes
that a specific problem exists and argues that the proposed solution is the best way
to solve the problem in terms of time, cost efficiency, and probability of success.
Cash flow statement - CORRECT ANSWER Statement the shows incoming and
outgoing cash in the areas of operations, investments, and financing and remaining
cash reserves; reflects an organization's ability to meet its current and short-term
obligations.
Accounts payable - CORRECT ANSWER Money an organization owed its vendors
and suppliers.
Accounts receivable - CORRECT ANSWER Money an organization's customers owe
the organization.
Assets - CORRECT ANSWER Financial, physical, and sometimes intangible
properties an organization owns.
Balance sheet - CORRECT ANSWER Statement that reports the financial position of
the organization at a specific point in time; shows assets, liabilities, and shareholder
equity.
Vicarious liability - CORRECT ANSWER Legal doctrine under which a party can be
held liable for the wrongful actions of another party.
Weingarten rights - CORRECT ANSWER Union employees' right in U.S. to have a
union representative or coworker present during an investigatory interview.
Worker Adjustment and Retraining Notification (WARN) Act - CORRECT ANSWER
U.S. act that requires some employers to give a minimum of 60 days' notice if a plant
is to close or is mass layoffs will occur.
Workweek - CORRECT ANSWER Any fixed, recurring period of 168 consecutive
hours (7 days time 24 hours = 168 hrs)
Correct Answers 2026-2027 GRADED A+.
Career Planning - CORRECT ANSWER Actions & activities that individuals perform
in order to give direction to their work lives.
Brain drain - CORRECT ANSWER Exit of educated & skilled citizens from emerging
& developing countries for better paying jobs in developed countries.
Auditory learners - CORRECT ANSWER People who learn best by relying on their
sense of hearing.
Andragogy - CORRECT ANSWER Study of how adults learn.
Cost-of-living adjustment (COLA) - CORRECT ANSWER Pay adjustment given to
eligible employees regardless of performance or organizational profitability; usually
linked to inflation.
Compa-ratio - CORRECT ANSWER Pay rate divided by the midpoint of the pay
range.
Broadbanding - CORRECT ANSWER Combining several salary grades or job
classifications with narrow pay ranges unto one brand with a wider salary spread.
Behavioral interview - CORRECT ANSWER Type of interview that focuses on how
applicants previously handled real situations.
Applicant tracking software (ATS) - CORRECT ANSWER Software that provides an
automated way for organizations to manage the recruiting process.
Developmental activities - CORRECT ANSWER Activities that focus on preparing
employees for future responsibilities while increasing their capacity to perform their
current jobs.
Compensation - CORRECT ANSWER All financial returns (beyond any benefits
payments or services), including salary and allowances.
Career development - CORRECT ANSWER Process by which employees progress
through a series of stages in their careers, each of which is characterized by
relatively unique, themes, and tasks.
,Benefits - CORRECT ANSWER Payments or services provided to employees to
cover issues such as retirement, health care, sick pay/disability schemes, life
insurance, and paid time off.
Apprenticeship - CORRECT ANSWER Related to technical skills training; often a
partnership between employers and unions.
Competency-based interview - CORRECT ANSWER Type of interview in which the
interviewer asks questions related to competencies for the position and asks
candidates to provide examples of times they demonstrated the competencies.
ADDIE model - CORRECT ANSWER 5 step instructional design process that
governs the development of learning programs.
Assessment centers - CORRECT ANSWER Assessment tools that provide
candidates a wide range of leadership situations and problem-solving exercises.
Blended learning - CORRECT ANSWER Planned approach to learning that included
a combination of instructor-led training, self-directed study, and /or on-the-job training.
Career management - CORRECT ANSWER Preparing, implementing, and
monitoring employees' career paths, with a primary focus on the goals and needs of
the organization.
Competencies - CORRECT ANSWER Clusters of highly interrelated attributes,
including knowledge, skills, or abilities (KSA) that give rise to the behaviors needed
to perform a given job effectively.
Strategy - CORRECT ANSWER A plan of action for accomplishing an organization's
long-range goals.
SWOT analysis - CORRECT ANSWER Process for assessing an organization's
strategic capabilities in comparison to threats and opportunities identified during
environmental scanning.
Value drivers - CORRECT ANSWER Actions, processes, or results that are needed
to deliver a desired value.
Vision statement - CORRECT ANSWER Vivid, guiding image of an organization's
desired future, the future it hopes to attain through its strategy.
Organizational values - CORRECT ANSWER Beliefs that are important to an
organization and often dictate employee behavior.
,Strategic fit - CORRECT ANSWER A state in which an organization's strategy is
consistent with its external opportunities and circumstances and its internal structure,
resources, and capabilities.
Strategic management - CORRECT ANSWER The actions that leaders take to move
their organizations toward those goals and create value for all stakeholders.
Strategic planning - CORRECT ANSWER The process of setting goals and
designing a path toward a competitive position.
Metrics - CORRECT ANSWER Performance parameters based on the relationship
between 2 or more measures.
Mission statement - CORRECT ANSWER Statement that specifies what activities an
organization intends to pursue and what course management has carted for the
future; a concise statement of its strategy.
Net profit margin - CORRECT ANSWER Ratio of net income (gross sales minus
expenses and taxes) to net sales.
Organizational culture - CORRECT ANSWER The basic beliefs and customs shared
by members of an organization that contribute to an organization's sense of its
identity.
Income statement - CORRECT ANSWER Statement that reports revenues,
expenses, and net income (profit) for a specified period.
Lagging indicator - CORRECT ANSWER Type of metric that describes an activity
that has already occurred.
Leading indicator - CORRECT ANSWER Type of metric that describes an activity
that can change future performance and indicate higher degree of success in
achieving strategic goals.
Liabilities - CORRECT ANSWER Organization's debts and other financial obligations.
Due diligence - CORRECT ANSWER Necessary level of care and attention that is
taken to investigate an action before it is taken.
Environmental scanning - CORRECT ANSWER Process that involves a systematic
survey and interpretation of relevant data to identify external opportunities and threats
and to assess how these factors affect the organization currently and how they are
likely to affect the organization in the future.
Equity - CORRECT ANSWER Amount of owners' or shareholders' portion of a
business.
, Gross profit margin - CORRECT ANSWER Ratio of gross profit to net sales.
Benchmarking - CORRECT ANSWER Process that compares performance levels
and/or processes of one entity with those of another to identify performance gaps
and set goals aimed at improving performance.
Blue ocean strategies - CORRECT ANSWER Strategies that generate competitive
advantage by creating a new marketplace arena in which there are no other
competitors.
Business case - CORRECT ANSWER Presentation to management that establishes
that a specific problem exists and argues that the proposed solution is the best way
to solve the problem in terms of time, cost efficiency, and probability of success.
Cash flow statement - CORRECT ANSWER Statement the shows incoming and
outgoing cash in the areas of operations, investments, and financing and remaining
cash reserves; reflects an organization's ability to meet its current and short-term
obligations.
Accounts payable - CORRECT ANSWER Money an organization owed its vendors
and suppliers.
Accounts receivable - CORRECT ANSWER Money an organization's customers owe
the organization.
Assets - CORRECT ANSWER Financial, physical, and sometimes intangible
properties an organization owns.
Balance sheet - CORRECT ANSWER Statement that reports the financial position of
the organization at a specific point in time; shows assets, liabilities, and shareholder
equity.
Vicarious liability - CORRECT ANSWER Legal doctrine under which a party can be
held liable for the wrongful actions of another party.
Weingarten rights - CORRECT ANSWER Union employees' right in U.S. to have a
union representative or coworker present during an investigatory interview.
Worker Adjustment and Retraining Notification (WARN) Act - CORRECT ANSWER
U.S. act that requires some employers to give a minimum of 60 days' notice if a plant
is to close or is mass layoffs will occur.
Workweek - CORRECT ANSWER Any fixed, recurring period of 168 consecutive
hours (7 days time 24 hours = 168 hrs)
