Free HRCI SPHR Practice Exam with Questions & Answers | Set: 2

HR contributes most directly to reducing potential organizational risk by assessing employment practices (A). At the SPHR level, risk management includes identifying and mitigating people-related risks such as discrimination, wage and hour violations, inconsistent policy application, and inadequate documentation.

Assessing employment practices allows HR to proactively identify gaps in compliance, fairness, and consistency before they result in claims, penalties, or reputational damage. This includes reviewing hiring, promotion, discipline, termination, and compensation practices.

Comprehensive legal reviews (B) are typically led by legal counsel, though HR may support them. Cost-benefit analysis (C) supports financial decision-making, not risk reduction. Addressing turnover (D) is important but does not directly mitigate legal or compliance risk.

SPHR exam content highlights HR’s role in preventive risk management through policy review, training, and practice audits.

References :

HRCI SPHR Exam Content Outline — Functional Area: Leadership and Strategy (risk management; compliance).

HRCI SPHR Study Guide — HR-led risk assessment practices.

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Internal factors—such as culture, leadership behavior, employee engagement, and development opportunities—shape how the organization is perceived by current and potential employees. External reputation often starts inside the company.

Extract from HRCI-aligned HR knowledge (Talent Planning and Acquisition):

SPHR-level strategy encourages organizations to “cultivate internal environments that reflect the employment brand promise.” What employees experience daily becomes the external message job candidates receive.

A cultural assessment primarily reveals the degree to which an organization’s culture aligns with its strategic plan (A). At the SPHR level, culture is viewed as a strategic enabler—or barrier—to execution.

Cultural assessments examine values, behaviors, norms, decision-making patterns, and leadership practices to determine whether they support the organization’s stated strategy. Misalignment between culture and strategy is a common cause of failed initiatives, poor change adoption, and inconsistent performance.

While culture may influence talent attraction (B), employee development (C), and total rewards effectiveness (D), these are secondary outcomes. The central diagnostic purpose of a cultural assessment is to evaluate whether “how work gets done” supports “what the organization is trying to achieve.”

SPHR exam content emphasizes that HR leaders must assess and shape culture to enable strategic goals such as growth, innovation, efficiency, or transformation. Cultural assessments provide the data needed to drive targeted change initiatives.

References :

HRCI SPHR Exam Content Outline — Functional Area: Leadership and Strategy (organizational culture; strategy alignment).

HRCI SPHR Study Guide — Cultural assessment tools and applications.

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The best long-term strategy to retain employees during periods of high turnover is to provide a flexible work environment (C). At the SPHR level, retention is driven by work design, autonomy, and work–life integration, not short-term financial incentives.

Flexible work environments—including flexible schedules, remote or hybrid work, and autonomy over how work is performed—address core drivers of voluntary turnover such as burnout, work–life conflict, and lack of control. These arrangements improve engagement, satisfaction, and loyalty across diverse employee populations.

Retention bonuses (A) are short-term fixes that do not address underlying issues and may encourage “bonus chasing.” Service awards (B) recognize tenure but do not influence ongoing retention drivers. EAPs (D) support employee well-being but are reactive and insufficient as a standalone retention strategy.

SPHR exam content emphasizes that sustainable retention strategies focus on job design and organizational culture rather than episodic incentives.

References :

HRCI SPHR Exam Content Outline — Functional Area: Employee Relations and Engagement (retention strategies).

HRCI SPHR Study Guide — Long-term drivers of employee retention.

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Comprehensive and Detailed Explanation:

Descriptive statements provide consistency and clarity in job evaluation. They reduce subjectivity when assigning levels for compensable factors (e.g., skill, effort, responsibility).

This aligns with point-factor compensation models, which require structured, equitable, and repeatable factor definitions.

Higher levels of employee engagement are most strongly associated with lower absenteeism and higher profits (C). At the SPHR level, engagement is treated as a business performance driver, not merely a satisfaction metric.

Engaged employees demonstrate greater commitment, discretionary effort, and accountability. This leads to reduced absenteeism because employees are more motivated to be present and contribute. Engagement also correlates with higher productivity, better customer outcomes, and improved financial performance, which together drive profitability.

While fewer accidents (A) and greater interest in development (D) may occur, these are indirect outcomes. Training participation (B) may increase, but it is not the most significant or consistent organizational result.

SPHR exam content consistently links engagement to measurable business outcomes, particularly financial performance and operational efficiency. This makes absenteeism reduction and profit improvement the most compelling outcomes.

References :

HRCI SPHR Exam Content Outline — Functional Area: Employee Relations and Engagement (engagement outcomes; organizational performance).

HRCI SPHR Study Guide — Business impact of employee engagement.

Innovation (B) as a design principle fosters adaptability by encouraging experimentation, learning, and responsiveness to change. Adaptive organizations prioritize flexibility, cross-functional collaboration, and continuous improvement.

Specialization (A), hierarchy (C), and centralization (D) tend to increase control and efficiency but reduce agility. SPHR exam content emphasizes that adaptability is driven by innovation-supportive structures and cultures.

References :

HRCI SPHR Exam Content Outline — Functional Area: Leadership and Strategy (organizational design; agility).

HRCI SPHR Study Guide — Design principles for adaptive organizations.

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Employment branding refers to how an organization positions itself in the job market to attract talent. The employer brand communicates core values, mission, work culture, and the employee experience, helping potential candidates align their expectations with the organization’s identity.

Extract from HRCI-aligned HR knowledge (Talent Planning and Acquisition):

“Employer branding is a proactive strategy to attract top talent by promoting organizational values and culture.” The SPHR model positions branding as a tool to enhance talent acquisition and employee engagement. It is especially critical in high-demand job markets and competitive industries where differentiation is key.

While the original question lacks compa-ratio data, the concept of compa-ratio is central to answering correctly. A compa-ratio below 100% (e.g., 80%) indicates that an employee is paid below the market midpoint, which typically suggests a lagging pay rate unless justified by tenure or performance.

Extract from HRCI-aligned HR knowledge (Total Rewards domain):

SPHR-level professionals must understand compa-ratio as a benchmark of internal pay relative to market. A compa-ratio = (Employee Pay / Market Midpoint). A compa-ratio significantly under 1.0 signals potential market misalignment or pay equity issues. HR uses this to correct compression, reward tenure, or structure increases.

Retention efforts yield the highest ROI when aimed at high performers, especially those in critical roles or possessing hard-to-replace skills. Broad retention efforts can dilute impact and cost efficiency.

Extract from HRCI-aligned HR knowledge (Employee Relations and Engagement):

SPHR’s strategic retention model highlights “targeted retention of high-potential and high-performing talent as essential to long-term success.” This includes tailored development and reward strategies for key contributors.