PHR HR Exam Prep 2026 practice questions and answers. Tap an option to test yourself — you'll see the correct answer and a plain-English explanation for every question. Free, no login.
Q21A manager is planning to use a third-party service to conduct background checks on potential employees. Identify which steps must be followed under the Fair Credit Reporting Act (FCRA). Select all that apply. There are 4 correct answers.
✓ Correct answer: C. Provide a written stand-alone disclosure to the candidate before obtaining the report
The Fair Credit Reporting Act (FCRA) mandates that employers using third-party services for background checks must follow specific procedures. This includes providing a clear disclosure about obtaining the report, securing the candidate's written consent, and sharing the report with the candidate along with informing them of their rights before taking any adverse action. Additionally, candidates must be informed of their right to dispute any information in the report. Failing to comply with these steps can result in legal consequences for the employer. Providing multiple prompts to consider or revoke consent as presented in the distractors is not required by the FCRA.
Q22Which strategy might an organization choose if they want to enhance employee retention and morale while filling a vacant managerial position?
✓ Correct answer: D. Promoting an internal candidate to the managerial position
Answer: Promoting an internal candidate to the managerial position. By promoting from within, a company can bolster employee morale and retention as it shows existing employees that growth and advancement are possible within the organization.
Q23Analyze the following business metrics used to measure organizational effectiveness. Select all that apply. There are 3 correct answers. Metric Description Employee Satisfaction Measures overall contentment of employees with their roles and the organizational environment. Turnover Rates Calculates the percentage of employees leaving the organization within a certain period. Production Efficiency Assesses the ratio of output produced against input used. Cost per Hire Evaluates the total financial expenditure required to recruit a new employee. Market Share Indicates the percentage of total sales in an industry generated by the organization. Retention Rates Determines the percentage of employees who remain with the organization over a specified period.
✓ Correct answer: B. Turnover Rates
Key business metrics such as turnover rates, cost per hire, and retention rates are crucial for evaluating organizational efficiency and strategy. Turnover rates track the percentage of employees leaving, cost per hire assesses the expenses related to hiring, and retention rates measure how many employees stay within the company over a period. Market share and production efficiency relate to business performance but are not specifically workforce indicators.
Q24Which of the following is not a component of the SWOT analysis?
✓ Correct answer: B. Metrics
Answer: Metrics The SWOT analysis model is a framework used to evaluate a company's competitive position by identifying its strengths, weaknesses, opportunities, and threats. Metrics are not part of the SWOT analysis.
Q25At which stage of the risk management process would you conduct a risk assessment using a Risk Matrix or FMEA (Failure Modes and Effects Analysis)?
✓ Correct answer: C. Risk identification
Answer: Risk identification The risk management process consists of several key steps: risk identification, risk assessment, risk response planning, and risk monitoring. Risk identification is the stage where tools like a Risk Matrix or FMEA are used to identify potential risks and analyze their impact on the project or organization. A Risk Matrix is used to evaluate the probability and impact of risks on a grid, while FMEA is a structured approach to identifying potential failure modes and their consequences.
Q26A deductible is commonly associated with which type of healthcare plan?
✓ Correct answer: D. PPO plans
Answer: PPO plans In a PPO, or Preferred Provider Organization, individuals pay a deductible before their insurance coverage begins to pay. Deductibles are utilized as a cost-sharing mechanism, promoting responsible healthcare usage.
Q27During which U.S. president's administration was the Fair Labor Standards Act (FLSA) enacted?
✓ Correct answer: C. Franklin Delano Roosevelt
The Fair Labor Standards Act (FLSA) was enacted in 1938 during the presidency of Franklin Delano Roosevelt as part of his New Deal legislation. It established minimum wage, overtime pay eligibility, and child labor standards.
Q28Which of the following regulations was introduced to address inequality in workplace promotions and salary discrepancies?
✓ Correct answer: B. Glass Ceiling Act
The correct answer is Glass Ceiling Act. It was designed to identify and eliminate barriers that prevent women and minorities from advancing to higher positions in the workplace. This initiative aimed to address salary discrepancies and promotion inequalities historically present in many organizations.
Q29Which of the following was the first legislation to introduce the concept of broad health insurance for employees at the federal level?
✓ Correct answer: D. Affordable Care Act of 2010
Answer: Affordable Care Act of 2010 The Affordable Care Act of 2010 introduced the concept of mandatory health insurance coverage for employees, representing a significant milestone in healthcare reform at a federal level.
Q30Identify the types of employee benefit plans that are classified as welfare benefit plans under ERISA. Select all that apply. There are 4 correct answers.
✓ Correct answer: C. Health insurance plans
Welfare benefit plans provide medical, health, disability, death, and similar types of benefits. Under ERISA, common welfare benefit plans include health, life, disability, and dental insurance plans. 401(k) and money-purchase plans are types of retirement plans, which are not classified as welfare benefit plans under ERISA.
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