PHR Practice Test

PHR Business Management Practice Questions

Business Management makes up 7 of every 50 questions on a Tigertest PHR practice test. Here are 10 of the 28 questions on it, each with the answer and the reason.

Updated 2026-11-10 by the Tigertest team. Based on the HRCI PHR Exam Content Outline (2024). Original questions; 50 per test, weighted like the real 115-question exam. 70% is Tigertest's readiness line; HRCI reports a scaled score. Not affiliated with HRCI.

1. 1. A plant started the year with 210 employees and ended with 190. There were 30 separations during the year. What is the annual turnover rate?

   • A.10%
   • B.15%
   • C.14.3%
   • D.15.8%

   Answer: B. Turnover is separations divided by average headcount: 30 / ((210 + 190) / 2) = 30 / 200 = 15%. Dividing by the starting headcount gives 14.3%, and by the ending headcount 15.8%. 10% is the net fall in headcount (20 / 200), not separations.

2. 2. An HR manager wants to see how long it takes from approving a requisition to a candidate accepting the offer. Which metric should she track?

   • A.Cost-per-hire
   • B.Offer acceptance rate
   • C.Time-to-start
   • D.Time-to-fill

   Answer: D. Time-to-fill runs from requisition approval (or posting) to offer acceptance. Time-to-start runs to the first day of work, and cost-per-hire measures spending, not time.

3. 3. A leadership course cost $40,000 and produced measurable savings of $100,000 in its first year. What is the return on investment?

   • A.150%
   • B.40%
   • C.250%
   • D.60%

   Answer: A. ROI is net benefit divided by cost: ($100,000 - $40,000) / $40,000 = 150%. Dividing total benefit by cost gives 250%, a benefit-cost ratio rather than ROI.

4. 4. In a SWOT analysis, a competitor opening a plant in the same town is best classed as:

   • A.An opportunity
   • B.A strength
   • C.A threat
   • D.A weakness

   Answer: C. Threats and opportunities are external; strengths and weaknesses are internal. A new competitor for the same local labor pool is an external threat.

5. 5. A PESTLE scan asks HR to consider a new state paid leave law. Which letter does that fall under?

   • A.Economic
   • B.Social
   • C.Legal
   • D.Political

   Answer: C. PESTLE covers political, economic, social, technological, legal and environmental factors. A law that has passed is a legal factor; the debate before it passed would be political.

6. 6. A company has managers who each supervise three or four people across eight layers. This structure is best described as:

   • A.Tall with a narrow span of control
   • B.A matrix with dual reporting
   • C.A divisional structure by region
   • D.Flat with a wide span of control at each level

   Answer: A. Many layers with few direct reports per manager is a tall structure with a narrow span of control, which slows decisions but allows close supervision.

7. 7. Engineers on a product team report to a project leader and to their functional engineering manager. This is:

   • A.A flat structure
   • B.A functional structure
   • C.A divisional structure
   • D.A matrix structure

   Answer: D. A matrix structure gives employees two reporting lines, one functional and one project or product. It improves coordination but can blur authority.

8. 8. HR consolidates payroll, benefits enrollment and leave administration for all divisions into one team. This model is called:

   • A.Outsourcing
   • B.Shared services
   • C.A center of excellence
   • D.An HR business partner model

   Answer: B. A shared services center handles routine transactions for the whole organization. A center of excellence holds specialist expertise, such as compensation design.

9. 9. Which HR role sits with a business unit's leaders and translates their goals into people plans?

   • A.Benefits specialist
   • B.HR business partner
   • C.Shared services analyst
   • D.HRIS administrator

   Answer: B. An HR business partner works alongside unit leaders as a consultant and draws on centers of excellence and shared services for delivery.

10. 10. In Lewin's change model, communicating why the current way of working must end happens in which stage?

    • A.Refreezing
    • B.Transitioning
    • C.Changing
    • D.Unfreezing

    Answer: D. Unfreezing creates readiness by showing the need for change. Changing is the move itself, and refreezing anchors the new behavior in policy and habit.