PMP People — Leading Projects Practice Question
During a project review, you discover that the project is 15% over budget at the midpoint. After analysis, you find that the cost overrun is due to underestimation of testing effort and one team member's inefficiency. Which TWO actions should you take to address the situation?
⚠ Common exam trap
Many candidates confuse applying contingency reserves (Option A) as a quick fix for any cost overrun, failing to recognize that reserves are for risk events, not for correcting estimation errors or performance issues.
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Have a private conversation with the underperforming team member to understand challenges and provide support
Option B is correct because the overrun has a human-performance root cause, and a private, supportive conversation is the appropriate first step to uncover whether the team member faces skill gaps, unclear expectations, or blockers, and to agree on corrective support without demotivating the team. Option C is correct because the testing-effort underestimation points to a flawed estimate basis, so reviewing the estimating assumptions and applying earned value management (for example, CPI = EV/AC and EAC = BAC/CPI) lets you re-forecast the final cost and decide on a data-driven corrective response. Option A is not appropriate as a primary action because contingency reserves are for identified risks that materialize, not for correcting estimating errors or performance issues, and using them here would mask the root cause. Option D is wrong because unilateral scope reduction is a change that requires stakeholder approval and would not address the underlying estimating and performance problems. Option E is wrong because immediately enrolling the member in advanced testing training presumes a training deficiency before the cause is diagnosed, and it adds cost rather than controlling it.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Apply contingency reserves to cover the cost overrun
Why it's wrong here
Contingency reserves are specifically allocated for identified risks that materialize, representing "known-unknowns" within the project scope. A cost overrun resulting from underperformance or an estimation error is typically a management reserve issue or requires re-planning, not the application of contingency reserves. Using these reserves for non-risk-related issues depletes funds meant for legitimate risk responses, leaving the project vulnerable to future identified threats. This action misuses project financial controls.
- ✓
Have a private conversation with the underperforming team member to understand challenges and provide support
Why this is correct
A private, supportive conversation with an underperforming team member is a crucial first step in addressing performance issues. This approach allows the project manager to understand the root causes of the underperformance, which could range from lack of resources, unclear instructions, personal challenges, or skill gaps, rather than immediately assuming a lack of effort. By offering support and collaboratively identifying solutions, the project manager fosters trust and facilitates a path toward improved efficiency and project success. This aligns with effective team management and conflict resolution.
- ✓
Review the estimate basis and use earned value management to forecast the final cost
Why this is correct
Reviewing the estimate basis and applying Earned Value Management (EVM) techniques provides objective, data-driven insights into the project's current cost and schedule performance. EVM metrics, such as Cost Performance Index (CPI) and Schedule Performance Index (SPI), enable the project manager to accurately forecast the Estimate at Completion (EAC) and Estimate to Complete (ETC). This analytical approach helps quantify the extent of the cost overrun and informs strategic decisions for corrective actions, ensuring a realistic outlook on project completion. It's essential for proactive control.
- ✗
Reduce the project scope to bring costs back in line
Why it's wrong here
Arbitrarily reducing project scope to address a cost overrun is an inappropriate action because all scope changes must follow the formal integrated change control process. Such a unilateral decision can negatively impact stakeholder expectations, compromise project objectives, and potentially deliver a product or service that does not meet the original business need. Proper change management ensures that any scope adjustments are evaluated for their impact on all project constraints and approved by relevant stakeholders.
- ✗
Immediately enroll the team member in an advanced testing training course
Why it's wrong here
Immediately enrolling a team member in an advanced training course without first understanding the root cause of their underperformance is premature and potentially ineffective. The issue might stem from factors other than a skill gap, such as resource constraints, unclear requirements, or personal issues, which training would not resolve. A thorough root cause analysis, ideally through a supportive conversation, should precede any specific intervention like training to ensure the solution directly addresses the actual problem. This avoids misallocating resources and time.
Go deeper
Related to this question
About these practice questions
Courseiva writes every PMP question from scratch — 820 in total, each with an explanation and a wrong-answer breakdown. None are copied from real exams or dumps. Learn why practice questions differ from exam dumps →
JA
Written by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
This PMP practice question is part of Courseiva's free PMI certification practice question bank. Courseiva provides original exam-style practice questions with explanations, topic-based practice, mock exams, readiness tracking, and study analytics to help learners prepare for the PMP exam.