Despite the large number of interview types that employers use to make sure they're selecting the best qualified candidate for a job, not all of them can render the results that situational interviews can. The main benefit of this type of interview is that it allows the interviewer to discover how candidates would react in real life problematic situations they may encounter on the job. Based on the answer they receive, interviewers should be able to tell whether candidates are capable of making wise and responsible decisions when facing a problem or conflict. A CV might prove useful when making a list of potential candidates, but it doesn't hold all the necessary information that you'll need to know regarding a person's actual behavior once employed. A basic set of questions won't cut it either. Situational questions, however, can provide more insight.
Most people have a tendency to confuse behavioral interview questions with situational ones. The truth is that they are similar, but overall they provide completely different information for the interviewer. If in behavioral interviews candidates are asked to give real examples of how they've handled certain situations, hence past experiences, in situational interviewing employers will describe a hypothetical situation and ask interviewees how they would handle it. Those situations may or may not represent a part of the job the candidate is being interviewed for. The questions are generally designed to uncover analytical and problem-solving skills as well as to determine how well candidates can handle a problem they didn't prepare for. It's easy for a person to learn a whole set of questions that might be asked during an interview. Knowing beforehand what the "right answers" are, that particular candidate might end up impressing the interviewer even though he/she does not possess the necessary set of skills for coping with an unexpected problem and coming up with a solution.
For instance, if candidates are being interviewed for a sales position, they may be asked how they would respond to an angry customer who wasn't satisfied with the product and wanted to return it. As in the case of behavioral interviews, for situational interviews also it's a great idea to come up with detailed answers. Incorporating past experiences (ones that have something to do with the hypothetical situation) into your answer may prove beneficial. It's good to understand what the responsibilities of the position you've applied for are as well as what challenges you might encounter. Above all, it is important to relax and build your confidence. A strong and capable person is usually a confident one. As soon as the interviewer spots this confidence, the interview will seem less like an examination and more like a conversation.
As for interviewers, a well formed set of situational questions will include the situations that are the most challenging and consequential a person could encounter on the position you're hiring for. Most people can handle the regular daily tasks and they will get even better at them when they gain more experience on the job. But it's very important that situations which can carry important consequences are handled properly.