This is the first standard setting study in Malaysia aimed at developing Performance-Level Descriptors (PLDs) and determining cut scores that differentiate undergraduates with low, moderate and high employability skills using a newly developed Situational judgment Test (SJT). SJT items from five domains critical for future job employment: 1) critical thinking and problem solving, 2) enterprising, 3) integrity, 4) leadership and 5) teamwork were developed. Modified Angoff method involving PLDs and cut scores were developed by five subject-matter experts. Two test instruments were used: 10 practice and 36 original bilingual Malay-English SJT items. The PLDs and two cut scores to distinguish low, moderate and high employability skills were validly developed, without compromising consequential validity. The findings benefit undergraduates with low employability as they can be trained with current global job readiness skills by the universities, which also forms the practice implication of this study. Another practical implication is academicians can be further encouraged to understand the theoretical framework of establishing standard setting for employability.