Chapter 2Strategic HR Management and Planning

MULTIPLE CHOICE 1. The flawed assumption underlying the creation of the Job Bank at GM, Ford and Chrysler in the 1980s was that a. the excess workers could be retrained for new high tech positions in the auto plants that would be created as the car manufacturing process was automated. b. the auto unions would trade job training for laid-off workers for reductions in the pension plans for retired auto workers thus reducing the labor cost burden per car. c. the Job Bank would be a temporary benefit to employees who took voluntary severance packages that would be phased out as the manufacturers achieved the optimal workforce size. d. demand for American-made cars would increase and the excess workers could return to their factory jobs. ANS: D OBJ: 1 TOP: Application PTS: 1 DIF: Challenging NAT: AACSB Analytic REF: p. 35 LOC: Strategy

2. ____ refers to organizational use of employees to gain or keep a competitive advantage resulting in greater organizational effectiveness. a. Manpower planning b. Strategic HR management c. HR forecasting d. Operational HR ANS: B OBJ: 1 TOP: Definitional PTS: 1 DIF: Easy NAT: AACSB Reflective Thinking REF: p. 36 LOC: Strategy

3. Which of the following statements is FALSE? a. The organizations existing employees limit the organizations choice of strategy. b. Organizations survive and grow by choosing the strategy that will allow them to achieve low costs and innovative products. c. Most competitive strategies depend heavily on the quality of the organizations human capital. d. Organizations in which the CEO dominates the selection of the organizations strategy are less successful than organizations in which strategy is developed by a formal committee process. ANS: B OBJ: 1 TOP: Conceptual PTS: 1 DIF: Challenging NAT: AACSB Reflective Thinking REF: p. 35 LOC: Strategy

4. In order to add value to the human capital of the organization, a. HR must have good metrics about the HR side of the business. b. HR managers must be focused on reducing the total cost of labor. c. the HR function must form the interface between the external environment of the organization and its internal environment. d. HR policies and practices should result in the workforce with the minimum quantity and maximum quality needed to achieve productivity goals. ANS: A PTS: 1 DIF: Challenging REF: p. 36

OBJ: 1 TOP: Conceptual

NAT: AACSB Reflective Thinking

LOC: Creation of Value

5. In order for any organizational strategy to work, the HR strategy must a. align with the one best way to achieve worker productivity. b. move beyond the traditional HR focus on effectiveness and efficiency. c. generate the right people in the right place at the right time. d. develop the needed human competencies in the organizations existing workforce. ANS: C OBJ: 1 TOP: Conceptual PTS: 1 DIF: Challenging NAT: AACSB Reflective Thinking REF: p. 36 LOC: Strategy

6. Georgiana, the vice president of HR in an Ohio-based firm, is in a meeting with the other top level corporate executives. They are discussing whether it is a good strategy for the firm to open a branch in Amsterdam. In her role as head of HR, Georgiana must a. warn the executives against operating in the European Union due to restrictive labor laws. b. frankly communicate whether the firms current human resources have the capabilities to handle such a strategy. c. raise the ethical issues of opening a branch in a country known for legalization of soft drugs, prostitution, and other alternative lifestyles. d. meet the strategys requirement no matter what the current state of the companys human resources. ANS: B OBJ: 1 TOP: Application PTS: 1 DIF: Challenging NAT: AACSB Analytic REF: p. 37 LOC: Strategy

7. As an HR consultant calling on businesses, you can expect that a. most of the organizations will have a strong link between overall strategic planning and HR. b. most the organizations will not monitor effectiveness and productivity statistics. c. fewer than one-quarter of the businesses will have an HR strategy. d. top management of most of the firms actively assesses HR on its strategic contributions to the organization. ANS: B OBJ: 1 TOP: Application PTS: 1 DIF: Challenging NAT: AACSB Reflective Thinking REF: p. 37 LOC: Strategy

8. All of the following are considered HR best practices EXCEPT a. paying employees high wages and incentives. b. high focus on training and cross-training employees. c. allowing workforce levels to fluctuate with product/service demand. d. promoting employees from within. ANS: C OBJ: 1 TOP: Conceptual PTS: 1 DIF: Moderate NAT: AACSB Reflective Thinking REF: p. 37 LOC: Strategy

9. As an ambitious young HR professional, you want to advance to the top HR executive position in your organization by having the perspective and expertise to contribute to the strategic planning process. You should a. hone your skills in a technical HR area such as compensation or HR information systems. b. learn the financials of your organization and the key drivers of its success.

c. learn to think like a lawyer because most HR functions are driven by employment law. d. ask to be transferred into areas of the organization that are proven training grounds for top executives, such as finance and marketing. ANS: B OBJ: 1 TOP: Application PTS: 1 DIF: Moderate NAT: AACSB Analytic REF: p. 38 LOC: Strategy

10. A ____ is a unique capability that creates high value and differentiates the organization from its competition. a. core competency b. critical capability c. value-creating characteristic d. competitive advantage ANS: A OBJ: 1 TOP: Definitional PTS: 1 DIF: Moderate NAT: AACSB Reflective Thinking REF: p. 38 LOC: Strategy

11. "The shared values and beliefs of a workforce" is called the organizational a. climate. b. culture. c. atmosphere. d. persona. ANS: B OBJ: 1 TOP: Definitional PTS: 1 DIF: Easy NAT: AACSB Reflective Thinking REF: p. 38 LOC: Group Dynamics

12. Which of the following is TRUE in forming HR strategy? a. The past is irrelevant. b. The past can help predict the future. c. The present is the best guide to the future. d. The impact of strategy is limited to the present. ANS: B OBJ: 1 TOP: Conceptual PTS: 1 DIF: Easy NAT: AACSB Reflective Thinking REF: p. 38 LOC: Strategy

13. As vice-president of HR, you are helping your companys executive committee plan a highlyexperimental manufacturing process. It will be using unusual, non-traditional technology and work structure to produce an innovative product. There is a significant possibility the venture will fail, but if it is successful, the profits will be immense. Your company has manufactured a related product line for over 50 years using traditional methods. With your knowledge of organizational culture you suggest that a. it would be best to try this process in an existing plant with senior employees selected to form the core workforce. b. since this is a new manufacturing process, the appropriate HR policies and procedures will not be apparent until the plant is actually up and operating. c. although a new location would be best, it is important that HR policies and practices promote the organizations traditional and unique culture in the new plant. d. it would be best to try this process with new employees in a separate location with new HR policies and practices. ANS: D PTS: 1 DIF: Moderate REF: p. 38

OBJ: 1 TOP: Application

NAT: AACSB Analytic

LOC: Strategy

14. Clement, the director of HR for an engineering firm, has noticed a high level of turnover by key engineers. In his investigation, he has found that they are moving to competing organizations for similar pay and benefits. Clement should a. increase the number of engineers hired to offset the high turnover rate. b. be more careful to hire engineers with a stable employment history. c. implement higher pay and benefits for key engineers. d. investigate how key engineers view the firms culture. ANS: D OBJ: 1 TOP: Application PTS: 1 DIF: Challenging NAT: AACSB Analytic REF: p. 39 LOC: Group Dynamics

15. People can be a core competency to a firm if they a. have thoroughly internalized the organizations culture. b. have consistently high levels of performance. c. have training unique to a particular industry. d. have special skills that cannot be easily imitated by competitors. ANS: D OBJ: 1 TOP: Conceptual PTS: 1 DIF: Moderate NAT: AACSB Reflective Thinking REF: p. 39 | Figure 2-3 LOC: Strategy

16. Perspectivo, Inc., is a new company that is growing rapidly both in sales and in numbers of employees. The culture of the firm is informal and highly-collaborative. The employees are highly psychologically invested in the success of the organization and tend to subordinate their personal lives to the organizations needs. Selene is interviewing for a position at Perspectivo. a. If Selene joins Perspectivo, she can expect that the organization will demand a workaholic lifestyle for as long as she remains with the firm. b. The Perspectivo culture will give Selene clear and consistent indications of how she should behave. c. Selene should not assume that the corporate culture of Perspectivo will be the same in 10 years as it is now. d. Selene should choose another organization if she values change and thrives on ambiguity. ANS: C OBJ: 1 TOP: Application PTS: 1 DIF: Moderate NAT: AACSB Analytic REF: p. 39 LOC: Group Dynamics

17. The ____ of a workforce can be measured as the total cost of people per unit of output. a. profitability b. effectiveness c. productivity d. efficiency ANS: C OBJ: 2 TOP: Conceptual PTS: 1 DIF: Challenging NAT: AACSB Reflective Thinking REF: p. 40 LOC: Strategy

18. ____ is computed by dividing the average cost of workers by their average levels of output. a. Profitability b. Unit labor cost c. Cost effectiveness

d. Production effectiveness ANS: B OBJ: 2 TOP: Conceptual PTS: 1 DIF: Moderate NAT: AACSB Reflective Thinking REF: p. 40 LOC: Strategy

19. Which of the following statements is TRUE? a. Productivity affects total costs in a not-for-profit organization. b. Unit labor costs are irrelevant for not-for-profit organizations. c. For-profit and not-for-profit organizations are both responsible to shareholders.. d. Not-for-profit organizations must operate in such a way that operating costs equal revenues. ANS: A OBJ: 2 TOP: Conceptual PTS: 1 DIF: Challenging NAT: AACSB Reflective Thinking REF: p. 40 LOC: Strategy

20. Which of the following activities would NOT be recommended for productivity improvements? a. recomputing unit labor costs so that some labor cost factors were reassigned to other factors of production b. outsourcing work to vendors c. replacing workers with labor-saving machinery d. redesigning the work so that fewer workers can perform multiple job tasks ANS: A OBJ: 2 TOP: Conceptual PTS: 1 DIF: Moderate NAT: AACSB Reflective Thinking REF: p. 40 LOC: Strategy

21. Productivity a. is purely a function of quantity of output. b. is a measure of both quantity and quality. c. measures are possible for jobs with a tangible product, but not for jobs with an intangible output, such as services. d. is best measured at the organizational level. ANS: B OBJ: 2 TOP: Conceptual PTS: 1 DIF: Moderate NAT: AACSB Reflective Thinking REF: p. 40 LOC: Strategy

22. Herman is the newly-hired director of HR for a department store. Hermans major objective is to improve sales staff productivity. After careful observation, Herman has discovered that the sales staff is paid by commission on each sale and that staffing levels in each department are maintained at the bare minimum in order to save labor costs. The stores competitive strategy is reflected in the motto Quality Customer Service: Each Time, Every Time. Herman concludes that a. the job description of sales staff must be redesigned so that the staff can perform both sales and customer service activities. b. the organization should be restructured so that sales staff do not have to report to a sales manager. c. the HR activities of the store are not aligned to contribute to organizational effectiveness. d. the company should consider hiring contractors to increase the number of sales staff in each department. ANS: C OBJ: 2 TOP: Application PTS: 1 DIF: Challenging NAT: AACSB Analytic REF: p. 40 LOC: Strategy

23. Which of the following actions would have the most NEGATIVE impact on customer service? a. implementing Balanced Scorecard processes which focus on high manufacturing quality. b. focusing on HR as a financial contributor to the organization. c. reducing staffing levels. d. slowing the rate of employee turnover. ANS: C OBJ: 2 TOP: Conceptual PTS: 1 DIF: Moderate NAT: AACSB Reflective Thinking REF: p. 41 LOC: Strategy

24. As organizations expand operations world-wide they go through three stages. Which of the following is the FIRST of these stages? a. importing and exporting b. transnational operations c. multi-national enterprises d. global operations ANS: A OBJ: 3 TOP: Conceptual PTS: 1 DIF: Easy NAT: AACSB Reflective Thinking REF: p. 42 LOC: Strategy

25. If a school of veterinary science meets its goal of graduating 50 doctors of veterinary medicine every year, it can be said to be a. efficient. b. effective. c. achieving a strong ROI. d. profitable. ANS: B OBJ: 2 TOP: Application PTS: 1 DIF: Challenging NAT: AACSB Analytic REF: p. 42 LOC: Strategy

26. In order to calculate the return on investment of a new applicant skills testing procedure, all the following EXCEPT ____ would be included in the calculation. a. legal expenses before and after implementation of the testing procedure b. the cost of testing materials and HR staff time spent in conducting the tests c. productivity levels of employees hired using the testing procedure d. promotion rates of employees hired using the testing procedure ANS: A OBJ: 2 TOP: Application PTS: 1 DIF: Moderate NAT: AACSB Reflective Thinking REF: p. 42 LOC: Strategy

27. ROI is the organizations a. return on interest. b. return on investment. c. return on innovation. d. return on intangible assets. ANS: B OBJ: 2 TOP: Definitional PTS: 1 DIF: Easy NAT: AACSB Reflective Thinking REF: p. 42 LOC: Strategy

28. A retail pharmacy chain is experiencing low profitability. It is looking into ways to cut costs. One of the members of the executive committee suggests reducing the number of pharmacists on staff, since they are the most highly-paid of the store employees. As director of HR, you are most concerned whether this move would a. be efficient in the short run. b. be effective in the long run. c. result in the obsolescence of the firms succession plans. d. be consistent with the organizational culture. ANS: B OBJ: 2 TOP: Application PTS: 1 DIF: Moderate NAT: AACSB Analytic REF: p. 42 LOC: Strategy

29. Rebecca, the vice president of HR for Ginx Enterprises, is in the process of learning the employmentrelated laws and regulations of the European Union, so that she knows how staffing, training, compensation, health and safety, and labor relations practices at Ginx Enterprises must be adapted when the company opens a new plant in the EU next year. Hilliard Enterprises is about to become a/an a. importer-exporter to the EU. b. expatriate firm. c. multi-national enterprise. d. global organization. ANS: C OBJ: 3 TOP: Application PTS: 1 DIF: Challenging NAT: AACSB Analytic REF: p. 43 LOC: Strategy

30. A company having corporate units in a number of countries integrated to operate worldwide is called a a. global organization. b. worldwide corporation. c. multi-national enterprise. d. pan-domestic firm. ANS: A OBJ: 3 TOP: Definitional PTS: 1 DIF: Easy NAT: AACSB Reflective Thinking REF: p. 43 LOC: Strategy

31. Angelo speaks Italian, English, and French fluently. He has lived and worked in both Italy and France and has an MBA from a prestigious U.S. university. Angelos friends describe him as incredibly cosmopolitan and a person who blends in like a native wherever he is. Angelo probably has a/an ____ and would be a good candidate for a company looking to build its international business. a. Euro-centric focus b. Extroverted personality c. entrepreneurial tendency d. global mindset ANS: D OBJ: 3 TOP: Application PTS: 1 DIF: Moderate NAT: AACSB Analytic REF: p. 43 LOC: Strategy

32. Trunkline Chemicals is considering opening a manufacturing plant in Vietnam. As director of HR, you assign a committee of HR staff to investigate all of the following factors EXCEPT a. how the addition of ethnic Vietnames workers will affect the companys affirmative action goals. b. the stability of the political environment in Vietnam. c. Vietnamese laws regarding compensation.

d. the role and nature of labor unions in Vietnam. ANS: A OBJ: 3 TOP: Application PTS: 1 DIF: Moderate NAT: AACSB Analytic REF: p. 43 LOC: Environmental Influence

33. Hofstede defined five dimensions for classifying national cultures. Which of the following is NOT one of these dimensions? a. masculinity-femininity b. secular/theocratic c. individualism d. power distance ANS: B OBJ: 3 TOP: Definitional PTS: 1 DIF: Easy NAT: AACSB Reflective Thinking REF: p. 44 LOC: Environmental Influence

34. Which of the following statements is TRUE? a. The U.S. has the highest hourly wage rates for manufacturing production workers in the world. b. Several northern European countries have higher hourly wage rates for manufacturing production workers than does the U.S. c. Chinas hourly wage rate for manufacturing production workers is nearly as high as the wage rate in Mexico. d. A company considering moving a manufacturing production plant to Taiwan would pay approximately the same wage rate as if it moved to Brazil. ANS: B OBJ: 3 TOP: Conceptual PTS: 1 DIF: Moderate NAT: AACSB Reflective Thinking REF: p. 44 | Figure 2-5 LOC: Environmental Influence

35. Global employers who manufacture products in countries with extremely low wages and substandard working conditions counter the accusation that they are sweatshop employers by arguing a. wages and working conditions were poor in the U.S. during the Industrial Revolution and this is a phase of development that all economies must eventually go through in order to advance. b. as these countries become more prosperous because of the increased level of employment, then the wage-rates paid by all employers in those countries will rise. c. they are bringing the benefits of Western business practices to the workers in these countries. d. their operations allow these employees to have jobs and thus improve their living standards. ANS: D OBJ: 3 TOP: Conceptual PTS: 1 DIF: Challenging NAT: AACSB Ethics REF: p. 45 LOC: Ethical Responsibilities

36. ____ is the process of analyzing and identifying the need for and availability of human resources so that the organization can meet its objectives. a. Human resource planning b. Environmental scanning c. Labor market analysis d. Strategic planning ANS: A PTS: 1 DIF: Easy REF: p. 45

OBJ: 4 TOP: Definitional

NAT: AACSB Reflective Thinking

LOC: HRM

37. The Wickham County Hospital is the only full-service hospital providing care in Wickham County. The population of Wickham Country has been increasing by 10 percent a year the last two years, and projections are that the population will grow even more rapidly in the next ten years. To serve the increased need, next year the hospital will open a new wing doubling the number of beds in the hospital. The HR planning for next year must include all of the following EXCEPT a. analysis of the current employees knowledge, skills and abilities. b. predicting the turnover in each job description in the hospital. c. predicting the number of new employees needed in each job to staff the new wing. d. evaluation of the impact of the expansion on organizational culture. ANS: D OBJ: 4 TOP: Application PTS: 1 DIF: Easy NAT: AACSB Analytic REF: p. 45 LOC: HRM

38. Which of the following organizational events would NOT affect HR planning? a. declining quality of the communitys schools. b. technological changes in the manufacturing process. c. changing the accounting software used by the company. d. opening a branch office in Johannesburg, South Africa. ANS: C OBJ: 4 TOP: Conceptual PTS: 1 DIF: Challenging NAT: AACSB Analytic REF: p. 45 LOC: HRM

39. Which of the following best describes the responsibility for HR planning? a. HR planning is the responsibility of the top HR executive. b. Typically, HR planning is the responsibility of operating managers. c. The top HR executive and subordinate staff specialists have most of the responsibility for HR planning. d. HR planning is the responsibility of the organization's top management. ANS: C OBJ: 4 TOP: Conceptual PTS: 1 DIF: Moderate NAT: AACSB Reflective Thinking REF: p. 45 LOC: HRM

40. The HR unit's responsibilities during the planning process typically include a. identifying supply-and-demand needs for each department. b. implementation of HR plans as approved by top management. c. integration of HR plans with departmental plans. d. monitoring the HR plan to identify changes needed. ANS: B OBJ: 4 TOP: Conceptual PTS: 1 DIF: Moderate NAT: AACSB Reflective Thinking REF: p. 46 | Figure 2-6 LOC: HRM

41. Chipper, the only grandchild of the founder of a successful commercial construction firm has just graduated from a noted university with a Ph.D. in zoology. Chipper is taking a years research fellowship at the San Diego Zoo to study tiger genetics. The top management positions in the firm have been held by family members since 1911. Chippers father, the present CEO, is 72 and has recently had heart surgery. The firm usually generates about $300 million in government highway projects per year. Which of the following statements is FALSE? a. This business has a succession problem.

b. Years ago, this firm should have focused on attracting and retaining outsiders with key capabilities. c. It is time for Chipper to get serious and take over the family firm. d. This is not an unusual situation for a family firm. ANS: C OBJ: 4 TOP: Application PTS: 1 DIF: Moderate NAT: AACSB Analytic REF: p. 46 LOC: HRM

42. One of the top challenges faced by family-owned firms is a. tax planning. b. anti-nepotism legislation. c. providing jobs for extended-family members. d. management succession. ANS: D OBJ: 4 TOP: Conceptual PTS: 1 DIF: Easy NAT: AACSB Reflective Thinking REF: p. 46 LOC: HRM

43. The HR planning process begins with a. considering the organizational objectives and strategies. b. scanning the external environment for changes affecting the labor supply. c. analyzing the internal inventory of HR capabilities. d. forecasting the relationship between supply and demand for human resources. ANS: A OBJ: 4 TOP: Conceptual PTS: 1 DIF: Moderate NAT: AACSB Reflective Thinking REF: p. 46-47 | Figure 2-7 LOC: HRM

44. Scanning the external environment is especially important for HR planning because a. of the limited supply of potential employees for all jobs in the firm. b. of the demographic patterns of the internal workforce. c. the organization must draw from the same labor market that supplies all other employers. d. the organization must meet certain affirmative action quotas. ANS: C OBJ: 4 TOP: Conceptual PTS: 1 DIF: Moderate NAT: AACSB Reflective Thinking REF: p. 47 LOC: Environmental Influence

45. In order to identify threats and opportunities in the world outside the organization, HR managers must a. evaluate the external workforce. b. conduct a competitive analysis. c. engage in environmental scanning. d. perform a global analysis. ANS: C OBJ: 4 TOP: Definitional PTS: 1 DIF: Easy NAT: AACSB Reflective Thinking REF: p. 47 LOC: Environmental Influence

46. The ability of an organization to compete with other organizations for a sufficient supply of human resources with the appropriate capabilities is a. an indicator of HR efficiency. b. one measure of organizational effectiveness. c. governed by the ability to offer job security. d. one input to the environmental scanning process.

ANS: B OBJ: 4 TOP: Conceptual

PTS: 1 DIF: Moderate NAT: AACSB Reflective Thinking

REF: p. 47 LOC: Strategy

47. Which of the following government regulations do NOT affect HR planning? a. pension laws. b. tax benefits for job-training expenses. c. regulations on the length of the work week. d. reporting requirements for workers compensation claims. ANS: D OBJ: 4 TOP: Conceptual PTS: 1 DIF: Easy NAT: AACSB Reflective Thinking REF: p. 48 LOC: Legal Responsibilities

48. As the unemployment rate declines, a. the need for overtime also declines. b. early retirement plans become more attractive. c. people available for work tend to have poor qualifications. d. it becomes easier to fill jobs with skilled workers. ANS: C OBJ: 4 TOP: Conceptual PTS: 1 DIF: Moderate NAT: AACSB Reflective Thinking REF: p. 48 LOC: Environmental Influence

49. Which of the following has been a geographic trend within the last decade that has forced changes in HR plans? a. the movement of better educated workers to the Midwest b. the influx of highly skilled technical workers from Asia and India c. the deterioration of inner cities d. the outsourcing of jobs to countries with lower wage levels. ANS: D OBJ: 4 TOP: Conceptual PTS: 1 DIF: Moderate NAT: AACSB Reflective Thinking REF: p. 48 LOC: Environmental Influence

50. Arden Glassworks has been the major employer in the town of Arden for over 20 years, drawing mainly on the low and semi-skilled labor force. Now, a large telephone marketing firm is opening an operation in Arden which will also employ low and semi-skilled workers. Which of the following statements is TRUE? a. Since Arden and the marketing firm are in different industries, the impact on Ardens workforce will be minimal. b. Arden will need to offer higher pay and benefits to its employees in order to keep them from moving to the new employer. c. The marketing firm would only open a new operation in a geographic location that has a low average wage so that it can minimize labor costs. Consequently, there will be no upward pressure on the wages and benefits Arden must pay. d. Since Arden and the marketing firm are in the same geographic area, Arden will need to consider the pay scales and benefits the new firm will offer. ANS: D OBJ: 4 TOP: Application PTS: 1 DIF: Moderate NAT: AACSB Analytic REF: p. 48 LOC: Environmental Influence

51. All of the following are trends in the composition of the workforce EXCEPT a. the aging of the workforce.

b. the availability of contingent workers. c. outsourcing. d. the falling age of workforce entry. ANS: D OBJ: 4 TOP: Conceptual PTS: 1 DIF: Moderate NAT: AACSB Reflective Thinking REF: p. 48 LOC: Environmental Influence

52. A comprehensive audit of all current jobs provides a basis for a. forecasting what jobs will need to be done in the future. b. an analysis of the capabilities of the companys workforce. c. human capital accounting. d. the effectiveness and efficiency of the companys human resources. ANS: A OBJ: 4 TOP: Conceptual PTS: 1 DIF: Moderate NAT: AACSB Reflective Thinking REF: p. 49 LOC: HRM

53. Much of the data needed for a comprehensive audit of all current jobs is to be found in the a. employee evaluations. b. supervisory files. c. existing staffing and organizational databases. d. personnel update forms completed by employees. ANS: C OBJ: 4 TOP: Conceptual PTS: 1 DIF: Easy NAT: AACSB Reflective Thinking REF: p. 49 LOC: HRM

54. An HR planner should ask which of the following questions when auditing jobs? a. What is the demographic profile of the current job holders? b. How essential is each job? c. Which jobs have the highest turnover rate? d. Who is responsible for staffing the organization? ANS: B OBJ: 4 TOP: Conceptual PTS: 1 DIF: Moderate NAT: AACSB Reflective Thinking REF: p. 49 LOC: HRM

55. What is the basic source of data on current employees and their capabilities? a. employee evaluations b. supervisory files c. personnel update forms completed by employees d. HR records in the organization ANS: D OBJ: 4 TOP: Conceptual PTS: 1 DIF: Moderate NAT: AACSB Reflective Thinking REF: p. 50 LOC: HRM

56. The information in the employee skills inventory data bank a. should be posted on the companys intranet. b. should be available only to those who have a specific use for it. c. can include non-job-related data on employees. d. is most useful in its measurement of the workforces soft skills. ANS: B OBJ: 4 PTS: 1 DIF: Easy NAT: AACSB Technology REF: p. 50 LOC: Information Technologies

TOP: Conceptual 57. Vincent, the vice president of HR, is studying the profile of the organizations workforce. Vincents employer is a utility company and essentially provides life-time employment for workers, and the turnover rate is very low. Vincents eye is caught by a troubling aspect of the profile, and he says to himself, This must be the result of the 7-year hiring freeze we had back in the 1970s, and the lowlevel of hiring through the 1990s. Vincent has probably noticed a. a statistical bulge in the number of employees in mid-career. b. an organizational profile heavily weighted toward employees with low seniority levels. c. a lack of young female and minority employees. d. a gap between younger workers and workers who will be retiring in the next 10 years. ANS: D OBJ: 4 TOP: Application PTS: 1 DIF: Challenging NAT: AACSB Analytic REF: p. 50-51 LOC: HRM

58. Which of the following statement is TRUE regarding forecasting methods? a. Subjective judgment has no place in modern HR forecasting. b. Research has shown that mathematical models are inadequate for HR forecasting. c. Forecasting is a combination of quantitative methods and subjective judgment. d. Complex computer simulations are able to project HR supply and demand accurately over the long-range. ANS: C OBJ: 4 TOP: Conceptual PTS: 1 DIF: Moderate NAT: AACSB Reflective Thinking REF: p. 51 LOC: HRM

59. Andrea, the director of HR for a large insurance company, is evaluating locations in different states for appropriateness of relocating the companys headquarters. The external supply of potential workers plays a dominant role in the decision. Andrea needs to analyze all of the following factors regarding the external supply of labor EXCEPT a. the number and types of graduates from schools and colleges in the different locations. b. economic forecasts for the next three years for the different locations. c. the anticipated shifts in the technology of the work processes in the insurance company. d. the anticipated attrition from each job in the organization for the next three years. ANS: D OBJ: 4 TOP: Application PTS: 1 DIF: Challenging NAT: AACSB Analytic REF: p. 51 LOC: Environmental Influence

60. An intermediate planning range usually projects ____ into the future. a. six months to one year b. one to five years c. three to five years d. beyond five years ANS: B OBJ: 4 TOP: Definitional PTS: 1 DIF: Easy NAT: AACSB Reflective Thinking REF: p. 51 LOC: HRM

61. The forecast for openings for store managers in a retail chain must include all of the following EXCEPT a. the number of store managers who are expected to quit in the coming year. b. the number of store managers who will be promoted to regional manager in the coming year.

c. the number of store managers who will qualify for management development training in the coming year. d. the number of store managers who will be terminated in the coming year. ANS: C OBJ: 4 TOP: Application PTS: 1 DIF: Easy NAT: AACSB Analytic REF: p. 51 LOC: HRM

62. If managers are responsible for entering and updating employee information in skills databases, a. they may be tempted to minimize subordinates skills in order to retain these employees in their departments. b. they tend to exaggerate their subordinates proficiency levels in order to appear to be more competent leaders. c. they tend to minimize the skills of subordinates who they consider threats to their own advancement. d. the accuracy and completeness of the data is consistently higher than if employees enter the data. ANS: A OBJ: 4 TOP: Conceptual PTS: 1 DIF: Moderate NAT: AACSB Reflective Thinking REF: p. 51 LOC: Individual Dynamics

63. The decision rule for which proportion of openings in a particular job will be staffed from various sources: promotions, transfers, and new hires is called the a. fill rate. b. placement ratio. c. internal versus external placement proportion. d. make versus buy ratio. ANS: A OBJ: 4 TOP: Definitional PTS: 1 DIF: Easy NAT: AACSB Reflective Thinking REF: p. 52 LOC: HRM

64. Government labor force population estimates and trends in industry are used to a. estimate the internal supply of labor. b. build succession plans. c. forecast the external supply of human resources. d. predict terminations, retirements, and deaths of employees. ANS: C OBJ: 4 TOP: Conceptual PTS: 1 DIF: Easy NAT: AACSB Reflective Thinking REF: p. 52 LOC: HRM

65. All of the following situations will decrease the accuracy of the estimate of the internal supply of labor for a particular organizational department EXCEPT a. life expectancies of certain demographic groups change. b. unanticipated technology shifts in the work process occur. c. backup candidates for promotion leave the organization. d. fewer employees take retirement than expected. ANS: A OBJ: 4 TOP: Conceptual PTS: 1 DIF: Easy NAT: AACSB Reflective Thinking REF: p. 51 LOC: HRM

66. The human capital crisis in the federal government is an illustration of

a. b. c. d.

the need for intensive succession planning in the federal government. the governments mistake of hiring a large number of baby boomers in the 1970s. the fact that replacement of employees is more difficult as they age. the fact that most of the federal governments older workers are unskilled in the new technologies needed to be efficient and effective in the modern world. PTS: 1 DIF: Moderate NAT: AACSB Reflective Thinking REF: p. 52-53 LOC: HRM

ANS: A OBJ: 4 TOP: Application

67. The internal supply of human resources is most strongly influenced by a. actions of competing employers. b. training and development programs. c. government regulations and pressures. d. college graduation rates in high-demand fields of study. ANS: B OBJ: 4 TOP: Conceptual PTS: 1 DIF: Easy NAT: AACSB Reflective Thinking REF: p. 52 LOC: HRM

68. When compiling an inventory of organizational capabilities, the HR manager would include all of the following data on current employees EXCEPT a. time in present job. b. pay rates. c. organizational commitment. d. work accomplishments. ANS: C OBJ: 4 TOP: Conceptual PTS: 1 DIF: Easy NAT: AACSB Technology REF: p. 53 LOC: Information Technologies

69. Vendome Products will have a labor surplus of 15% in its non-exempt employee ranks next year because of decreases in sales of its major product line. Vendome will a. need to transfer non-exempt employees into exempt-level jobs. b. have to implement workforce reductions. c. be compelled to limit promotions among nonexempt employees in this department. d. restructure the organization so as to redeploy the current excess of non-exempt employees. ANS: B OBJ: 5 TOP: Application PTS: 1 DIF: Moderate NAT: AACSB Analytic REF: p. 53 LOC: HRM

70. Alicia is an assistant HR manager for one of the largest law firms in the state. She has been assigned to estimate the outflows from the law firms ranks of paralegals. In order to do this, Alicia must include all of the following factors EXCEPT potential ____ among the current paralegal staff. a. promotions b. deaths c. pregnancies d. retirements ANS: C OBJ: 4 TOP: Application PTS: 1 DIF: Moderate NAT: AACSB Analytic REF: p. 53 | Figure 2-8 LOC: HRM

71. 53 A common flaw in succession planning is that

a. it focuses more on involuntary departures than on voluntary departures of employees. b. it tends to be implemented mainly by firms in high-technology industries and not in organizations which are less volatile. c. it places too much attention on replacing retiring employees and not on employees who leave the organization for better career opportunities. d. it is limited to planning for the departure of key executives. ANS: D OBJ: 4 TOP: Conceptual PTS: 1 DIF: Moderate NAT: AACSB Reflective Thinking REF: p. 53 LOC: HRM

72. What is purpose of the Worker Adjustment and Retraining Notification (WARN) Act? a. It requires employers to give a 60-day notice before a layoff or facility closing involving more than 50 people. b. It mandates job retraining for workers who are laid off for economic reasons. c. It requires employers to provide outplacement and severance pay for workers who are terminated in mass layoffs. d. It establishes a school-to-work program for the "hardcore unemployed." ANS: A OBJ: 5 TOP: Conceptual PTS: 1 DIF: Easy NAT: AACSB Reflective Thinking REF: p. 54 LOC: Legal Responsibilities

73. Downsizing an organization typically has all of the following effects on the organization EXCEPT a. demoralization of surviving employees. b. short-term reduction in labor costs. c. revenue generation. d. culture change. ANS: C OBJ: 5 TOP: Conceptual PTS: 1 DIF: Moderate NAT: AACSB Reflective Thinking REF: p. 54 LOC: Individual Dynamics

74. Attrition to reduce an employee surplus is most useful when a. turnover rates in the organization are high. b. hiring programs are not affected. c. the workforce reduction is needed in the short-term. d. the employer wishes to stimulate a culture change. ANS: A OBJ: 5 TOP: Conceptual PTS: 1 DIF: Moderate NAT: AACSB Reflective Thinking REF: p. 54 LOC: HRM

75. ____ occurs when individuals who quit, die or retire are not replaced. a. Downsizing b. Attrition c. Workforce depletion d. A hiring freeze ANS: B OBJ: 5 TOP: Definitional PTS: 1 DIF: Easy NAT: AACSB Reflective Thinking REF: p. 54 LOC: HRM

76. Backroads Merchandise, an Oklahoma-based manufacturer of outdoors and sports products, is facing a pronounced downturn in business due to lower-priced products from foreign competitors. Top management is concerned that this will be a permanent or long-term problem and they have decided to reduce the number of employees. The CEO has conferred with the director of HR to learn which method of reducing the workforce will be received better by both the employees leaving and the employees remaining behind. The CEO also wishes to minimize the cost of the reduction process. The director of HR has suggested the use of a. layoffs with the option of re-hire when business revives. b. voluntary separations with severance. c. attrition and a hiring freeze. d. early retirement buyouts. ANS: C OBJ: 5 TOP: Application PTS: 1 DIF: Moderate NAT: AACSB Analytic REF: p. 54 LOC: HRM

77. In which of the following are employees put on unpaid leaves of absence, and they may be called back if business improves? a. attrition b. buyouts c. employment-at-will terminations d. layoffs ANS: D OBJ: 5 TOP: Definitional PTS: 1 DIF: Easy NAT: AACSB Reflective Thinking REF: p. 55 LOC: HRM

78. Beyond the upfront costs, voluntary separation programs often have the following drawback a. the enhancement of the paternalistic culture of the organization leads employees to feel a sense of entitlement. b. the method is viewed as less humane than layoffs with severance pay. c. significant loss of morale by survivors, which affects turnover and productivity. d. some people who take advantage of the program are employees the company wishes would remain. ANS: D OBJ: 5 TOP: Conceptual PTS: 1 DIF: Moderate NAT: AACSB Reflective Thinking REF: p. 55 LOC: HRM

79. COBRA is a lifeline for employees who have been laid off because a. it continues the employees medical benefits for up to 18 months at the employers expense. b. it continues the employees medical benefits for up to 18 months if the employee pays the premium. c. it allows employees to have medical benefits through Medicaid for up to 18 months with no fee. d. it transfers the employees medical benefits from the employees individual policy to a group policy for a discounted fee for up to 18 months. ANS: B OBJ: 5 TOP: Definitional PTS: 1 DIF: Moderate NAT: AACSB Reflective Thinking REF: p. 55 LOC: Legal Responsibilities

80. ____ is a group of services provided to employees who have been involuntarily removed from the organization because of performance problems or elimination of jobs. These services give these former employees support and assistance in finding new jobs. a. Outplacement b. Career repositioning c. Transition support d. Severance ANS: A OBJ: 5 TOP: Definitional PTS: 1 DIF: Easy NAT: AACSB Reflective Thinking REF: p. 55 LOC: HRM

81. A surplus of employees due to a temporary downturn in business is best handled by a. layoffs. b. attrition. c. voluntary separation programs. d. early retirement buyouts. ANS: A OBJ: 5 TOP: Conceptual PTS: 1 DIF: Easy NAT: AACSB Reflective Thinking REF: p. 55 LOC: HRM

82. FreeFormPress has experienced a significant increase in the number of magazines it publishes. But, FreeForm is concerned that several of its existing clients may leave at the end of their current contracts. Rather than hiring additional permanent employees to handle the new clients, FreeFormPress can choose any of the following options EXCEPT a. hiring contingent workers. b. requiring employees to work overtime. c. outsourcing excess work to other publishers. d. freezing internal transfers and promotions ANS: D OBJ: 5 TOP: Application PTS: 1 DIF: Easy NAT: AACSB Analytic REF: p. 55 LOC: HRM

83. A major advantage of voluntary separation programs is that a. WARN does not apply in these cases. b. employers are able to immediately realize labor cost reductions. c. it is easy to predict which employees will take advantage of the separation offers. d. employees view the process as more acceptable and humane than layoffs. ANS: D OBJ: 5 TOP: Conceptual PTS: 1 DIF: Moderate NAT: AACSB Reflective Thinking REF: p. 55 LOC: Individual Dynamics

84. ____ is critically important in mergers and acquisitions because it is the extent to which decisionmaking styles, levels of team work, information sharing philosophies, and the formality of the two organizations are similar. a. Philosophical concordance b. Strategic alignment c. Cultural compatibility d. Normative consonance ANS: C OBJ: 5 PTS: 1 DIF: Easy NAT: AACSB Reflective Thinking REF: p. 56 LOC: Group Dynamics

TOP: Conceptual 85. Faced with a severe, long-term drop-off in the demand for their products, a company that manufactures replacement parts for airplanes must cut its workforce by 15%. The HR department must generate plans for making the workforce reduction more effective. This plan must include all of the following EXCEPT a. developing a plan for communicating information about the workforce reduction to employees. b. the involvement of key managers in workforce reduction planning. c. outsourcing the termination interviews and administrative processing. d. providing for nurturing of employees who survive the workforce reduction. ANS: C OBJ: 5 TOP: Application PTS: 1 DIF: Moderate NAT: AACSB Analytic REF: p. 56 | Figure 2-9 LOC: HRM

86. According to the case in the textbook, the main reason that Daimler and Chrysler experienced a difficult merger was that a. the work processes of the two companies could not be easily combined. b. the two organizational cultures were incompatible. c. massive layoffs demoralized the survivors in both German and American plants. d. the core businesses of Daimler and Chrysler were too different. ANS: B OBJ: 5 TOP: Application PTS: 1 DIF: Easy NAT: AACSB Reflective Thinking REF: p. 56 LOC: Strategy

87. Henry is a internal auditor for Mountain Home Mills. A credible rumor is circulating that Mountain Home is about to be acquired by its main competitor, PrairieBelle Foods. Mountain Home and PrairieBelle Foods make almost identical products, and the two headquarters will be combined at the PrairieBelle Foods Chicago location. Henry decides a. this is a good time to buy a new home as the acquisition will improve pay rates for employees. b. to update his resume and become more familiar with the job market for internal auditors. c. to ask for a promotion to senior internal auditor because the new circumstances will require higher staffing in the internal auditing department. d. to take a vacation because the upcoming turmoil at the company will be unpleasant. ANS: B OBJ: 5 TOP: Application PTS: 1 DIF: Moderate NAT: AACSB Analytic REF: p. 57 LOC: Individual Dynamics

88. Paula is the vice president for HR of PrairieBelle Foods. It has just acquired Mountain Mills. Paula will oversee considerable layoffs as the company lays off redundant employees. In considering HR planning for the next year, Paula knows to be prepared for a. an upsurge in applications for jobs from external candidates. b. a increase in resignations. c. heightened productivity by survivors. d. increase in morale of remaining employees. ANS: B OBJ: 5 TOP: Application PTS: 1 DIF: Moderate NAT: AACSB Analytic REF: p. 56 LOC: Individual Dynamics

89. In a merger that is motivated by financial pressures, the HR department must

a. reduce voluntary employee turnover. b. eliminate employees with overlapping responsibilities. c. shift a larger proportion of the workforce from regular employment to contingent employment. d. cap raises and minimize benefits expenditures. ANS: B OBJ: 5 TOP: Conceptual PTS: 1 DIF: Moderate NAT: AACSB Reflective Thinking REF: p. 57 LOC: HRM

90. A cultural factor that makes a merger or acquisition more likely to be successful is a. if one organization is has strong internal integration and the other organization is weakly integrated. b. if both organizations have similar levels of employee trust in management. c. if both organizations limit employees freedom to make decisions about their jobs. d. a high level of diversity exists in both organizations. ANS: D OBJ: 5 TOP: Conceptual PTS: 1 DIF: Moderate NAT: AACSB Reflective Thinking REF: p. 57 LOC: Strategy

91. General Electrics formula for acquisition success is E = Q x A. Which of the following statements is TRUE about this formula? a. The success of the acquisition is a function of the quality of the surviving employees. b. The success of the acquisition is affected by the acceptance of the acquisition decision by the employees involved. c. The success of the acquisition is determined by the quantity of employees retained and the attitudes of the survivors. d. The success of the acquisition is a function of the employee productivity quotient multiplied by the adaptability of the survivors. ANS: B OBJ: 5 TOP: Conceptual PTS: 1 DIF: Moderate NAT: AACSB Reflective Thinking REF: p. 57 LOC: Strategy

92. As a senior member of the HR department at TransOceanic Industries, Abigail realizes that the firms upcoming merger with its main competitor will result in challenges in the year ahead. Abigail a. recognizes that stability in HR activities will be critically important, especially in the area of compensation and benefits. b. realizes that many of the TransOceanic HR employees will become redundant. c. anticipates that the two HR departments will continue separate operations. d. there will be a reduction in voluntary turnover at executive levels as key employees engage in a power struggle. ANS: B OBJ: 5 TOP: Application PTS: 1 DIF: Easy NAT: AACSB Analytic REF: p. 57 LOC: HRM

93. The main customers for HR services include all the following EXCEPT a. employees b. managers c. organizational clients d. other departments ANS: C PTS: 1 DIF: Easy REF: p. 58

OBJ: 6 TOP: Conceptual

NAT: AACSB Reflective Thinking

LOC: HRM

94. Useful metrics have all the following characteristics EXCEPT a. the measures provide subjective data. b. results can be compared both internally and externally. c. calculations can be clearly understood. d. measures are linked to strategic and operational objectives. ANS: A OBJ: 6 TOP: Conceptual PTS: 1 DIF: Easy NAT: AACSB Reflective Thinking REF: p. 58 LOC: HRM

95. All of the following are examples of HR metrics EXCEPT a. retention rate of legal secretaries at a law firm. b. number of tax clients processed by tax preparers at an accounting firm. c. average time to fill teller positions at a bank. d. unemployment levels in the metropolitan area. ANS: D OBJ: 6 TOP: Conceptual PTS: 1 DIF: Moderate NAT: AACSB Reflective Thinking REF: p. 59 | Figure 2-10 LOC: HRM

96. There are eight employees in the accounts receivable department. Four employees work 40 hours a week, and the other four employees work 20 hours a week. How many FTEs are there in this department? a. 4 b. 6 c. 8 d. 10 ANS: B OBJ: 6 TOP: Application PTS: 1 DIF: Moderate NAT: AACSB Analytic REF: p. 58-59 LOC: HRM

97. As director of HR for a large regional car dealership with 10 locations, Ed must calculate the potential return on investment (ROI) of implementing a new training program to improve car salespersons effectiveness in convincing new car buyers to finance the car through the dealership. In order to calculate the ROI of the new training program, he needs to collect all of the following data EXCEPT a. the cost of developing and implementing the new training program. b. the dollar value of potential additional new car financing through the dealership in the year following the training program. c. the cost of alternative productivity-enhancing training programs for car salespersons. d. the costs of running update seminars on the new methods for salespersons for one year following the initial training. ANS: C OBJ: 6 TOP: Application PTS: 1 DIF: Challenging NAT: AACSB Analytic REF: p. 59 LOC: HRM

98. The return on investment calculation shows the value of expenditures for HR activities. It also shows a. whether the HR department is effective in meeting organizational goals. b. the economic cost of HR to the firm. c. the value added per each HR staff member. d. how long it will take the HR activities to pay for themselves.

ANS: D OBJ: 6 TOP: Definitional

PTS: 1 DIF: Challenging NAT: AACSB Reflective Thinking

REF: p. 58 LOC: HRM

99. The new CEO of the firm has told the vice president of HR that all HR activities must use the cost of capital as the benchmark against which their the returns from the activities are measured. The new CEO is implementing a. economic value added (EVA). b. the balanced scorecard. c. subjective HR metrics. d. return on assets (ROA). ANS: A OBJ: 6 TOP: Application PTS: 1 DIF: Challenging NAT: AACSB Analytic REF: p. 59 LOC: HRM

100. Under the balanced scorecard approach, an organizations performance is measured using all of the following categories EXCEPT the ____ perspective. a. competitive b. learning and growth c. financial d. internal business processes ANS: A OBJ: 6 TOP: Conceptual PTS: 1 DIF: Challenging NAT: AACSB Reflective Thinking REF: p. 59-60 LOC: HRM

101. An example of an operational HR metric is a. revenue generated per FTE. b. the ROI of human capital expenditures. c. benefits cost as a percentage of payroll. d. the ratio of managers to non-managers. ANS: C OBJ: 6 TOP: Conceptual PTS: 1 DIF: Challenging NAT: AACSB Reflective Thinking REF: p. 59 | Figure 2-10 LOC: HRM

102. Which of the following statements is TRUE? a. Industries which have high median revenue per FTE also have high median income per FTE. b. The non-defense government sector has high median income per FTE compared with the private sector. c. Utilities have the highest median income per FTE of all industries. d. The revenue generated per FTE is a more important metric for analysis of HR effectiveness than is income generated per FTE. ANS: C OBJ: 6 TOP: Conceptual PTS: 1 DIF: Moderate NAT: AACSB Reflective Thinking REF: p. 60 | Figure 2-11 LOC: Strategy

103. Which of the following statements isTRUE about the balanced scorecard approach to measurement of HR performance? a. The balanced scorecard approach stresses the measurement of qualitative HR contributions rather than rather than tangible or financial contributions of HR.

b. A major advantage of the balanced scorecard approach is the speed with which it can be implemented. c. The balanced scorecard approach eliminates most of the subjectivity involved in measuring the strategic performance of HR in an organization. d. The balanced scorecard helps an organization understand the cost/benefit payoffs of its HR activities. ANS: D OBJ: 6 TOP: Conceptual PTS: 1 DIF: Moderate NAT: AACSB Reflective Thinking REF: p. 61 LOC: HRM

104. A(n) ____ is a formal research effort that evaluates the current state of HR management in an organization. a. EVA assessment b. a benchmarking study. c. HR audit d. utility analysis ANS: C OBJ: 6 TOP: Definitional PTS: 1 DIF: Moderate NAT: AACSB Reflective Thinking REF: p. 61 LOC: HRM

105. One approach to assessing HR effectiveness is ____, which compares specific measures of performance against data on those measures in other organizations. a. benchmarking b. ROI c. EVA d. the balanced scorecard ANS: A OBJ: 6 TOP: Definitional TRUE/FALSE 1. It is critical that HR executives be included immediately after top management has made strategic decisions. ANS: F OBJ: 1 TOP: Conceptual PTS: 1 DIF: Challenging NAT: AACSB Reflective Thinking REF: p. 36 LOC: Strategy PTS: 1 DIF: Moderate NAT: AACSB Reflective Thinking REF: p. 61 LOC: HRM

2. Only a minority of firms actually monitor statistics on effectiveness and productivity. ANS: T OBJ: 1 TOP: Conceptual PTS: 1 DIF: Moderate NAT: AACSB Reflective Thinking REF: p. 37 LOC: Strategy

3. Companies that follow HR best practices, such as paying high wages and providing employment security, tend to have higher market value than firms who do not follow these practices. ANS: T OBJ: 1 TOP: Conceptual PTS: 1 DIF: Moderate NAT: AACSB Reflective Thinking REF: p. 37 LOC: Strategy

4. An organizations culture can be a source of competitive advantage. ANS: T OBJ: 2 TOP: Conceptual PTS: 1 DIF: Easy NAT: AACSB Reflective Thinking REF: p. 39 LOC: Strategy

5. A pharmaceutical sales representatives unit labor costs could be calculated by the dollar value of his/her monthly sales orders less returns. ANS: F OBJ: 2 TOP: Application PTS: 1 DIF: Challenging NAT: AACSB Analytic REF: p. 40 LOC: Strategy

6. A company with high wages cannot be economically competitive. ANS: F OBJ: 2 TOP: Conceptual PTS: 1 DIF: Challenging NAT: AACSB Reflective Thinking REF: p. 40 LOC: Strategy

7. High turnover of employees does not affect productivity if the overall quality of the employees remains the same. ANS: F OBJ: 2 TOP: Conceptual PTS: 1 DIF: Moderate NAT: AACSB Reflective Thinking REF: p. 41 LOC: Strategy

8. The attention of U.S. businesses to customer service and quality in programs such as Total Quality Improvement has resulted in increased customer satisfaction with quality. ANS: F OBJ: 2 TOP: Conceptual PTS: 1 DIF: Easy NAT: AACSB Reflective Thinking REF: p. 41 LOC: Strategy

9. The HR departments cost of processing each applicant for non-exempt openings is a measure of effectiveness. ANS: F OBJ: 2 TOP: Application PTS: 1 DIF: Moderate NAT: AACSB Analytic REF: p. 42 LOC: Strategy

10. Efficiency compares inputs and costs to outputs and benefits. ANS: T OBJ: 2 TOP: Conceptual PTS: 1 DIF: Challenging NAT: AACSB Reflective Thinking REF: p. 42 LOC: Strategy

11. Legal restrictions prohibit European Union firms from moving production to less expensive countries. ANS: F OBJ: 3 TOP: Conceptual PTS: 1 DIF: Moderate NAT: AACSB Reflective Thinking REF: p. 44 LOC: Environmental Influence

12. U.S. companies can find employees in developing nations who are willing to work for significantly lower wages than U.S. employees. ANS: T OBJ: 1 TOP: Conceptual PTS: 1 DIF: Easy NAT: AACSB Reflective Thinking REF: p. 44-45 LOC: Environmental Influence

13. An expansion of a U.S. firm into a European Union nation would involve only minor alterations in HR activities. ANS: F OBJ: 3 TOP: Conceptual PTS: 1 DIF: Easy NAT: AACSB Reflective Thinking REF: p. 44 LOC: Environmental Influence

14. ModernMade Textiles has successfully used a piece-rate compensation plan in its U.S. plants for decades. The effect of compensation policies is similar from one culture to another, so this plan can be implemented in new plants ModernMade opens in other countries as long as it is adapted to the local currency and rates of pay. ANS: F OBJ: 2 TOP: Application PTS: 1 DIF: Moderate NAT: AACSB Analytic REF: p. 44 LOC: Environmental Influence

15. In most organizations that do HR planning, the majority of the responsibility for this planning is given to the top HR executives and subordinate staff specialists. ANS: T OBJ: 4 TOP: Conceptual PTS: 1 DIF: Easy NAT: AACSB Reflective Thinking REF: p. 45 LOC: HRM

16. An advantage of family-owned businesses is that succession planning is simple if the founder has children and/or grandchildren. ANS: F OBJ: 4 TOP: Conceptual PTS: 1 DIF: Easy NAT: AACSB Reflective Thinking REF: p. 46 LOC: HRM

17. The strongest evidence of successful HR planning in an organization is if the human resources have been consistently aligned with the needs of the business over a period of time. ANS: T OBJ: 4 TOP: Conceptual PTS: 1 DIF: Easy NAT: AACSB Reflective Thinking REF: p. 47 LOC: HRM

18. Judgmental techniques for forecasting the future need for human resources has been largely replaced by mathematical methods. ANS: F OBJ: 4 TOP: Conceptual PTS: 1 DIF: Moderate NAT: AACSB Reflective Thinking REF: p. 50-51 LOC: HRM

19. Because of the high degree of uncertainty in the environment, most HR planning experts recommend forecasting no more than three years into the future.

ANS: F OBJ: 4 TOP: Conceptual

PTS: 1 DIF: Moderate NAT: AACSB Reflective Thinking

REF: p. 51 LOC: HRM

20. The estimated internal labor supply for a particular department is calculated by subtracting projected outflows from the department from the current staffing level and adding the projected inflows to the department. ANS: T OBJ: 4 TOP: Definitional PTS: 1 DIF: Easy NAT: AACSB Reflective Thinking REF: p. 53 | Figure 2-8 LOC: HRM

21. The intention of the Worker Adjustment and Retraining Notification (WARN) Act is to give employees advance notice of an impending layoff. ANS: T OBJ: 5 TOP: Conceptual PTS: 1 DIF: Easy NAT: AACSB Reflective Thinking REF: p. 54 LOC: Legal Responsibilities

22. Downsizing reduces costs in the short term but does not generate additional revenue for the organization. ANS: T OBJ: 5 TOP: Conceptual PTS: 1 DIF: Moderate NAT: AACSB Reflective Thinking REF: p. 54 LOC: Strategy

23. An employer that lays off a long-term employee has no legal duty to provide severance pay. ANS: T OBJ: 5 TOP: Conceptual PTS: 1 DIF: Moderate NAT: AACSB Reflective Thinking REF: p. 55 LOC: Legal Responsibilities

24. A primary focus of mergers is cost savings through elimination of employees. ANS: T OBJ: 5 TOP: Conceptual PTS: 1 DIF: Moderate NAT: AACSB Reflective Thinking REF: p. 57 LOC: Strategy

25. The success of acquisitions is determined by the savings in labor costs and other financial efficiencies, not by psychological or soft factors. ANS: F OBJ: 5 TOP: Conceptual PTS: 1 DIF: Easy NAT: AACSB Reflective Thinking REF: p. 57 LOC: Strategy

26. Despite all the focus on metrics, one should always remember that the HR function cannot be objectively quantified. ANS: F OBJ: 6 TOP: Conceptual PTS: 1 DIF: Moderate NAT: AACSB Reflective Thinking REF: p. 58 LOC: HRM

27. Typically, HR metrics have been focused on internal HR expenditures and effectiveness.

ANS: T OBJ: 6 TOP: Conceptual

PTS: 1 DIF: Easy NAT: AACSB Reflective Thinking

REF: p. 58 LOC: HRM

28. To be useful, HR metrics must be tied to financial performance, such as revenues or expenditures. ANS: F OBJ: 6 TOP: Conceptual PTS: 1 DIF: Moderate NAT: AACSB Reflective Thinking REF: p. 58 LOC: HRM

29. Revenue minus expenses divided by the number of FTEs gives the income generated per FTE. ANS: T OBJ: 6 TOP: Conceptual PTS: 1 DIF: Moderate NAT: AACSB Reflective Thinking REF: p. 58-59 LOC: HRM

30. The balanced scorecard is especially attractive as a measure of HR effectiveness, because the use of the four perspectives eliminates subjectivity in the process. ANS: F OBJ: 6 TOP: Conceptual PTS: 1 DIF: Moderate NAT: AACSB Reflective Thinking REF: p. 61 LOC: Strategy

31. The cost per employee of HR staff declines as the size of the organizations workforce increases. ANS: T OBJ: 6 TOP: Conceptual PTS: 1 DIF: Moderate NAT: AACSB Reflective Thinking REF: p. 61 LOC: HRM

32. Abbeyville Dairy does not have a formal HR professional. The top executives wish to identify problems the company may have with legal compliance and record keeping. It would be advisable for Abbeyville Dairy to conduct an HR audit. ANS: T OBJ: 6 TOP: Conceptual ESSAY 1. Why is strategic HR management essential for organizational success? ANS: Strategic HR management is the use of employees to gain or keep a competitive advantage. An organization cannot be successful in the long term without effectively managing all of its resources, including its human resources. The HR strategy must support the organizations competitive strategy. In particular, the organizational strategy will determine the kind of people needed in the organization. Conversely, the kind of people in the organization can limit the strategies the organization can successfully undertake. The organizations HR strategy must provide the right people in the right place at the right time to implement the organizations competitive strategy. PTS: 1 DIF: Moderate NAT: AACSB Reflective Thinking REF: p. 36-38 LOC: Strategy OBJ: 1 TOP: Conceptual PTS: 1 DIF: Easy NAT: AACSB Analytic REF: p. 61-62 LOC: HRM

2. What is environmental scanning? Why is it important? What information does it convey to the HR manager? ANS: Environmental scanning is the process of studying the environment of the organization to pinpoint opportunities and threats. It is important in HR planning because the organization must compete with other employers for sufficient numbers of employees with appropriate capabilities. HR managers must understand the external environment, particularly government influences, economic conditions, geographic issues, competitive issues, and workforce changes. Government policies and regulations influence the supply of labor and also affect employment-related taxes. Economic factors such as interest rates, inflation and economic growth affect the availability of workers, especially by affecting the unemployment rate. Net migration of potential employees into and out of geographic regions affects the supply of labor for organizations. Both domestic and international competitors affect the availability of labor, as well as compensation and benefits. Finally, changes in the composition of the workforce and changes in work patterns affect the types of workers available to organizations. PTS: 1 DIF: Moderate NAT: AACSB Reflective Thinking TOP: Conceptual REF: p. 47-49 OBJ: 4 LOC: Environmental Influence

3. When a U.S. organization is planning to move beyond the import/export phase of international interaction, what are the main factors it must consider in order to be successful? ANS: As an organization becomes a multi-national enterprise, it will begin operations in other countries. Because it will employ foreign workers on foreign soil, the organization must change its U.S.-based HR practices to comply with the countrys laws, especially regarding compensation, staffing, training, health and safety, and labor relations. As the organization moves to become truly global, its employees will become mobile throughout the organizations worldwide operations. It is critical that HR managers in these organizations have a global mindset, so that they are open to other cultures and ideas. Factors that must be considered in global HR include legal, political, cultural and economic forces, because HR activities must be altered to fit appropriately in each country. This means that HR managers must be knowledgeable about each countrys employment laws and its political environment. They must understand the cultural characteristics of each country, including how each varies on Hofstedes five dimensions (inequality in power, individualism/group orientation, masculinity/femininity, structured/unstructured, and long-term/short-term orientation). The most pertinent economic factor for global HR is the level of wages in the country. PTS: 1 DIF: Moderate NAT: AACSB Reflective Thinking TOP: Conceptual REF: p. 42-44 OBJ: 3 LOC: Environmental Influence

4. What strategies are available to an organization with a human resource surplus? What are the advantages and disadvantages of each? ANS:

When there is a surplus of employees, the number of workers can be reduced a number of ways. The least distressing for employees is to use a combination of attrition and a hiring freeze to bring the workforce numbers down. This is practical only if there is a relatively small surplus of employees and if the reduction is not needed in the short term. Another less demoralizing method of reducing employee numbers is voluntary separation such as early retirement buyouts. These have up-front costs due to severance payments and benefits extensions, and some employees the company may wish to retain may opt to leave. Voluntary separations typically reduce the employers legal liabilities if care is taken that the separations are truly voluntary. WARN compliance is needed with voluntary separation programs. Outright layoffs are the most distressing to both the employees laid off and to those remaining. The WARN Act requires notice before a layoff or facility closing involving more than 50 people. Layoffs are effective during temporary downturns because employees can be called back if business improves. PTS: 1 DIF: Moderate NAT: AACSB Reflective Thinking REF: p. 53-55 LOC: HRM OBJ: 5 TOP: Conceptual

5. What are HR metrics and why are they important to organizations? Give examples of HR metrics. ANS: HR metrics are specific measures tied to HR performance indicators. A metric can be based on costs, quantity, quality, timeliness or other performance goals. HR metrics allow the organization to determine if HR activities are contributing to the organizations strategic effectiveness and the value it adds to the organization. HR activities can be measured by their return on investment (ROI) or their economic value added (EVA), which are both financial measures. The ROI of HR activities is a ratio of the financial benefits of an HR activity compared with the operating and implementation costs of the activity. The ROI will show how long it will take for an HR activity to pay for itself. The EVA approach determines if each HR activity generates more value for the firm than the firms cost of capital. The balanced scorecard looks at financial measures as well as internal business processes, the customers perspective, and the employees learning and growth perspective. Another approach to measuring HR effectiveness is the use of benchmarking, which compares specific measures of performance against data on these measures in other organizations. This allows HR managers to judge if they are operating within acceptable ranges compared with other organizations. PTS: 1 DIF: Moderate NAT: AACSB Reflective Thinking REF: p. 58-59 LOC: HRM OBJ: 6 TOP: Conceptual