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Chapter 1—Changing Nature of Human Resource Management

MULTIPLE CHOICE

1. Human resource management isa. supervising, monitoring, controlling, and disciplining employees in order to achieve

organizational goals.b. the designing of organizational systems to ensure that human talent is used effectively to

accomplish organizational goals.c. the use and coordination of human capital to ensure the profitability and survival of the

organization.d. the design of the organization and its systems in order to achieve the goals of the

organization.

ANS: B PTS: 1 DIF: Easy REF: p. 4OBJ: 1 NAT: AACSB Reflective Thinking LOC: HRMTOP: Definitional

2. HR metrics must be linked toa. statistical analyses.b. industry outcomes.c. business performance.d. employee satisfaction.

ANS: C PTS: 1 DIF: Easy REF: p. 4OBJ: 1 NAT: AACSB Reflective Thinking LOC: Creation of ValueTOP: Conceptual

3. All of the following are types of organizational assets EXCEPTa. social.b. human.c. financial.d. intangible.

ANS: A PTS: 1 DIF: Easy REF: p. 4OBJ: 1 NAT: AACSB Reflective Thinking LOC: Creation of ValueTOP: Conceptual

4. Which of the following statements is TRUE?a. Because of the higher quality of Western European education, the return on human capital

for European firms is higher than the return on human capital for U.S. firms.b. Companies that spend more than 60% of total operating costs on employee costs have

poor returns on investment in their human capital.c. U.S. firms spend nearly twice as much as European firms on employee salaries and

benefits, but U.S. firms experience higher levels of return on investment for their human capital.

d. Human capital is the collective value of capabilities, knowledge, skills, life experiences and motivation of an organizational workforce. Being intangible, it is difficult to measure the effect of human capital on shareholder value.

ANS: C PTS: 1 DIF: Moderate REF: p. 5OBJ: 1 NAT: AACSB Reflective Thinking LOC: Creation of ValueTOP: Conceptual

5. In a university, the assets that allow all the other assets of the school to be used to offer educational services to its students are the university’sa. financial endowment and income.b. physical plant such as libraries, laboratories and technological learning facilities.c. administrators, professors, and other employees.d. intangible assets such as its unique operating processes and specialized research

capabilities.

ANS: C PTS: 1 DIF: Moderate REF: p. 5OBJ: 1 NAT: AACSB Analytic LOC: Creation of ValueTOP: Application

6. The Chief Financial Officer of McGill Tubing wants to learn the contribution of McGill’s workforce toward creating value for shareholders. An analysis which would provide this information is the calculation ofa. the human capital revenue stream.b. marginal revenue generated per employee.c. return on human capital investment.d. profit per employee.

ANS: C PTS: 1 DIF: Challenging REF: p. 5OBJ: 1 NAT: AACSB Analytic LOC: Creation of ValueTOP: Application

7. Through ____ HR management provides the organization with a sufficient supply of qualified individuals to fill the jobs in the organization.a. staffingb. affirmative actionc. talent managementd. performance management

ANS: A PTS: 1 DIF: Easy REF: p. 5OBJ: 2 NAT: AACSB Reflective Thinking LOC: HRMTOP: Definitional

8. Tyrone Toys is intensely focused on reducing labor costs. During the executive committee’s discussion of closing its unionized plant in Ohio and opening a non-union plant in Mississippi, the executive vice president of HR suggests that the committee get legal advice in case Tyrone Toys would be subject to lawsuits by the union. This interaction suggests thata. HR is not a strategic partner in this firm because the EVP of HR is reacting to another

committee member’s suggestion, not proactively making his own suggestion.b. HR is not a strategic partner in the firm because any suggestion about closing a plant

should properly come from HR, not another executive.c. HR is a strategic partner in the firm because in this firm the EVP of HR is allowed to sit in

on important strategic meetings.d. HR is a strategic partner in the firm because the EVP of HR a permanent member of the

executive committee.

ANS: D PTS: 1 DIF: Challenging REF: p. 6OBJ: 3 NAT: AACSB Analytic LOC: StrategyTOP: Application

9. Henry, the production manager for a chemical plant, resents what he feels are unwarranted intrusions into his territory by HR managers. Henry feels that his relationships with his employees are strong and supportive, and that HR initiatives generally cause unnecessary trouble and complications.

a. Henry is correct, because the HR function is a support and staff function and should not intrude on day-to-day management functions.

b. HR managers have the sole responsibility for the proper implementation of company policy regarding employees. Henry is subverting this process.

c. Henry is probably committing major violations of company policy and wants to keep this secret from HR management.

d. Henry would be surprised to learn that every manager, including him, is an HR manager.

ANS: D PTS: 1 DIF: Moderate REF: p. 6OBJ: 2 NAT: AACSB Reflective Thinking LOC: HRMTOP: Application

10. When the human resources function creates a unique capability in a firm that creates high value and differentiates the organization from its competition, human resources is a/an ____ for the firm.a. tangible assetb. core competencyc. critical capabilityd. capital contributor

ANS: B PTS: 1 DIF: Moderate REF: p. 6OBJ: 1 NAT: AACSB Reflective Thinking LOC: StrategyTOP: Definitional

11. As the top HR manager of a medium-sized hospitality business in New Orleans that is heavily dependent on U.S. and international tourism, you are deeply involved in rebuilding the company’s strength in the Hurricane Katrina recovery. You need to monitor all of the following factors EXCEPTa. the employee and labor relations factor of whether unions are targeting hospitality workers

for organization.b. the global factor of the value of the yen and the euro in relation to the dollar.c. the legal factor of the enforcement of the Foreign Corrupt Practices Act.d. the environmental factor of the effect of global warming on hurricane patterns.

ANS: C PTS: 1 DIF: Challenging REF: p. 7 | Figure 1-1OBJ: 1 NAT: AACSB Analytic LOC: HRMTOP: Application

12. ____ identifies paths and activities for individual employees as they develop within the organization.a. Staffingb. HR developmentc. Performance managementd. Career planning

ANS: D PTS: 1 DIF: Easy REF: p. 7OBJ: 2 NAT: AACSB Reflective Thinking LOC: HRMTOP: Definitional

13. Talent management includes which of the following activities?a. job-skill trainingb. wage and salary administrationc. diversity assessment and analysisd. environmental scanning


14. Compensation and benefits managers in almost all organizations face a major and growing concern regarding the cost ofa. equalization of pay between men and women.b. incentive pay.c. benefits.d. outsourcing.

ANS: C PTS: 1 DIF: Easy REF: p. 7OBJ: 2 NAT: AACSB Reflective Thinking LOC: HRMTOP: Conceptual

15. Most new jobs in the U.S. economy are created bya. small private sector businesses.b. federal government agencies and the military.c. large private sector firms in service industries, particularly health care and technology.d. traditional, large heavy manufacturing companies.

ANS: A PTS: 1 DIF: Easy REF: p. 8OBJ: 2 NAT: AACSB Reflective Thinking LOC: Environmental InfluenceTOP: Conceptual

16. The collective value of the capabilities, knowledge, skills, life experiences and motivation of an organized workforce is calleda. the organization’s talent inventory.b. total human resources.c. human capital.d. the organization’s intellectual assets.

ANS: C PTS: 1 DIF: Moderate REF: p. 8OBJ: 1 NAT: AACSB Reflective Thinking LOC: HRMTOP: Definitional

17. Which of the following is NOT a major HR concern of small businesses?a. potential unionization effortsb. shortages of qualified workersc. compliance with government regulationsd. increasing benefits costs

ANS: A PTS: 1 DIF: Moderate REF: p. 8OBJ: 2 NAT: AACSB Reflective Thinking LOC: HRMTOP: Conceptual

18. The reason that cooperation between operating managers and HR staff is necessary for HR efforts to succeed is thata. HR professionals see the “coarse-grained picture” of organizational strategy while

operating managers see the “fine-grained picture” of daily production.b. HR designs processes that the operating managers must help implement.c. HR professionals must implement processes that have been designed by top management

and that impact operating managers.d. HR professionals must react swiftly to initiatives created by operating managers.

ANS: B PTS: 1 DIF: Moderate REF: p. 9OBJ: 2 NAT: AACSB Reflective Thinking LOC: Operations ManagementTOP: Conceptual

19. Matt has recently joined his family’s wholesale landscape nursery business as vice president of operations. The firm employs 25 full time employees, plus about 20 seasonal employees. In the past, Matt’s father personally handled all HR issues. Matt plans to bring the company in line with typical HR staffing levels. Matt willa. hire a full-time HR manager and a payroll clerk.b. add a clerical employee to help with HR tasks.c. outsource the HR function.d. hire a full-time HR professional.

ANS: B PTS: 1 DIF: Moderate REF: p. 9OBJ: 2 NAT: AACSB Analytic LOC: HRMTOP: Application

20. Woodmere Production Company employees over 2,000 hourly workers. The HR department is debating the introduction of web-based technology to handle employment applications, employee benefit enrollments and other related functions. The move to this technology will most affect the HR department’s ____ role.a. strategicb. operationalc. administratived. employee advocate

ANS: C PTS: 1 DIF: Easy REF: p. 10-11OBJ: 3 NAT: AACSB Analytic LOC: HRMTOP: Application

21. Charlotte is describing her new HR position to a friend. She says that she handles most of the clerical duties involved in running the HR department, including such tasks as maintaining employee files and submitting governmental reports. Charlotte’s job would fall into the ____ HR role.a. strategicb. operational and employee advocatec. administratived. secretarial

ANS: C PTS: 1 DIF: Easy REF: p. 10-11OBJ: 3 NAT: AACSB Reflective Thinking LOC: HRMTOP: Application

22. The ____ role of HR management has been declining in emphasis, whereas the ____ has/have been increasing in importance.a. strategic, operational and advocateb. advocate, operational and administrativec. operational, administrative and advocated. administrative, strategic

ANS: D PTS: 1 DIF: Moderate REF: p. 10-11 | Figure 1-3OBJ: 3 NAT: AACSB Reflective Thinking LOC: HRMTOP: Conceptual

23. Considering the trends in HR, current HR departments compared to departments of fifteen years agoa. would tend to have larger staffs.b. would have more clerks than professional staff.c. would be less likely to be strategic partners with top management.d. would be more tightly linked with vendors of HR specialty services.

ANS: D PTS: 1 DIF: Moderate REF: p. 11OBJ: 3 NAT: AACSB Reflective Thinking LOC: Information TechnologiesTOP: Conceptual

24. As the vice-president of HR for Woodmere Production, Inc., you are presenting a proposal to Woodmere’s top management for outsourcing many of your department’s administrative HR functions to vendors. You argue that HR vendors have greater expertise than your in-house staff and that outsourcing will allow you to spend more time on the strategic aspects of HR. But, your key selling-point to top management will bea. the reduction in labor costs in the HR department.b. the prestige of retaining a world-class vendor.c. the ability to have closer contact with HR’s clients, the employeesd. improvement in morale of HR staff.

ANS: A PTS: 1 DIF: Moderate REF: p. 11-12OBJ: 3 NAT: AACSB Analytic LOC: Creation of ValueTOP: Application

25. Recruiting and selecting employees for current openings are typical ____ HR activities.a. employee advocacyb. operationalc. strategicd. administrative

ANS: B PTS: 1 DIF: Moderate REF: p. 12OBJ: 3 NAT: AACSB Reflective Thinking LOC: HRMTOP: Conceptual

26. Which of the following HR activities is MOST likely to be outsourced successfully?a. 401k administrationb. risk managementc. labor negotiationsd. performance management

ANS: A PTS: 1 DIF: Moderate REF: p. 12OBJ: 3 NAT: AACSB Reflective Thinking LOC: HRMTOP: Conceptual

27. Ensuring fair and equitable treatment for employees regardless of their personal background or circumstances is associated with the ____ role of HR.a. strategicb. operationalc. employee advocated. administrative

ANS: C PTS: 1 DIF: Easy REF: p. 12OBJ: 3 NAT: AACSB Reflective Thinking LOC: HRMTOP: Definitional

28. Which of the following would NOT be identified as a typical HR operational activity?a. government complianceb. safety programsc. compensationd. partnering with top executives

ANS: D PTS: 1 DIF: Moderate REF: p. 12OBJ: 3 NAT: AACSB Reflective Thinking LOC: HRMTOP: Conceptual

29. The HR management role that is most influential in reducing the number of employee lawsuits against the company is the ____ role.a. strategicb. advocatec. operationald. administrative


30. You are the recruiter for an ophthalmologic products company. Your firm needs a scientist with a highly-specialized background. You have been unable to lure any scientist with the needed qualifications to your firm, even though you have offered a very high salary. After intensive searching, you have found a Peruvian scientist with impeccable credentials who is interested in moving back to the U.S. Which problem are you most likely to encounter?a. The inability of the scientist to adapt to the U.S. work culture.b. Tight immigration quotas for high skilled workers.c. Your current scientific employees fearing that their work will be outsourced overseas.d. The difficulty in meeting the salary expectations of the Peruvian scientist.

ANS: B PTS: 1 DIF: Moderate REF: p. 14OBJ: 4 NAT: AACSB Analytic LOC: Environmental InfluenceTOP: Application

31. Top executives of an organization truly view the top HR executive as contributing to the strategic success of the firm when they request the HR manager toa. streamline the employee selection process.b. improve the implementation of performance appraisals for supervisors.c. evaluate potential merger candidates for organizational compatibility.d. select a vendor for outsourcing benefits administration.

ANS: C PTS: 1 DIF: Challenging REF: p. 14OBJ: 3 NAT: AACSB Reflective Thinking LOC: StrategyTOP: Conceptual

32. The roles played by HR management in the firm are being affected by all of the following EXCEPTa. challenges of managing a more highly-educated workforce.b. globalization of business.c. cost reduction pressures.d. organizational restructuring.

ANS: A PTS: 1 DIF: Moderate REF: p. 14OBJ: 4 NAT: AACSB Reflective Thinking LOC: Environmental InfluenceTOP: Conceptual

33. A key difference between operational HR management and strategic HR management is that operational HR management is ____ and strategic HR management is ____.a. planning-oriented, implementation-orientedb. proactive, reactivec. profit-focused, cost-focused

d. employee-focused, organization-focused

ANS: D PTS: 1 DIF: Moderate REF: p. 15 | Figure 1-4OBJ: 3 NAT: AACSB Reflective Thinking LOC: HRMTOP: Conceptual

34. A rumor has been circulating at the largest law firm in the city that the partners are considering outsourcing much of the work of the paralegals in the firm to a company in India. If you were a paralegal at this firm, what would be your most appropriate attitude or action?a. Relax. Work of this level of professionalism cannot be outsourced to a foreign firm.b. Relax. Work that requires intimate knowledge of the U.S. legal system cannot be

outsourced.c. Consider your options. Only occupations that are dying are considered for outsourcing.d. Consider your options. The firm can generate huge labor cost savings by outsourcing your

job.

ANS: D PTS: 1 DIF: Moderate REF: p. 15OBJ: 4 NAT: AACSB Analytic LOC: Environmental InfluenceTOP: Application

35. Eclipse Executive Services offers ransom insurance policies for companies up to $10 million per kidnapping. This is an example of a business opportunity generated by which one of the following HR management challenges?a. ethical challengesb. economic and technological changesc. workforce demographics and diversityd. globalization of business

ANS: D PTS: 1 DIF: Moderate REF: p. 15OBJ: 4 NAT: AACSB Analytic LOC: Environmental InfluenceTOP: Application

36. A large Japanese semiconductor manufacturer is building a manufacturing plant in central Texas. This will increase the number of jobs in this central Texas area and make it more difficult for local firms to fill open positions. This is an example ofa. in-shoring.b. occupational shifting.c. outsourcing.d. repatriation of jobs.

ANS: A PTS: 1 DIF: Easy REF: p. 15OBJ: 4 NAT: AACSB Analytic LOC: Environmental InfluenceTOP: Application

37. The U.S. economy can be characterized as a/an ____ economy.a. serviceb. manufacturingc. industriald. knowledge-based

ANS: A PTS: 1 DIF: Easy REF: p. 16OBJ: 4 NAT: AACSB Reflective Thinking LOC: Environmental InfluenceTOP: Conceptual

38. Between now and 2010 the largest number of new jobs in the U.S. will be in

a. healthcare.b. food-service.c. professional occupations.d. information technology.

ANS: B PTS: 1 DIF: Moderate REF: p. 16 | Figure 1-5OBJ: 4 NAT: AACSB Reflective Thinking LOC: Environmental InfluenceTOP: Conceptual

39. Other than information technology occupations, between now and 2010 most of the fastest-growing occupations will be ina. manufacturing.b. the public sector.c. human resources.d. health care.

ANS: D PTS: 1 DIF: Moderate REF: p. 16 | Figure 1-5OBJ: 4 NAT: AACSB Reflective Thinking LOC: Environmental InfluenceTOP: Conceptual

40. Which of the following is TRUE about the U.S. educational system?a. U.S. schools are graduating more engineers than can be used in the economy.b. U.S. students outperform students in other, directly-competitive nations in math and

science.c. Wages are low in the U.S. manufacturing sector because of the excess number of people

with manufacturing skills seeking jobs.d. U.S. workers are inadequately educated.

ANS: D PTS: 1 DIF: Moderate REF: p. 16OBJ: 4 NAT: AACSB Reflective Thinking LOC: Environmental InfluenceTOP: Conceptual

41. A major trend regarding diversity is thata. more people classify themselves as multi-racial.b. out of political and philosophical convictions many people refuse to classify themselves as

any racial or ethnic group.c. because of the melting pot effect, there is less cultural and ethnic diversity in the U.S. as

time passes.d. since the baby boomers are moving out of the workforce, the issue of aging workers will

be a non-issue in 10 years.

ANS: A PTS: 1 DIF: Moderate REF: p. 17OBJ: 4 NAT: AACSB Diversity LOC: Environmental InfluenceTOP: Conceptual

42. Temporary workers, independent contractors, part-timers and leased employees are collectively referred to asa. full-time-equivalent employees.b. virtual employees.c. contingent workers.d. extra-organizational employees.

ANS: C PTS: 1 DIF: Easy REF: p. 17OBJ: 4 NAT: AACSB Reflective Thinking LOC: Environmental InfluenceTOP: Definitional

43. Which of the following is NOT a major reason why businesses use contingent workers?a. to potentially avoid legal liability for workersb. to stabilize the core workforcec. to reduce compensation and benefit costsd. to accommodate employee desire for flexible work schedules.

ANS: D PTS: 1 DIF: Challenging REF: p. 17OBJ: 4 NAT: AACSB Reflective Thinking LOC: Environmental InfluenceTOP: Conceptual

44. The improvement in communication technology has resulted ina. increasing the number of hours worked per employee.b. reduction of stress for workers.c. better work-life balance for employees in professional occupations.d. enabling management of virtual employees.

ANS: A PTS: 1 DIF: Moderate REF: p. 17OBJ: 4 NAT: AACSB Reflective Thinking LOC: Environmental InfluenceTOP: Conceptual

45. Which of the following statements is TRUE?a. Despite the many layoffs occurring in the last decade, the average age of the workforce is

older.b. Because of the many early retirement programs instituted in the last decade, the average

age of the workforce is younger.c. Variation of ages in the workplace is not considered “diversity” in the same sense that

variation by race and gender is considered “diversity.”d. As the workforce ages, the need for diversity training is decreasing due to the

psychological maturity of the older workforce.

ANS: A PTS: 1 DIF: Challenging REF: p. 18-19OBJ: 4 NAT: AACSB Reflective Thinking LOC: Environmental InfluenceTOP: Conceptual

46. Flexible hours, job-sharing, child-care referral services, and flexible leave programs are all examples ofa. executive perks.b. retention programs based on work/family concerns.c. anti-unionization programs.d. programs mandated by the Equal Employment Opportunity Act.


47. Claude is the HR manager for a pharmaceuticals firm. One of his top salespersons, Agatha, has twin boys under age 2. Despite the fact that Agatha has a full-time nanny, it is obvious that she is overwhelmed by the demands of her work and her personal life. Claude’s main concern in this case is probablya. how to persuade Agatha to resign without violating the Pregnancy Discrimination Act.b. getting Agatha to refocus on her career through motivational training.c. retaining Agatha as an employee.d. whether Agatha will file an FMLA lawsuit.

ANS: C PTS: 1 DIF: Moderate REF: p. 18OBJ: 4 NAT: AACSB Analytic LOC: HRMTOP: Application

48. Wal-Mart’s single-minded focus on lowest prices has had the all the following HR ramifications EXCEPTa. Wal-Mart’s competitors have had to follow the “cost-less” strategy.b. Wal-Mart competitors have moved to using virtual employees.c. Wal-Mart vendors have had to outsource their manufacturing processes to overseas

companies.d. Wal-Mart vendors have had to cut jobs and close factories.

ANS: B PTS: 1 DIF: Moderate REF: p. 19OBJ: 4 NAT: AACSB Reflective Thinking LOC: StrategyTOP: Application

49. Which of the following activities is NOT usually associated with organizational "rightsizing"?a. outplacing workersb. closing facilitiesc. merging with other organizationsd. decreasing the span of supervision

ANS: D PTS: 1 DIF: Easy REF: p. 19OBJ: 4 NAT: AACSB Reflective Thinking LOC: HRMTOP: Conceptual

50. The main pressure behind restructuring, rightsizing, and mergers and acquisitions has beena. intense domestic competition.b. obsolescence of plant and equipment in the U.S. manufacturing sector.c. the drive to reduce costs.d. the need for U.S. firms to increase in size to compete with international cartels.

ANS: C PTS: 1 DIF: Moderate REF: p. 19OBJ: 4 NAT: AACSB Reflective Thinking LOC: Environmental InfluenceTOP: Conceptual

51. As HR manager of a mid-sized auto parts manufacturing plant, your CEO has asked you to predict the impact on the employees of a 20 percent layoff of hourly workers. You write the CEO a memo including all of the following predictions EXCEPTa. potential loss of employee loyalty.b. increased turnover of layoff survivors.c. increased workload on survivors.d. productivity surge by survivors.

ANS: D PTS: 1 DIF: Moderate REF: p. 19OBJ: 2 NAT: AACSB Analytic LOC: Individual DynamicsTOP: Application

52. An integrated system providing information used in HR decision making is a/ana. human resource administrative systemb. human resource operational systemc. human resource information systemd. human resource management system.

ANS: D PTS: 1 DIF: Easy REF: p. 19-20

OBJ: 5 NAT: AACSB Technology LOC: Information TechnologiesTOP: Definitional

53. Which of the following HR management practices has NOT become web-based?a. benefits enrollmentb. internal job postingc. employee trainingd. performance improvement counseling

ANS: D PTS: 1 DIF: Easy REF: p. 20OBJ: 5 NAT: AACSB Technology LOC: Information TechnologiesTOP: Conceptual

54. In addition to administrative efficiency, the major reason for compiling data in HR management systems is toa. facilitate information-based HR decision making.b. develop complete records about each employee.c. strengthen the organization’s HRMS in comparison to its competitors’ HRMS functions.d. allow HR departments to retain the HRMS function in-house rather than outsourcing it to

vendors.

ANS: A PTS: 1 DIF: Easy REF: p. 20OBJ: 5 NAT: AACSB Technology LOC: Information TechnologiesTOP: Conceptual

55. Eric belongs to an informal group of HR compensation executives from various industries who share information and programs through a wiki. Eric and his colleagues are engaging ina. collusion.b. competition.c. collaboration.d. cronyism.

ANS: C PTS: 1 DIF: Easy REF: p. 20OBJ: 5 NAT: AACSB Analytic LOC: Information TechnologiesTOP: Application

56. When HR professionals from different organizations work together to solve shared business problems they are engaging ina. collusive HR.b. collaborative HR.c. operational HR.d. professional HR.

ANS: B PTS: 1 DIF: Easy REF: p. 20OBJ: 5 NAT: AACSB Reflective Thinking LOC: Group DynamicsTOP: Definitional

57. An organization’s initial use of an HRMS can be characterized as making HR ____ functions more efficient.a. legalb. strategicc. administratived. advocacy

ANS: C PTS: 1 DIF: Challenging REF: p. 20

OBJ: 5 NAT: AACSB Technology LOC: Information TechnologiesTOP: Conceptual

58. Ernest, the vice president of HR for the Legendary motel chain, has been on the HR side of the hotel/motel industry for over 30 years. Ernest has become a prized partner with the top executives of the Legendary corporation, and his advice is valued by the executives. Ernest prides himself on making decisions based on his “gut” and his intuition honed over his career. Which of the following statements is most likely to be TRUE?a. Ernest will be easily impressed and influenced by strategic arguments based on analysis of

extensive HR data.b. Legendary’s top executives will press Ernest to support his intuitive arguments with hard

data.c. Ernest would appreciate the efficiency aspect of HRMS more than the effectiveness aspect

of HRMS.d. Legendary possesses a “state-of-the-art” HRMS system.

ANS: C PTS: 1 DIF: Challenging REF: p. 20OBJ: 5 NAT: AACSB Analytic LOC: Information TechnologiesTOP: Application

59. When allowing employee self-service options whereby employees can enter the organization’s HR database and change their personnel records, enroll in benefit plans, and apply for posted jobs, a critical concern isa. training non-computer literate employees to use the system.b. monitoring excessive employee use of the system.c. overcoming internal HR management resistance to technology.d. maintaining security of the system.

ANS: D PTS: 1 DIF: Moderate REF: p. 21OBJ: 5 NAT: AACSB Technology LOC: Information TechnologiesTOP: Conceptual

60. From an HR perspective, a compelling reason for an organization to maintain high ethical standards isa. the reputation of the organization’s HR department in the profession.b. the ability to attract and retain employees.c. higher salaries for HR managers.d. the ability to succeed in bids for governmental contracts.

ANS: B PTS: 1 DIF: Moderate REF: p. 21OBJ: 6 NAT: AACSB Ethics LOC: Ethical ResponsibilitiesTOP: Conceptual

61. In plain language an “expediting charge” is reallya. a legal gift.b. a bribe.c. a courtesy.d. a benefit.

ANS: B PTS: 1 DIF: Easy REF: p. 22OBJ: 6 NAT: AACSB Ethics LOC: Ethical ResponsibilitiesTOP: Definitional

62. The Foreign Corrupt Practices Act (FCPA) prohibitsa. U.S. firms from engaging in corrupt practices in foreign countries.b. foreign firms from engaging in corrupt practices in the U.S.

c. U.S. firms from doing business with foreign firms which engage in corrupt practices.d. U.S. firms from engaging in practices which are corrupt under the laws of the countries in

which they are operating.

ANS: A PTS: 1 DIF: Moderate REF: p. 22OBJ: 6 NAT: AACSB Ethics LOC: Legal ResponsibilitiesTOP: Definitional

63. A not-for-profit scientific organization wishes to build a fisheries research station in a remote part of a developing nation. In order to receive a construction permit from the local government, the scientific organization had to agree to build an elementary school, a medical clinic, free housing for all workers and to provide SUVs for the use of local officials. This isa. a clear example of a violation of the Foreign Corrupt Practices Act.b. an example of an ethical dilemma in deciding whether this action would be bribery or a

benevolent act by the U.S. organization.c. an instance of the corrupting influence of U.S. organizations on developing countries.d. an acceptable practice because it is legal in this nation, even though it is not legal in the

U.S.

ANS: B PTS: 1 DIF: Challenging REF: p. 22OBJ: 6 NAT: AACSB Analytic LOC: Ethical ResponsibilitiesTOP: Application

64. All of the following are aspects of UPS’s corporate integrity program EXCEPTa. a zero-tolerance policy regarding ethical lapses.b. a detailed code-of-conduct manual.c. annual ethics training.d. a hotline for confidential calls on ethical problems.

ANS: A PTS: 1 DIF: Moderate REF: p. 23OBJ: 6 NAT: AACSB Ethics LOC: Ethical ResponsibilitiesTOP: Application

65. Which of the following statements is TRUE?a. The HR function in the organization is largely insulated from unethical behaviors.b. The HR department is largely responsible for the unethical behaviors of employees in the

organization.c. HR management is the voice of organizational ethics.d. HR management must focus on clearly illegal behaviors within the firm and leave ethics

up to the conscience of each individual manager.

ANS: C PTS: 1 DIF: Easy REF: p. 23OBJ: 6 NAT: AACSB Ethics LOC: Ethical ResponsibilitiesTOP: Conceptual

66. As Director of HR, you are designing an ethics program for your organization. You plan to develop a written code of ethics, training for all organizational members, and means for organizational members to obtain advice on ethical situations. What critical element is missing from your plan?a. systems for confidential reporting of misconduct.b. a discipline system for offenders against the code of ethics.c. means for employees to blow the whistle on organizational wrongdoing to governmental

agencies.d. ensuring that the organization’s code of ethics is not more restrictive than the relevant

laws.

ANS: A PTS: 1 DIF: Challenging REF: p. 23OBJ: 6 NAT: AACSB Analytic LOC: Ethical ResponsibilitiesTOP: Application

67. In organizations, in order to decide whether certain behavior is ethical or not, a person must answer all the following questions EXCEPTa. Does this behavior conform to mainstream political standards?b. Does this behavior meet all applicable laws, regulations, and government codes?c. Does this behavior meet organizational standards?d. Does this behavior meet professional standards?

ANS: A PTS: 1 DIF: Easy REF: p. 24OBJ: 6 NAT: AACSB Ethics LOC: Ethical ResponsibilitiesTOP: Conceptual

68. Ethics deals witha. what ought to be done.b. what is required by law.c. religious values.d. standard practices and procedures.

ANS: A PTS: 1 DIF: Easy REF: p. 24OBJ: 6 NAT: AACSB Ethics LOC: Ethical ResponsibilitiesTOP: Definitional

69. Whether employees and managers of an organization behave ethically is fundamentally a function ofa. professional codes of ethics.b. the relevant laws and legal guidelines applying to the organization and its industry.c. whether the organization has a code of ethics.d. the organization’s culture.

ANS: D PTS: 1 DIF: Moderate REF: p. 24OBJ: 6 NAT: AACSB Ethics LOC: Ethical ResponsibilitiesTOP: Conceptual

70. The Sarbanes-Oxley Act has had all of the following effects on HR EXCEPTa. HR vendors must prove that they are in compliance with the act.b. HR has had to staff the compliance verification effort involved with the act.c. HR has to check time, attendance, and payroll more closely.d. HR exempt-level professionals must have professional certification.

ANS: D PTS: 1 DIF: Easy REF: p. 25OBJ: 6 NAT: AACSB Ethics LOC: Legal ResponsibilitiesTOP: Conceptual

71. The position of vice-president of HR is open in a large paper-products manufacturing company. Two individuals are being considered, both from the internal HR function at the firm. The selection committee wants the new vice-president to be a strategic contributor to the firm. All of the following competencies are highly desirable EXCEPTa. that the candidate understands the paper-products business in all aspects.b. that the candidate be a highly detail-oriented person.c. that the candidate have personal and professional credibility.d. that the candidate understand the long-term implications of HR issues.

ANS: B PTS: 1 DIF: Moderate REF: p. 25

OBJ: 7 NAT: AACSB Reflective Thinking LOC: StrategyTOP: Application

72. Pauline is an employee of a large city. She is the lead negotiator for contracts between the city government and the police and firefighters’ unions. Pauline is an HRa. specialist.b. technologist.c. generalist.d. interventionist.

ANS: A PTS: 1 DIF: Easy REF: p. 26OBJ: 7 NAT: AACSB Analytic LOC: HRMTOP: Application

73. The most common area for HR specialization isa. EEO compliance.b. labor/management relations.c. benefits.d. HR information systems.

ANS: C PTS: 1 DIF: Easy REF: p. 26 | Figure 1-8OBJ: 7 NAT: AACSB Reflective Thinking LOC: HRMTOP: Conceptual

74. The largest professional organization for HR generalists isa. the International Personnel Management Association (IPMA).b. the American Society for Training and Development (ASTD).c. the Human Resource Certification Institute (HRCI).d. the Society for Human Resource Management (SHRM).

ANS: D PTS: 1 DIF: Easy REF: p. 27OBJ: 7 NAT: AACSB Reflective Thinking LOC: HRMTOP: Definitional

75. Emil is the assistant HR manager at a commercial construction company. Emil handles almost every aspect of human resources at the company, from employee questions about benefits to holding exit interviews. Emil is an HRa. generalist.b. specialist.c. technologist.d. unit manager.

ANS: A PTS: 1 DIF: Easy REF: p. 27OBJ: 7 NAT: AACSB Analytic LOC: HRMTOP: Application

76. The ____ sponsors the most well-known certification program for HR generalists.a. Human Resource Certification Instituteb. International Personnel Management Associationc. World at Work Associationd. American Society for Training and Development


77. You are the director of HR for a medium-sized firm. You are looking to hire a benefits specialist. You would prefer the individual to be certified in this field. Consequently, you will check applicant resumés for these initialsa. OHST.b. CEBSc. CPT.d. GPHR.

ANS: B PTS: 1 DIF: Easy REF: p. 28OBJ: 7 NAT: AACSB Analytic LOC: HRMTOP: Application

78. HR professionals value their professional certification becausea. certification is required in order to hold an exempt-level position in HR.b. PHR and SPHR certified professionals command higher pay.c. of the credibility certification gives them with peers and senior managers.d. certification is viewed as the equivalent of a master’s degree in HR.

ANS: C PTS: 1 DIF: Moderate REF: p. 28OBJ: 7 NAT: AACSB Reflective Thinking LOC: HRMTOP: Conceptual

TRUE/FALSE

1. Few firms bother to calculate the return they receive on human capital investments.

ANS: T PTS: 1 DIF: Easy REF: p. 5OBJ: 1 NAT: AACSB Reflective Thinking LOC: Creation of ValueTOP: Conceptual

2. Effective use of a firm’s human capital may explain significant amounts of the difference in market value between one company and another.

ANS: T PTS: 1 DIF: Moderate REF: p. 5OBJ: 1 NAT: AACSB Reflective Thinking LOC: Creation of ValueTOP: Conceptual

3. Intellectual capital is the thinking, knowledge, creativity, and decision-making that people in organizations contribute.

ANS: T PTS: 1 DIF: Easy REF: p. 5OBJ: 1 NAT: AACSB Reflective Thinking LOC: Creation of ValueTOP: Definitional

4. The value of human capital is intangible and its contribution to the organization is not measurable, even though it is of critical importance to the organization’s success.

ANS: F PTS: 1 DIF: Moderate REF: p. 5OBJ: 1 NAT: AACSB Reflective Thinking LOC: Creation of ValueTOP: Conceptual

5. HR management is exclusively concerned with activities and forces within the firm.

ANS: F PTS: 1 DIF: Easy REF: p. 6OBJ: 2 NAT: AACSB Reflective Thinking LOC: HRMTOP: Conceptual

6. Human resource management is a technical discipline requiring specialized skills. Accordingly, all HR activities should be carried out by HR professionals.

ANS: F PTS: 1 DIF: Moderate REF: p. 8OBJ: 2 NAT: AACSB Reflective Thinking LOC: HRMTOP: Conceptual

7. From a legal standpoint, it is critical that line managers not undertake HR management activities.

ANS: F PTS: 1 DIF: Moderate REF: p. 8OBJ: 2 NAT: AACSB Reflective Thinking LOC: HRMTOP: Conceptual

8. Most HR outsourcing is related to the administrative role of HR.

ANS: T PTS: 1 DIF: Moderate REF: p. 11OBJ: 3 NAT: AACSB Reflective Thinking LOC: HRMTOP: Conceptual

9. The top management team of an international chemical company is considering outsourcing some of its HR functions. As a member of the HR staff who has been involved with top management in strategic discussions about an upcoming acquisition, you ought to be updating your resumé because you will probably be terminated.

ANS: F PTS: 1 DIF: Moderate REF: p. 12OBJ: 3 NAT: AACSB Analytic LOC: StrategyTOP: Application

10. Typical operational HR functions include legal compliance, processing applications, training supervisors, and administering wages and salaries.

ANS: T PTS: 1 DIF: Easy REF: p. 18OBJ: 3 NAT: AACSB Reflective Thinking LOC: HRMTOP: Conceptual

11. Operational HR is essentially reactive while strategic HR is essentially proactive.

ANS: T PTS: 1 DIF: Moderate REF: p. 13 | Figure 1-4OBJ: 3 NAT: AACSB Reflective Thinking LOC: HRMTOP: Conceptual

12. When EconoPharm acquired a competing chain of discount drug stores, the vice president of HR was brought in after the decision to acquire was made, in order to make plans for workforce changes. This is an example of HR as a strategic partner.

ANS: F PTS: 1 DIF: Challenging REF: p. 14OBJ: 3 NAT: AACSB Analytic LOC: StrategyTOP: Application

13. An HR professional who seeks to work in international business must look for a job in a very large firm.

ANS: F PTS: 1 DIF: Easy REF: p. 15OBJ: 4 NAT: AACSB Reflective Thinking LOC: Environmental InfluenceTOP: Conceptual

14. The fastest-growing occupations are related to information technology and health care, but the most job growth in terms of total number of jobs is in lower-skilled service fields.

ANS: T PTS: 1 DIF: Moderate REF: p. 16OBJ: 4 NAT: AACSB Reflective Thinking LOC: Environmental InfluenceTOP: Conceptual

15. If the U.S. educational system does not improve, U.S. employers will be forced to expand international outsourcing of jobs.

ANS: T PTS: 1 DIF: Moderate REF: p. 16OBJ: 4 NAT: AACSB Reflective Thinking LOC: Environmental InfluenceTOP: Conceptual

16. Contingent workers have less legal protection regarding selection, discrimination, benefits, discipline and termination than do regular employees.

ANS: T PTS: 1 DIF: Challenging REF: p. 17OBJ: 4 NAT: AACSB Reflective Thinking LOC: Legal ResponsibilitiesTOP: Conceptual

17. Clark employs eleven international sales representatives who communicate with him entirely by telephone and email. Clark is correct in calling them “my virtual employees.”

ANS: T PTS: 1 DIF: Moderate REF: p. 17OBJ: 4 NAT: AACSB Technology LOC: Information TechnologiesTOP: Application

18. African-Americans make up the largest proportion of minorities in the overall U.S. workforce.

ANS: F PTS: 1 DIF: Easy REF: p. 17OBJ: 4 NAT: AACSB Reflective Thinking LOC: Environmental InfluenceTOP: Conceptual

19. Employee problems with balancing work and family have resulted in growing retention problems for firms.

ANS: T PTS: 1 DIF: Easy REF: p. 18OBJ: 4 NAT: AACSB Reflective Thinking LOC: Environmental InfluenceTOP: Conceptual

20. As a recruiter for DeeLish Candies, Inc., Joyce has noticed a number of applicants for positions at DeeLish Candies who were laid off from one of its main competitors. This competitor recently completed a major restructuring of the organization. Although Joyce has no direct information about this competitor, she surmises that the restructuring was due to cost pressures. Joyce is probably correct in her guess.

ANS: T PTS: 1 DIF: Moderate REF: p. 19OBJ: 4 NAT: AACSB Analytic LOC: Creation of ValueTOP: Application

21. It is illegal under discrimination laws for a firm to be hiring employees for some positions while simultaneously laying off employees from other positions.

ANS: F PTS: 1 DIF: Challenging REF: p. 19OBJ: 4 NAT: AACSB Reflective Thinking LOC: Legal ResponsibilitiesTOP: Conceptual

22. Because the core of HR management involves working with people one-on-one, the introduction of web-based technology has had little impact on the day-to-day working lives of HR managers.

ANS: F PTS: 1 DIF: Easy REF: p. 19OBJ: 5 NAT: AACSB Technology LOC: Information TechnologiesTOP: Conceptual

23. When HR departments of firms in the same industry collaborate, there is some concern that competitive conflicts may arise.

ANS: T PTS: 1 DIF: Moderate REF: p. 20OBJ: 5 NAT: AACSB Reflective Thinking LOC: Ethical ResponsibilitiesTOP: Conceptual

24. The initial purpose served by an HRMS in an organization is efficiency: quicker processing of data and activities with fewer HR staff.

ANS: T PTS: 1 DIF: Challenging REF: p. 22OBJ: 5 NAT: AACSB Technology LOC: Information TechnologiesTOP: Conceptual

25. HRMS have not been effective at improving HR work flow in most organizations because of educational limitations of hourly-level employees.

ANS: F PTS: 1 DIF: Moderate REF: p. 19OBJ: 5 NAT: AACSB Technology LOC: Information TechnologiesTOP: Conceptual

26. Employee self-service in an HRMS means that employees can handle all their interactions with HR electronically without ever needing to interact face-to-face with an HR professional.

ANS: F PTS: 1 DIF: Challenging REF: p. 21OBJ: 5 NAT: AACSB Technology LOC: Information TechnologiesTOP: Conceptual

27. Firms with high ethical standards are more likely to meet long-term strategic goals than firms which behave unethically.

ANS: T PTS: 1 DIF: Moderate REF: p. 21OBJ: 6 NAT: AACSB Ethics LOC: Ethical ResponsibilitiesTOP: Conceptual

28. Because of higher European standards for business conduct, European businesses are less subject to ethical scandals than are U.S. businesses.

ANS: F PTS: 1 DIF: Easy REF: p. 21OBJ: 6 NAT: AACSB Ethics LOC: Ethical ResponsibilitiesTOP: Conceptual

29. A bribe to a government official will be exempt from the Foreign Corrupt Practices Act if the HR professional involved records the transaction as a gift.

ANS: F PTS: 1 DIF: Challenging REF: p. 22OBJ: 6 NAT: AACSB Ethics LOC: Ethical ResponsibilitiesTOP: Conceptual

30. It is fair to say that at Enron (where there were widespread incidents of corruption) the organizational culture supported unethical behavior.

ANS: T PTS: 1 DIF: Moderate REF: p. 22OBJ: 6 NAT: AACSB Ethics LOC: Ethical ResponsibilitiesTOP: Application

31. A survey of HR professionals indicated that common ethical misconduct in HR activities included favoritism in hiring and promotion as well as personal bias in performance appraisal and pay increases.

ANS: T PTS: 1 DIF: Easy REF: p. 24 | Figure 1-7OBJ: 6 NAT: AACSB Ethics LOC: Ethical ResponsibilitiesTOP: Conceptual

32. With respect to HR management, ethics is primarily concerned with legal compliance to avoid expensive lawsuits and out-of-court settlements.

ANS: F PTS: 1 DIF: Moderate REF: p. 24OBJ: 6 NAT: AACSB Ethics LOC: Ethical ResponsibilitiesTOP: Conceptual

33. An important method for an HR professional to establish credibility internally and externally to the firm is professional certification.

ANS: T PTS: 1 DIF: Easy REF: p. 28OBJ: 7 NAT: AACSB Reflective Thinking LOC: HRMTOP: Conceptual

34. When hiring a benefits specialist for a large organization, the recruiter would be wise to look for a professional with the OHST and/or the CPT certifications.

ANS: F PTS: 1 DIF: Easy REF: p. 28OBJ: 7 NAT: AACSB Reflective Thinking LOC: HRMTOP: Conceptual

35. An individual wanting a position in international HR would be well-advised to seek GPHR certification.

ANS: T PTS: 1 DIF: Easy REF: p. 28OBJ: 7 NAT: AACSB Reflective Thinking LOC: HRM

TOP: Conceptual

ESSAY

1. What are the three major roles of HR management? Which is/are the most affected by technology and outsourcing? Which role is growing in importance?

ANS:The administrative role of HR focuses on clerical administration. It involves processing and record keeping activities. The administrative activities of HR are easily computerized, and are most easily outsourced to vendors. The operational and employee advocate role of HR take up about 30% of HR time. The operational role requires HR professionals to identify and implement needed programs and policies in cooperation with operating managers. This includes legal compliance, processing applications and filling positions, training supervisors, administering wages and salaries, and resolving safety problems. The employee advocate role of HR requires dealing with employee crises, and helping ensure fair and equitable treatment for all employees. The strategic role of HR focuses on HR as a business partner with top management. HR professionals in this role help devise and implement strategy. Examples of such involvement include evaluating mergers and acquisitions, workforce planning, and compensation and incentive plan changes. HR is increasingly playing a strategic role in organizations, while the administrative role is being outsourced and automated.

PTS: 1 DIF: Moderate REF: p. 10-14 OBJ: 3NAT: AACSB Reflective Thinking LOC: HRM TOP: Conceptual

2. What challenges face HR managers with regard to workforce availability and quality? What are potential solutions?

ANS:In many parts of the U.S. there are shortages of workers with needed skills. Although there is not a shortage of potential workers, these workers lack the skills needed to fill the jobs in the current U.S. economy. U.S. students are falling behind competitive nations in math and science, and U.S. schools are not meeting the demand for graduates with degrees in engineering, computers, and health sciences. These shortages have spurred U.S. companies to outsource jobs internationally and to bring skilled workers to the U.S. from overseas. However, strict quotas on foreign workers impede U.S. firms from hiring them in sufficient numbers. It is urgent that U.S. education improve to provide a future workforce with modern skills. The poor preparation of U.S. workers also puts an extra training burden on U.S. employers.

PTS: 1 DIF: Moderate REF: p. 16-17 OBJ: 4NAT: AACSB Reflective Thinking LOC: Environmental InfluenceTOP: Conceptual

3. Describe the major purposes of an HR management system (HRMS) in the organization. Give examples of HRMS uses.

ANS:An HRMS enhances administrative and operational efficiency and it also improves the effectiveness of the organization. Efficiencies are created in the rapid execution of activities and the reduction of paperwork. Organizational effectiveness is served by providing data for HR planning and managerial decision making. Collaboration among HR professionals in different organizations is aided by wikis which enable HR professionals to share information and programs. Web-based systems include bulletin boards, data access systems, employee self-service systems, and linking databases of HR vendors and employers.

PTS: 1 DIF: Moderate REF: p. 20-21 OBJ: 5NAT: AACSB Technology LOC: Information TechnologiesTOP: Conceptual

4. Discuss why ethical issues permeate HR management. Beyond the value of ethics for its own sake, what “practical” value does ethical behavior have for an organization? What are the four elements of ethics programs?

ANS:Ethics deals with what "ought" to be done, not necessarily what “is done.” Ethical issues revolve around questions of fairness, justice, truthfulness, and social responsibility. Organizational ethics are driven by organizational culture, the shared values and beliefs of organizational members. Organizational members look to HR management as the “keeper and the voice” of organizational ethics. The HR department is often the main resource for ethics policies in the organization. The most common unethical incidents observed by HR managers include: employees lying to supervisors, drug and alcohol use, and falsification of records. From a practical perspective, ethical organizations are more likely to meet long-term strategic and profit goals. Ethical organizations are viewed more positively by the community, industry, consumers and other employers. This allows employers to attract and retain employees, as well as avoid lawsuits and regulatory actions. The four elements of ethics programs are: (1) a written code of ethics and standards of conduct, (2) training on ethical behavior for all organizational members, (3) means for employees to obtain advice on ethical situations, and (4) systems for confidential reporting of ethical misconduct or questionable behavior.

PTS: 1 DIF: Moderate REF: p. 21-25 OBJ: 6NAT: AACSB Ethics LOC: Ethical ResponsibilitiesTOP: Conceptual

5. Identify the key competencies needed by HR professionals.

ANS:In order to be a strategic partner to top management, HR managers need competencies in five basic areas: 1) Strategic contribution, (2) business knowledge, (3) HR delivery, (4) HR technology, and (5) personal credibility.

PTS: 1 DIF: Easy REF: p. 25-26 OBJ: 7NAT: AACSB Reflective Thinking LOC: HRM TOP: Conceptual