Fundamentals of HR Management, 8e (Noe)
1) In human resource planning, forecasting is an intermediary step.
2) Statistical models are used for forecasting labor demand because they are good at capturing
“once-in-a-lifetime” changes.
3) A transitional matrix is a chart that lists job categories held in one period and shows the
proportion of employees in each of those job categories in a future period.
4) The second step in human resource planning is performance evaluation.
5) The goals an organization sets in its human resource planning process should come directly
from the analysis of its labor supply and demand.
6) Downsizing can be used to reduce surplus labor because it yields fast results.
7) The negative effect of downsizing would be low among firms that use performance-related
pay incentives.
8) Downsizing disrupts the social networks through which people are creative and flexible.
9) The most widespread methods for eliminating labor shortages are reducing work hours and
endorsing early retirement programs.
10) The use of temporary workers might provide an organization with additional administrative
tasks and financial burdens.
11) Contracting with another organization to perform a broad set of services is called
outsourcing.
12) To ensure success with an outsourcing strategy, companies should outsource work that
requires tight security.
13) When implementing an HR strategy, the organization must hold some individual accountable
for achieving the goals.
14) The steps in a workforce utilization review are identical to the steps in the HR planning
process.
15) In general, all companies have to make decisions in three areas of recruiting: personnel
policies, recruitment sources, and the characteristics and behavior of the recruiter.
16) An organization that uses only external recruitment can wind up with a workforce whose
members all think alike and therefore may be poorly suited to innovation.
17) In the context of recruitment sources, referrals are people who apply for a vacancy without
prompting from the organization.
18) Many of the people reading classified ads are either over- or under-qualified for the position.
19) In the context of recruitment sources, private employment agencies serve primarily blue-
collar workers, while public employment agencies mostly serve white-collar workers.
20) Research suggests that realistic job previews have a strong and consistent effect on employee
turnover.
21) Organizations carry out human resource planning to
A) reduce hiring of workers from colleges and universities.
B) increase hiring costs to match industry standards.
C) avoid taking risks.
D) gain an advantage over competitors.
E) replace technology with highly skilled workers.
22) What is the first step in the human resource planning process?
A) forecasting
B) goal setting
C) program implementation
D) program evaluation
E) performance evaluation
23) In the context of human resource planning, the primary goal of forecasting is to
A) predict labor shortages or surpluses in specific areas of an organization.
B) determine labor supply.
C) set goals for hiring employees.
D) focus attention on a problem and provide a basis for measuring an organization’s success.
E) eliminate large numbers of personnel with the goal of enhancing an organization’s
competitiveness.
24) Identify a benefit of applying statistical forecasting methods.
A) They are particularly useful in dynamic environments.
B) Under the right conditions, they provide predictions that are much more precise than a human
forecaster’s subjective judgment.
C) They are particularly useful in predicting important events that have no historical precedent.
D) They are invariably better than the “best guesses” of experts.
E) They can be used by organizations as a substitute for relying on the subjective judgments of
experts.
25) Nishi, a production manager at Havana Health, must predict future labor demand using
information about inventory levels from the past three years. Nishi will most likely use
________ to predict the demand.
A) yield ratio
B) workforce utilization review
C) trend analysis
D) cost per hire
E) capacity utilization analysis
26) In the context of forecasting the demand for labor, using trend analysis, inventory levels,
changes in technology, and actions of competitors are examples of
A) leading indicators.
B) performance indicators.
C) coincident pointers.
D) transitional matrices.
E) functional pointers.
27) A chart that lists job categories held in one period and shows the proportion of employees in
each of those categories in a future period is called a
A) labor review.
B) trend analysis.
C) Forecast.
D) leading indicator.
E) transitional matrix.
28) Paul is the HR manager at FloGlow Inc., which is preparing for the launch of a new product
line. The company needs to know how many new customer service representatives to add to help
customers with questions and concerns about the existing and new products. To guide the
company, Paul needs information about the number of employees currently providing customer
service, the number likely to be in those jobs next year, and the number expected to move to
other positions in the organization. The information will be easier to organize and interpret if
Paul uses a(n)
A) electronic recruiting process.
B) transitional matrix.
C) propensity analysis.
D) due-process policy.
E) multiple regression analysis.
29) Damien, an HR manager at Guidelines Inc., is preparing for a 5 percent increase in the
production labor force next year. To do this, he needs to determine what the current number of
production employees is and how the number is likely to change by the end of the year. To help
with this analysis, Damien should use a
A) transitional matrix.
B) propensity analysis.
C) trend analysis.
D) multiple regression.
E) leading indicator.
30) The second step in human resource planning is
A) forecasting labor shortage.
B) forecasting labor surplus.
C) goal setting and strategic planning.
D) program implementation and evaluation.
E) program goal setting.
31) Kevin, the CEO of MedImpact Inc., finds that the company needs to eliminate a labor
surplus to avoid financial difficulties. To deal with this problem, he chooses a strategy that gives
him fast results. However, the amount of suffering caused to employees is high. Kevin is most
likely using the ________ strategy to reduce the labor surplus.
A) early retirement
B) downsizing
C) natural attrition
D) retraining
E) hiring freeze
32) Yoza Inc., a manufacturer of electronic goods, is experiencing financial losses. The company
is also facing the problem of a labor surplus due to low demand for its products. In this context,
what would be the best way for Yoza Inc. to deal with this labor surplus?
A) The company must consider work sharing because it causes relatively less suffering to the
employees.
B) The company must choose an early retirement option because it gives an option to employees
to voluntarily leave the organization with suitable monetary compensation.
C) The company must freeze employee hiring and focus on natural attrition because it is a
relatively fast way to reduce a labor surplus.
D) The company must consider downsizing because it is the quickest way to deal with a labor
surplus that results in financial losses.
E) The company must consider retraining employees because it helps improve their interpersonal
skills.
33) Rantly Corp. is eliminating its desktop computer repair center in Minnesota. Meanwhile, the
demand for mobile device repair—a service it provides in Florida and New Jersey—is growing
rapidly. Betsy, a human resource specialist at the Rantly Corp. headquarters in Miami, must plan
to avoid a labor surplus in Minnesota in a fast and effective way. She wishes to do so with
minimal employee suffering in terms of layoffs and salary. Which strategy would best help Betsy
accomplish her goal?
A) pay reductions
B) transfers
C) demotions
D) early retirement
E) hiring freeze
34) Solarn Inc. is a relatively new company that employs 23 workers. When it finished a major
contract, the owner realized that there wasn’t enough work left for all the remaining workers. The
company is negotiating contracts that could provide future work in a few months, but it currently
must address its labor surplus in order to remain financially sound. What is the best strategy to
deal with this labor surplus?
A) an early retirement program
B) natural attrition
C) a hiring freeze
D) downsizing
E) work sharing
35) Charlie, an HR manager at Delaney Inc., is expecting a labor surplus for the company in the
month of November. This gives Charlie nearly eight months to deal with the problem. In order to
reduce the labor surplus, Charlie decides to use a ________ strategy, which causes less suffering
for employees.
A) downsizing
B) demotion
C) hiring freeze
D) pay reduction
E) transfer
36) Marcus and Olivia are HR managers at Tacoma Investments. They are expecting a labor
surplus over the next two years resulting in the organization having 24 more employees than
required. Typically, two employees leave the organization each month. Which HR strategy
should Marcus and Olivia consider, taking into account the length of time they have available?
A) downsizing
B) natural attrition
C) pay reductions
D) demotions
E) transfers
37) Identify the similarity between the natural attrition and early retirement strategies for
reducing a labor surplus.
A) Both strategies yield slow results for an organization.
B) Both strategies cause high suffering to the employees of an organization.
C) Both strategies can be applied for preventing labor shortages.
D) Both strategies are expensive to implement.
E) Both strategies encourage layoffs.
38) Christina, an HR manager at Dixon Inc., is dealing with labor shortage problems due to a
sudden increase in production levels at the company. Among the following options, the fastest
way to fix this problem is to
A) use retrained transfers.
B) focus on turnover reductions.
C) hire new employees.
D) hire temporary employees.
E) focus on technological innovation
39) Brandon, a production manager at Felix Inc., is expecting a labor shortage for a short period
of time. He would like to avoid it with a strategy that can be easily eliminated in the future when
there is optimal labor available for work. Which option for avoiding a labor shortage would be
the right solution for Brandon?
A) hiring new employees
B) employing technological innovation
C) using retrained transfers
D) hiring temporary employees
E) reducing managerial staff
40) Ernie, a manager at a large decoration store, is expecting increased sales during the
upcoming holiday season. He knows that his current workforce will not be able to meet demand,
putting him at risk of a labor shortage. Which strategy would be the best option to help Ernie
avoid a labor shortage?
A) Ernie should hire new employees because he will most likely need additional workers after
the holiday season to deal with an increasing sales trend.
B) Ernie should increase his current employees’ pay during the holiday season so they will work
harder to achieve sales targets.
C) Ernie should keep his store closed during non-peak hours to compensate for labor shortages.
This will ensure his current employees work harder during peak hours.
D) Ernie should hire temporary employees because he can let them go once the holiday season is
over.
E) Ernie should consider increasing the prices of toys so he can make higher profits with fewer
sales, thereby reducing the number of customers and consequently solving the labor shortage
issue.
41) Identify the similarity between the outsourcing and overtime strategies for avoiding a labor
shortage.
A) Both strategies yield slow results.
B) Both strategies have high revocability.
C) Both strategies are expensive to implement.
D) Both strategies involve contracting with another organization to perform a broad set of
services.
E) Both strategies can be used for reducing labor surplus.
42) Taryn, an HR manager at NetHint Inc., hires employees who provide a specific set of
knowledge and skills that will give her company advantage over its competitors. In the context of
strategic planning, Taryn is
A) outsourcing a broad set of services.
B) using propensity analysis.
C) seeking leading indicators.
D) hiring individuals with a core competency.
E) using trend analysis.
43) Jacob, the CEO at Einstein Inc., learns that his company is perceived as low-value by
customers. He plans to combat this by hiring highly skilled and knowledgeable employees in
order to improve Einstein’s competitive standing. In this scenario, Jacob will most likely be
hiring
A) outsourced employees.
B) offshored employees.
C) employees with a core competency.
D) employees with a college degree.
E) temporary workers.
44) Betty heads the production department at Riffer Inc., a firm that stresses the importance of
maintaining regular contact with customers. Betty is expecting a labor surplus in the future.
Mike, a supervisor, recommends downsizing as an option to deal with this labor surplus,
however, Betty rejects this option. Which statement will validate that Betty made the right
decision?
A) Downsizing cannot be used to reduce the number of managers.
B) Downsizing would result in increased operational costs.
C) Downsizing cannot provide an immediate solution to labor surplus.
D) Downsizing would hurt long-term organizational effectiveness.
E) Downsizing would harm the hierarchy of top management.