Chapter 20—Managing Human Resources
TRUE/FALSE
1. Human resource management of small firms should be identical to large companies but adjusted for
size.
2. The goal of recruitment is to obtain a pool of applicants large enough to contain a number of talented
prospects.
3. The quality of a firm’s employees determines the firm’s potential.
4. Payroll is typically a small expense for most small businesses.
5. Small firms need to identify their distinctive advantages if they are to recruit outstanding prospects
successfully.
6. Small firms suffer a recruiting handicap because of the ability of large companies to offer more
freedom on the job.
7. The Internet is a low-cost, effective tool for recruiting qualified candidates.
8. Universities are good sources of candidates for positions that require a high level of experience.
9. Public employment offices are a useful source of clerical workers, unskilled laborers, production
workers, and technicians.
10. Private employment agencies administer the various state unemployment insurance programs.
11. The fees charged by a private employment agency are paid by the hiring firm, not the applicant.
12. Temporary help agencies are good sources of employees when extensive training is required.
13. The use of temporary employees provides management with an introduction to individuals whose
performance may justify an offer of permanent employment.
14. Employee referrals provide a rich source of good applicants for many small firms.
15. The source that accounts for most new hires is help-wanted ads in newspapers.
16. Executive search firms should only be used by large companies because of their cost.
17. The cost of using a headhunter makes using their services unrealistic for small businesses.
18. Because help-wanted advertising tends to be ineffective, most well-managed organizations reject this
method of recruitment.
19. The balance of the U.S. workforce is rapidly shifting toward higher proportions of women, older
workers, and racial minorities.
20. Small companies are more likely to employ immigrants than larger firms.
21. When innovation is important to a firm’s competitiveness, the company should steer clear of hiring
minorities.
22. A job description refers to a listing of the knowledge, skills, abilities, and other characteristics
necessary to perform a job.
23. In small firms, a professional’s versatility and flexibility may be more important than technical
competence.
24. The job specifications list the duties the incumbent is expected to perform.
25. Job descriptions are used primarily to avoid lawsuits that might result from the Americans with
Disabilities Act.
26. A person who interviews well should not automatically be hired.
27. Released employees are much less likely to sue if they feel their former employer provided ample
opportunities to improve their performance before being fired and the company was fair throughout
the process.
28. A negligent hiring lawsuit can ensure from a failure to check the background of a new hire.
29. Most small businesses complete their own background investigations of job applicants by using
information readily available online.
30. Requesting a credit report to establish an applicant’s employment eligibility is illegal according to the
Fair Credit Reporting Act.
31. The hiring practices at 37signals support small firms using additional “test drives” even if a
prospective employee has passed a reliable and valid test.
32. According to the Occupational Health and Safety Administration, 85 percent of all on-the-job
accidents can be traced to substance abuse.
33. Obviously, training helps prepare a new employee to perform the duties for which he or she has been
hired.
34. Continual training is necessary to update knowledge and skills in firms of all sizes.
35. Orientation refers to instructions given during the interview with an applicant.
36. A small business can facilitate the orientation process by providing an employee handbook, which
outlines the company’s practices and procedures.
37. The purpose of job instruction training is to help supervisors eliminate employees who are weak hires.
38. Research indicates that more than 40 percent of the training provided to employees each year is
applied on the job.
39. The small firm has a particularly strong need to develop both managerial and professional employees.
40. Small firms must be exceed large firms in wage and salary levels in order to attract well-qualified
personnel.
41. A sales commission compensation plan is a type of time-based compensation system.
42. Profit-sharing is of little use as an incentive in small companies because profits are often too small to
share.
43. Employee benefits are expensive, amounting to more than 40 percent of payroll expense for many
small firms.
44. ESOPs can motivate employees as well as allow for owners to withdraw from a business without
having to sell the firm to outsiders.
45. A limited but growing number of small businesses now use flexible benefit plans so employees can
select the benefits they wish to receive.
46. PEOs typically charge a fee of at least 7 percent of payroll to a small business.
47. Because outsourcing companies typically employ hundreds or thousands of people, they can afford to
offer benefits superior to those offered by the typical small firm.
48. Unions typically concentrate their primary attention on small companies, where their influence is most
needed.
49. By following constructive personnel policies, small firms can improve the relationship between
management and a union.
50. As a firm grows, it experiences pressure to formalize its personnel policies and procedures.
51. In a small business, a human resource manager is generally desirable when employee morale is
satisfactory and the labor turnover is extremely low.
MULTIPLE CHOICE
1. One of the largest expense categories for most businesses is
a.
advertising.
b.
research and development.
c.
payroll.
d.
professional fees.
2. Judy, a small business owner of a CPA firm, wishes to persuade a highly qualified applicant to
consider a position with her firm, even though the applicant has also had offers from large corporate
CPA firms. What should Judy emphasize to the applicant?
a.
family atmosphere with only three employees
b.
long history of the firm with no take overs
c.
more freedom to structure job responsibilities
d.
retirement program and other benefits
3. Tom is experiencing difficulty in recruiting competent technicians for his business. One way to
increase the attractiveness of his small business is by using
a.
flexible work schedules.
b.
job descriptions.
c.
performance testing.
d.
private employment agencies.
4. Since Cynthia needs to obtain a replacement for Olivia (who is having a baby and will be out for 12
weeks), what would be the expected first choice to locate a replacement?
a.
employee referrals
b.
help-wanted advertising
c.
public employment agencies
d.
temporary help agencies
5. Which source of candidates do small business owners say accounts for most of their hires?
a.
Walk-ins
b.
Schools
c.
Internet
d.
Employees
6. Jan is ready to franchise her retail clothing store and is needing to hire a new manager that has
knowledge in the franchising process. Which recruiting source would be best?
a.
temporary help agencies
b.
leasing companies
c.
headhunters
d.
employees
7. The differences among employees on such dimensions as gender, age, ethnicity, and race is known as
a.
job specification.
b.
workforce diversity.
c.
human resources.
d.
workforce differences.
8. The U.S. Department of Labor projects which trend in workforce composition?
a.
Increased numbers of Hispanic workers
b.
Decreased average age
c.
Decreased numbers of Black and Asians workers
d.
Increased participation of women in the workforce
9. The owner of a small automobile garage has been advised to use an application form in evaluating
applicants. This form will be most useful in discovering
a.
arrest records.
b.
general background information.
c.
physical disabilities.
d.
religious orientation.
10. Prospective employers can legally select employees based on the applicant’s
a.
age.
b.
disabilities.
c.
education.
d.
gender
11. What type of interviewing involves asking applicants how they might react to hypothetical situations?
a.
Behavioral
b.
Depth
c.
Stress
d.
Traditional
12. Which question would be expected from a small business using behavioral interviews?
a.
How did you learn to write so well?
b.
Where did you attend school?
c.
What do you do for fun?
d.
Tell me about a time when you managed a major project.
13. Karen is checking references and finds former employers reluctant to do more than verify dates of
employment even though the applicants have given their consent. A probable reason for their
reluctance is that
a.
records for former employees are typically not readily available.
b.
the former employee is glad to have the potential employee not employed with their
company.
c.
respondents may fear litigation by former employees who fail to get jobs they seek.
d.
Karen is asking too many personal questions.
14. Which percentage of recruiters and human resource professionals report that they research job
applicants online with most using sources such as Facebook?
a.
91%
b.
67%
c.
43%
d.
35%
15. To be the most useful, a test for a potential applicant should be
a.
general in nature.
b.
practical.
c.
psychological in nature.
d.
valid and reliable.
16. Marcia knew the importance of testing candidates before hiring them, but 40% of the employees who
successfully passed the employment test later performed poorly on the job. Marcia’s employment test
lacked
a.
applicability.
b.
interpretability.
c.
reliability.
d.
validity.
17. The Americans with Disabilities Act requires employers of at least ____ employees to make ____
adaptations to facilitate the employment of individuals protected by the act.
a.
50, minimal
b.
15, reasonable
c.
100, specific
d.
10, verifiable
18. Preparation of employees for career advancement through education, job experiences, network
development, and performance assessment is called
a.
employee training.
b.
human resources.
c.
management development.
d.
workforce diversity.
19. New employees benefit most from orientation when it is given
a.
during the employment review.
b.
after selection, but prior to reporting for work.
c.
during the first two or three days on the job.
d.
during the first year of employment.
20. Planned efforts to help workers master the knowledge, skills, and behaviors they need to perform their
duties is known as
a.
employee training.
b.
human resources.
c.
management development.