Instructor Resource
Kavanagh and Johnson, Human Resource Information Systems: Basics, Applications, and Future Directions, 4e
SAGE Publishing, 2018
Chapter 7: Cost Justifying HRIS Investments
Test Bank
Multiple Choice
1. An HRIS can provide the primary infrastructure used to ______.
a. deliver HR programs
b. ensure HR regulatory compliance
c. produce the metrics that are used to evaluate HR programs
d. all of these
2. A preliminary estimate of the CBA of an HRIS investment should
a. be calculated when the HRIS actual implementation begins
b. be presented to senior management before beginning detailed work on the project
c. be based on the reputation of the HRIS vendor
d. all of these
3. HRIS functionality refers to
a. the ability of the HRIS to function in a cost-effective manner.
b. the number of HR programs that are operational in the HRIS
c. the benefits derived from a CBA analysis
d. how well the HRIS is integrated with other IT applications (e.g., the marketing IS)
4. Using HR audit metrics to measure the effectiveness of one company’s HR programs
against other companies is called ______.
Instructor Resource
Kavanagh and Johnson, Human Resource Information Systems: Basics, Applications, and Future Directions, 4e
SAGE Publishing, 2018
a. organizational enhancement
b. baseline functionality
c. benchmarking
d. risk avoidance
5. Basing the justification of a new HRIS system or upgrade on compliance with Equal
Employment Opportunity (EEO) regulations is an example of ______.
a. the integration of the HR and legal departments
b. an organization enhancement justification
c. a risk avoidance justification
d. a compliance justification
6. To use an organizational enhancement approach for the justification of new HRIS,
one must use ______.
a. benchmarking on HR audit metrics
b. the savings from self-service employee portals as the major savings
c. the savings from decreasing the number of HR employees needed to process the
HRM
d. employee information
e. a cost–benefit analysis
7. Which of the following guidelines should not be a guideline for a successful HRIS
CBA?
a. The objective is improving effectiveness of the HR department.
b. Focus on functionality, not products.
c. Develop the best estimate possible.
Instructor Resource
Kavanagh and Johnson, Human Resource Information Systems: Basics, Applications, and Future Directions, 4e
SAGE Publishing, 2018
d. Know your business.
8. Investment analyses for an HRIS are based the following information:
a. sources of costs and benefits, cost of obtaining financing, and the time when the
organization will incur each cost
b. the time when the organization will incur each cost, the availability of the new HRIS
software, and the cost of obtaining financing
c. an estimated dollar value for each cost and benefit, the availability of the new HRIS
software, and sources of costs and benefits
d. the time when the organization will incur each cost, sources of costs and benefits,
and an estimated dollar value for each cost and benefit
9. Indirect benefits are difficult to quantify because
a. their occurrence may be less certain
b. indirect revenue enhancements result from direct benefits
c. their dollar value cannot be determined
d. the HRIS does not contain the necessary data
10. In terms of estimating costs and benefits for a new HRIS, the critical time period is
______.
a. the first 6 months to 1 year
b. the first 2 years
c. the first 5 years
d. the first 8 to 10 years
Instructor Resource
Kavanagh and Johnson, Human Resource Information Systems: Basics, Applications, and Future Directions, 4e
SAGE Publishing, 2018
True/False
1. The best approach to justify a new HRIS is to identify first what new software
applications are included in the HRIS.
2. A CBA is a comparison of the projected costs and benefits associated with an HRIS
investment.
3. Average employee contribution and employees variance in work outcomes are used
for the determination of compensation levels.
4. Direct costs for implementing a new HRIS application in training would include
reduced absenteeism.
5. Indirect costs for implementing a new HRIS application in training would include lost
productivity during conversion to new system.
6. Internal assessment for estimating indirect benefit magnitude provides the most
precise estimates of the baseline costs and current performance of existing processes.
7. Packaging your CBA for decision makers should be done on a single page.
8. Time saved by the implementation of an HRIS a direct cost reduction.
9. An HRIS CBA that includes an extensive analysis of costs matched with a single
source of benefits (e.g., an estimate of direct cost reductions) is a common problem in
justifying the purchase of a new HRIS.
10. The total cost of an HRIS implementation will be driven by number of employees in
the organization.
11. An integrated information system is one built on common platforms that permit
Essay
1. What is the difference between direct and indirect benefits and costs?
2. What does average employee contribution (AEC) and individual employee
differences (variance) in work outcomes measure in a CBA?
Instructor Resource
Kavanagh and Johnson, Human Resource Information Systems: Basics, Applications, and Future Directions, 4e
SAGE Publishing, 2018
3. What are the three common problems that can occur in an HRIS CBA?
4. What are the two ways HR metrics can used for benchmarking HR activities and
programs?
5. What is the difference between cost reduction and organizational enhancement as
strategies for HRIS investments?
7. What does the term FTE mean in doing a CBA for a new HRIS?
8. What are the three approaches for estimating benefit magnitude?
9. Describe the internal assessment method for estimating benefit magnitude.
Instructor Resource
Kavanagh and Johnson, Human Resource Information Systems: Basics, Applications, and Future Directions, 4e
SAGE Publishing, 2018
10. What are the three steps that should be used to construct dollar estimates of indirect
benefits?