CHAPTER 1—THE CHALLENGE OF HUMAN RESOURCES MANAGEMENT
TRUE/FALSE
1. In general, many companies are realizing diminished demand for “touch labor” and an increasing
demand for “knowledge workers.”
2. Knowledge workers are employees whose responsibilities focus on problem solving.
3. A Human Resource Information System (HRIS) provides current and accurate data for control and
decision-making by managers.
4. To proactively manage change, organizations should wait to see how external forces impact an
organization’s performance, and then develop a plan to address those changes.
5. The strategies companies are pursuing today increasingly involve one or more elements of
globalization.
6. A firm’s ability to compete through people depends upon its ability to manage human capital.
7. Human capital is owned by the organization and is part of the company’s core competencies.
8. Companies are increasingly rotating non-HR managers into HR positions and vice versa to give
exposure to different areas of the organization.
9. Proactive change is change that occurs when external forces have started affecting performance.
10. Human capital is intangible, but can still be managed the way organizations manage jobs, products,
and technologies.
11. Development of human capital is the responsibility of the HR group.
12. Total quality management is a set of principles and practices whose core ideas include doing things
right the first time and striving for continuous improvement.
13. To be successful, organizations should constantly seek to align their processes with customer needs.
14. ‘Six Sigma’ refers to the six criteria for Malcolm Baldrige National Quality Award.
15. Six Sigma is a set of principles and practices whose core ideas include doing things right the first time
and striving for continuous improvement.
16. In absolute terms, the United States remains the world’s most productive nation, even when it comes
to manufacturing.
17. Reengineering is a statistical method of translating customer needs into separate tasks and defining the
best way to perform each task.
18. Over the past twenty-five years, the employment relationship between companies and employees has
shifted from transaction based to relationship based.
19. Labor costs are one of the largest expenditures of any organization.
20. Furloughing is a situation in which a firm asks an employee to take time off, but the employee is still
provided with full pay and benefits.
21. Methods of reducing labor costs include downsizing, outsourcing, and employee leasing.
22. Downsizing is often used by organizations for the planned elimination of jobs.
23. Downsizing was used extensively by firms during the Great Recession of 2008, causing the U.S.
unemployment rate to jump up to about 10 percent.
24. Technology, transportation, communications, and utilities industries tend to spend the least on training.
25. Some organizations have instituted “No Layoff” policies to help preserve institutional memory and
worker productivity.
26. Outsourcing refers to employing workers in their homes rather than within the traditional office
environment.
27. Offshoring greatly improves key competencies of a firm.
28. Corporate social responsibility requires the organization to act in the best interests of the people and
communities affected by its activities.
29. Older workers have significantly higher training costs than younger workers.
30. Educational level is positively related to annual earnings.
31. As many as half of all high school seniors are unable to handle basic math involving fractions,
decimals, and simple algebra.
32. Women now account for slightly more than half of the American workforce.
33. By 2050, the percentage of Hispanics in the United States is expected to nearly triple, while the
percentage of people of Asian descent is expected to significantly decrease.
34. Older workers are often willing to work flexible hours.
35. Employees today are less likely to define success in terms of financial gain.
36. Family-friendly practices include offering flexible hours, telecommuting, and job sharing.
37. One of the responsibilities of HR managers is to provide advice and counsel to line managers.
38. An HR manager is typically expected to function as an in-house consultant to supervisors, managers,
and executives.
39. Because HR managers function in an advisory role, they are responsible for issuing policy revisions
and implementing them.
40. One of the roles of HR managers is to act as employee advocates despite their positions as managers.
41. HR managers establish credibility by supporting the policies and values of the firm.
42. Employee leasing shifts administrative costs from the company to a professional employer
organization.
MULTIPLE CHOICE
1. Which of the following is NOT a competitive challenge within the Human Resources Management
framework?
a.
changes in the marketplace
b.
globalization
c.
technology
d.
employee rights
2. The World Trade Organization (WTO) utilizes ____ to establish rules and guidelines for global
commerce.
a.
NAFTA (North American Free Trade Agreement)
b.
GATT (General Agreement on Tariffs and Trade)
c.
FTAA (Free Trade Area of the Americas)
d.
APEC (Asia-Pacific Economic Cooperation)
3. Knowledge workers require skills in all of the following areas except:
a.
computer programming.
b.
planning.
c.
decision making.
d.
problem solving.
4. Which of the following is the largest employment agency in the United States?
a.
Snelling Personnel Services
b.
Kelly Services
c.
Manpower Inc.
d.
Labor Ready
5. An HRIS extends information technology beyond storing and retrieving information to:
a.
overseeing production planning.
b.
providing current and accurate data for purposes of control and decision making.
c.
providing managers easy access to personnel records.
d.
serving as an intranet communication system.
6. Which of the following is not a primary impact that technology has had on HRM?
a.
It has altered the methods of collecting employment information.
b.
It has speeded up the processing of employment data.
c.
It has diminished the role of supervisors in managing employees.
d.
It has improved the processes of internal and external communications.
7. The operational impact of information technology on HRM includes all of the following except:
a.
administering benefits programs.
b.
improving productivity internal to the HR function.
c.
providing a direct connection to recruitment sources such as Monster.com.
d.
automating routine tasks.
8. The first step in choosing an HRIS is for the HR personnel to:
a.
evaluate the most time-consuming tasks.
b.
examine the user-friendliness of the software.
c.
calculate the cost savings in using an HRIS.
d.
calculate the time required to train the HR staff.
9. A needs assessment for IT investments should include all of the following except:
a.
Initial costs and annual maintenance.
b.
access to private records.
c.
Ability to upgrade.
d.
User-friendly capability.
10. ____ is closely related to corporate social responsibility.
a.
Downsizing
b.
Furloughing
c.
Sustainability
d.
Offshoring
11. Organizational changes are said to be ____ when external forces have already affected an
organization’s performance.
a.
proactive
b.
intentional
c.
reactive
d.
negative
12. What change is initiated by management to take advantage of targeted opportunities?
a.
proactive
b.
intentional
c.
reactive
d.
negative
13. Today, approximately ____ of private sector workers have pension plans.
a.
5 percent
b.
15 percent
c.
25 percent
d.
40 percent
14. ____ is the process of moving jobs closer to one’s home country.
a.
Nearshoring
b.
Outsourcing
c.
Offshoring
d.
The Boomerang Effect.
15. Millennials are also known as:
a.
Baby Boomers
b.
Generation X
c.
Generation Y
d.
Screenagers
16. The values, skills, and capabilities that have a tremendous impact on an organization’s performance,
but do not show up on its balance sheet are known as:
a.
intellectual capital.
b.
human capital.
c.
core competencies.
d.
employee capital.
17. Women who are employed full-time today earn make about ____ of what men employed full-time
make.
a.
50%
b.
2/3
c.
80%
d.
100%
18. To build human capital in organizations, managers should rely upon staffing programs that focus on:
a.
identifying cheap sources of qualified labor.
b.
identifying and hiring the best and brightest talent available.
c.
identifying college graduates with the requisite skills.
d.
identifying individuals with highly specialized skills.
19. _____ is a process used to translate customer needs into a set of optimal tasks that are performed in
concert with one another.
a.
Six Sigma
b.
Total Quality Management
c.
Reengineering
d.
Change Management
20. Managers have to find ways to empower employees and encourage their participation and involvement
to more fully utilize human capital because:
a.
They are figured as part of training costs.
b.
Firms are moving away from team-based structures.
c.
Employee skills often go unused.
d.
Knowledge exchange is the best method of human capital development.
21. A survey conducted by the Human Resource Planning Society revealed that ____ percent of the
responding companies believe that their HR group plays an important role in developing human
capital.
a.
less than 30
b.
nearly 50
c.
between 30 and 40
d.
nearly 65
22. About ___ of what Americans produce every year dollar-wise is sold abroad.
a.
50 percent
b.
30 percent
c.
10 percent
d.
2 percent
23. TQM:
a.
Set of principles and practices whose core ideas include understanding customer needs,
doing things right the first time, and striving for continuous improvement.
b.
Uses statistical methods to translate customer needs into separate tasks and defining the
best way to perform them.
c.
Fundamentally redesigns business processes to achieve improvements in cost, quality,
service, and speed.
d.
Changes the purpose and function of the HR group.
24. The trend towards opening up foreign markets to international trade and investment is knows as:
a.
globalization
b.
offshoring
c.
outsourcing
d.
international economic diversity
25. Six Sigma is a systematic approach to quality that:
a.
Focuses on understanding customer needs, doing things right the first time, and striving
for continuous improvement.
b.
Uses statistical methods to translate customer needs into separate tasks and defining the
best way to perform them.
c.
Fundamentally redesigns business processes to achieve improvements in cost, quality,
service, and speed.
d.
Focuses on improving the HR function through six principles.
26. ______ paved the way for the formation of many major trade agreements and institutions.
a.
GATT
b.
The WTO
c.
NAFTA
d.
The EU
27. Reengineering:
a.
Focuses on understanding customer needs, doing things right the first time, and striving
for continuous improvement.
b.
Uses statistical methods to translate customer needs into separate tasks and defining the
best way to perform them.
c.
Fundamentally redesigns business processes to achieve improvements in cost, quality,
service, and speed.
d.
Changes the purpose and function of the HR group.
28. Which of the following is NOT a characteristic of organizations that have been successful in
engineering change?
a.
linking the change to business strategy
b.
engaging key employees early in the change process
c.
investing in the implementation of change
d.
showing how the change has created qualitative benefits
29. Which of the following is one of the largest expenditures of service companies?
a.
Production costs.
b.
Marketing costs.
c.
Labor costs.
d.
Distribution costs.
30. Which of the following is not an approach used by organizations to try to lower labor costs?
a.
productivity enhancements
b.
outsourcing
c.
employee leasing
d.
employee development
31. Which strategy is the planned elimination of jobs?
a.
downsizing.
b.
outsourcing
c.
TQM
d.
reengineering
32. Approximately ____ of the U.S. economy today is affected by international competition, including
small companies.
a.
25-40 percent
b.
50-65 percent
c.
70-85 percent
d.
90-100 percent
33. A Watson Wyatt study showed that companies with excellent recruiting and retention policies provide
a ____ return to shareholders compared to those that do not.
a.
exact rate of
b.
1.4% lower rate of
c.
1.4% higher rate of
d.
14% higher rate of
34. Layoffs can incur all of the following hidden costs except:
a.
pension and benefit payoffs
b.
increased training expenses
c.
loss of institutional memory and human capital
d.
a paranoid, political workforce
35. Which one of the following is not an HR cost that is typically incurred as a result of downsizing?
a.
severance pay
b.
vacation and sick-day payouts
c.
potential lawsuits
d.
developmental expenses
36. A fiercely loyal workforce, a recruiting edge, and workers who aren’t afraid to innovate are all benefits
of:
a.
downsizing
b.
outsourcing
c.
companies that establish “no layoff” policies
d.
productivity enhancements
37. Hiring someone outside the company to perform tasks that could be done internally is known as:
a.
outplacement.
b.
contracting.
c.
outsourcing.
d.
employee leasing.
38. The practice of moving jobs overseas is known as:
a.
outplacement.
b.
offshoring.
c.
outsourcing.
d.
employee leasing.
39. A method of containing costs that allows firms to maintain working relationships while shifting
administrative costs to another firm is known as ____.
a.
outsourcing
b.
employee leasing
c.
gainsourcing
d.
professional employer organization
40. Employee productivity can be summarized as a function of all of the following except:
a.
Ability
b.
Motivation
c.
Environment
d.
Compensation
41. It is anticipated that in the future, the American workforce will exhibit:
a.
about the same demographic mix as it does today.
b.
an increase in ethnic diversity.
c.
a decrease in ethnic diversity.
d.
a decrease in the number of older workers.
42. Baby Boomers comprise approximately ____ of the population.
a.
16 percent
b.
26 percent
c.
36 percent
d.
46 percent
43. Managers are concerned that the expertise of employees will be rapidly drained from their companies
because:
a.
recruitment of minorities is increasing
b.
large portions of some workforces are nearing retirement
c.
older workers’ skills and performance decline
d.
older workers have higher absentee and accident rates
44. Labor force demographics are expected to change in which of the following ways?
a.
Minorities will make up a smaller share of the U.S. labor force than they did in the past.
b.
Women will make up a smaller share of the U.S. labor force than they did in the past.
c.
Shrinking pool of entry-level workers.
d.
Increased use of temporary workers.
45. Older workers:
a.
have lower performance than younger workers
b.
have higher performance than younger workers
c.
are more willing to work flexible hours
d.
learn new behaviors more quickly because of their experience
46. Over the last few decades, the educational attainment of the U.S. labor force has:
a.
risen dramatically.
b.
fallen dramatically.
c.
remained at about the same level.
d.
had little influence on HRM.
47. The average payoff in annual earnings from education has:
a.
declined.
b.
remained the same.
c.
increased.
d.
resulted in a higher literacy rate.
48. Approximately ___ of mother with school-age children are employed.
a.
11 percent
b.
31 percent
c.
51 percent
d.
71 percent
49. The use and disclosure of personal medical information is protected by:
a.
the Privacy Act of 1974
b.
the Health Insurance Portability and Accountability Act of 1996
c.
the Electronic Communications Privacy Act of 1986
d.
Title VII of the Civil Rights Act of 1964
50. Which of the following does not represent a cultural change emerging in organizations?
a.
an increased concern for privacy
b.
changing attitudes toward work
c.
balancing work and family demands
d.
accommodating unemployed workers
51. Employee rights include all of the following except:
a.
company funded pension plan.
b.
equal employment opportunity.
c.
union representation.
d.
equal pay for equal work.
52. In an attitude survey of 3000 workers, 86 percent of workers said that ____ were their top priorities.
a.
work-life balance and being successful at work
b.
work fulfillment and work-life balance
c.
work fulfillment and being successful at work
d.
being successful at work and high pay
53. Family friendly work options include all of the following except:
a.
day care.
b.
spousal benefits.
c.
parental leave.
d.
job sharing.
54. About _____ of Fortune 500 companies provide same-sex partner health insurance benefits.
a.
34 percent
b.
57 percent
c.
72 percent
d.
81 percent
55. Which of the following is false?
a.
A majority of employees have no children under 18
b.
Family friendly policies have no positive outcomes for firms
c.
Flextime options are on the rise for employees
d.
Family friendly policies may include day care, part-time work, and job sharing
56. A firm’s top ____ manager is in a good position to be the “chief ethics officer” of an organization.
a.
HR
b.
finance
c.
production
d.
marketing
57. Which of the following is NOT an issue related to employee rights?
a.
equal pay for equal work
b.
whistle-blowing
c.
concerns for privacy
d.
job sharing
58. As an employee advocate, HR managers:
a.
formulate and issue policy revisions.
b.
listen to employees and represent their needs to management.
c.
provide individual orientation and training to every employee.
d.
assist employees with labor negotiations.
59. ____ is a competency of the HR manager that entails knowing the business of their organization
thoroughly. One must understand its economic and financial capabilities as well as develop external
relations skills focused on their customers.
a.
Change Mastery
b.
HR Mastery
c.
Business Mastery
d.
Personal Credibility
60. Which of the following is NOT a general responsibility of the HR manager?
a.
Employee supervision
b.
Strategic advice and counsel
c.
Policy formulation and implementation
d.
Employee advocacy
61. ____ is a competency of the HR manager earned by developing personal relationships with internal
customers, by demonstrating the values of the firm, by standing up for one’s own beliefs, and by being
fair-minded in dealing with others.
a.
Change Mastery
b.
HR Mastery
c.
Business Mastery
d.
Personal Credibility
62. Globalization is really of interest to _________ companies.
a.
service
b.
consumer product
c.
large
d.
all
63. Free trade agreements stir fierce debate, especially when it comes to ____________.
a.
equal employment opportunities for women
b.
jobs
c.
proprietary technology
d.
information exchange
64. Globalization has led to a new focus on ________________.
a.
corporate social responsibility
b.
media
c.
recruitment
d.
employee performance evaluation
65. The most obvious impact of technology on HRM has been _____________.
a.
in the area of HR research
b.
operational
c.
applying the latest government regulations
d.
in outsourcing jobs
66. Understanding the organization’s customers and economic and financial capabilities is a part of which
of the following competencies required of HR managers?
a.
personal credibility
b.
HR mastery
c.
business mastery
d.
change mastery
67. Human capital is _____ and _____ be managed the way organizations manage jobs, products, and
technologies.
a.
tangible; cannot
b.
tangible; can
c.
intangible; cannot
d.
intangible; can
68. L. L. Bean softened the impact of downsizing on its employees through _____.
a.
early retirement and “sweetened” voluntary separation programs
b.
outplacement
c.
hefty benefits
d.
aggressive career counseling
69. In absolute terms, which country in the world is most productive?
a.
Japan
b.
United States
c.
Germany
d.
Sweden
70. Today about _____ % of women in the U.S., 16 years of age and older, participate in the work force.
a.
40
b.
80
c.
30
d.
60
ESSAY
1. What are the seven competitive challenges facing human resources management departments?
ANS:
Students should expand upon the following:
2. Discuss the concept of downsizing and some of the hidden costs associated with it.
ANS:
3. Explain the major activities for which the HR manager is typically responsible.
ANS:
4. What implications do the anticipated changes in age and demographics of the workforce have for the
management of human resources?
5. What are some of the key competencies needed by Human Resource Managers to become full business
partners?
6. Describe the role of the line manager.