Entrepreneurship, 3e (Bamford)
Chapter 10 Human Resource Management
1) The success of entrepreneurial firms pursuing new opportunities requires a number of deliberate
actions by the business founder concerning human resources issues.
2) Human resources, defined in economics terms, is the processing of employees in monetary
terms.
3) Human resources has been defined in economics as the quantity and quality of human effort
directed toward producing goods and services.
4) Large firms can absorb bad employees easier than small businesses because they have
organizational slack.
5) Human resource programs for small companies are the same and have the same effects as large
businesses.
6) In an entrepreneurial business, a job description document is meant to be a formal, highly
structured document as it might be in a large corporation.
7) The Civil Rights Act currently applies to firms with more than 10 employees.
8) One action a small business owner might take to establish that the firm is not discriminatory
would be to advertise the job widely in several publications.
9) In an interview, an owner can ask an applicant if he or she has ever been arrested for a crime.
10) Whether hiring for a line worker or a first line manager, an owner should devote the same
amount of time in checking references.
11) If a job is more central to an organization and has higher required skill levels than other
positions, then the importance of employee references decreases.
12) The screening of résumés or applications prior to beginning an interview process for a job and
the checking of references is important.
13) A company can use personality testing, even though there is no direct link between the test and
the skill set necessary for the job.
14) Equity theory is where people judge how we are being treated relative to how we see others
being treated.
15) A frustration of the commission system comes when the firm does not change the rate of the
commission even when the company is doing well.
16) Bonus systems are as well defined as profit sharing and the level of reward is independent of
the discretion of an entrepreneur.
17) The Fair Labor Standards Act (FLSA) establishes a minimum wage for all workers, except
workers on small farms and administrative employees.
18) In a small firm, the cost of health insurance per employee will be equal to that of a large firm.
19) John reviews Michael’s performance on the goals and outcomes that were set 12 months ago.
This is called a goal review.
20) The setting of goals for an employee allows an entrepreneur to judge how well the employee is
performing.
21) Employees are happy and satisfied when they feel that their compensation—given their
performance—is equal to that of other employees in the firm or other individuals in similar
situations. This is called the equity theory.
22) The time period for which profit sharing or bonuses are given should be relevant to the
individuals in a firm and within the realities and constraints of the business.
23) An owner must develop a paper trail regarding an employee’s bad performance.
24) A small business owner should be diligent in documenting the performance of employees over
time. This helps the owner to terminate an employee for poor performance and also efficiently
handle any legal issues that may arise.
25) Workers’ compensation is a law designed so that employees who are disabled or injured while
on the job are provided with some type of compensation.
26) OSHA stands for Office Standards and Health Administration.
27) Any fines levied by the Occupational Safety and Health Administration (OSHA) are equal for
entrepreneurial businesses with fewer than 25 employees as they are for large businesses.
28) ADA stands for the Americans with Disabilities Act.
29) Workers’ compensation insurance rates are regulated by the federal government and are
uniform across the country.
30) The rates of workers’ compensation insurance for individual firms within a particular state are
fairly standard and are generally based on the industry and size of the firm.
31) OSHA has attempted to shape its regulations to be more lenient in its regulations on large
businesses than on small businesses.
32) Unemployment compensation is the financial assistance for some period of time to those
people who lose their jobs through no fault of their own.
33) Human resource management is not as important in family businesses.
34) Human resources in family businesses are critical, but since family members make up many of
the significant employees in the company, everything becomes more delicate.
35) Human resource management includes ________ the employees.
A) hiring
B) inspiring
C) managing
D) all of these
36) ________ is the quantity and quality of human effort directed toward producing goods and
services.
A) Human power
B) Human skills
C) Human knowledge
D) Human resource management
37) Human resources is defined in economics terms as the ________ and ________ of human
effort directed toward producing goods and services.
A) producing; manufacturing
B) monetary; utility
C) quantity; quality
D) developing; producing
38) Which of the following represents the impact of a poor employee on the functioning of a small
business?
A) The problems may bleed over to other employees.
B) The organization does not fully benefit from the employee.
C) The owner’s time is lost.
D) All of these
39) Which of the following is a document that describes a job that is to be filled?
A) Job design
B) Job analysis
C) Job plan
D) Job description
40) When a small business owner is advertising a job, the company needs to attract ________ pool
of applicants to choose from.
A) the smallest
B) the largest
C) the best qualified
D) a diverse
41) Which of the following laws prohibits discrimination in hiring, dismissal, or promotion on the
basis of race, color, gender, religious beliefs, or national origins?
A) The Americans with Disabilities Act
B) The Civil Rights Act
C) The Fair Labor Act
D) The Age Discrimination Act
42) In an interview, an interviewer can ask questions about
A) disability.
B) prior convictions.
C) arrest record.
D) religion.
43) A job offer is finalized by ________.
A) a handshake
B) employer putting it in writing
C) candidate reading the offer
D) candidate signing the offer
44) Job advertisements written for a new hire should
A) contain the current challenges faced by the industry.
B) be similar to the generic advertisements placed every week.
C) give maximum information needed for a potential applicant.
D) be kept concise and should communicate the culture of the firm.
45) Which of the following statements is true of the Civil Rights Act?
A) It allows for the promotion of the differently abled employees irrespective of their performance.
B) It provides that each and every business must provide unfettered access to all disabled people.
C) It ensures that all individuals are judged according to the discretion of an entrepreneur.
D) It currently applies to all firms with more than 25 employees.