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Appendix B-1
| Appendix B – Chapter Exercises
CHAPTER 1 – CHAPTER EXERCISES
Chapter Exercise 1.1
An Interview with an HRM Specialist
Objective. The purpose of Exercise 1.1 is to give the student a personal feel for the role of an HRM
manager or specialist in an organization. The problems that are cited by the people interviewed
should reflect the trends discussed in Chapter 1.
Description. Students should be given a few weeks to set up and conduct the interviews. Due to the
nature of the exercise, the week in which you are going to cover Job Analysis (Chapter 4) is the most
appropriate time to collect Form 1.1.1, and conduct the group discussions in the context of the job
descriptions and job specifications for the personnel who are interviewed. These two products of job
analysis are covered in Chapter 4.
The exercise is easy to conduct at urban institutions and difficult in rural institutions unless the
professor allows telephone or e-mail interviews. The Directory of the Society for Human Resource
Management (SHRM) is an excellent source for telephone contacts. You can contact SHRM at
www.shrm.org. If your school has an SHRM liaison, he or she should have the Directory. Class
discussion should relate problems cited by the HRM people, directed toward the trends discussed in
Chapter 1.
This exercise can be combined with a written assignment that recommends specific HRM
interventions for problems identified within the organizations represented. For example, staffing
problems could be identified and attacked using better recruitment (Chapter 5) or more valid
selection techniques (Chapters 6). Performance management problems could be tackled with more
valid performance appraisal techniques tied to the strategic goals of the organization (Chapter 7) and
perhaps pay for performance systems (Chapter 11). Health care costs could be researched and
controlled through cost care management programs (Chapters 10 and 14). Labor realtions issues may
also be particuarly timely (Chapter 13).
Students should be given almost the full length of the course to submit a final set of
recommendations for HRM interventions although different interventions could be presented in a
working paper throughout the term.
Appendix B-2
| Appendix B – Chapter Exercises
Procedure for Exercise 1.1
For Step 1, Part B of Exercise 1.1, groups of no more than 6 students should be assembled using a
that all group members can review all other student forms. As an alternative, students can be paired
We recommend that the instructor select spokespersons for Step 2. Each group should summarize the
range of HRM specialists interviewed, the range of problems described, and the activities the
organization is pursuing in response to the problems.
The variance in backgrounds and responsibilities of HRM professionals should be apparent after
discussion. As we discuss in Chapter 1, while there is an increase in the number of highly trained and
educated HRM professionals with advanced degrees in the subject or related disciplines (e.g., MBAs,
Problems Identified in the Survey Using Form 1.1.1.
Based on survey responses, service organizations in particular indicate considerable difficulties in
hiring and retaining skilled personnel. Health care costs are often cited as a major problem in service
Appendix B-3
| Appendix B – Chapter Exercises
© 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
performance management problems. Public sector HRM professionals lament over greater demand
for services, shrinking budgets, and hiring freezes.
A significant number of HRM professionals have indicated a lack of support or resistance from line
management. Many managers perceive HRM departments as reactive and often as obstacles to
getting things done. The most effective HRM departments and programs are those that are
Appendix B-4
| Appendix B – Chapter Exercises
Table 1.1.1
Most Common Private Sector Problems
More common problems in service organizations are marked by an asterisk (*).
Ensuring compliance with regulatory agencies and laws (EEOC, ADA requirements, OSHA)
Lack of employee motivation*
Negligent hiring
Ineffective performance appraisals*
Increasing levels of teamwork
Most Common Public Sector Problems
Cost cutting/staff reductions
Workload increase/workforce freeze and reduction
Safety programs
Insufficient funding
Childcare
Appendix B-5
| Appendix B – Chapter Exercises
Chapter Exercise 1.2
An Assessment of Customer Satisfaction
and the Relationship to HRM Activities
Objectives. The purpose of Exercise 1.2 is to relate HRM activities to customer satisfaction. The link
between particular HRM practices (the domains introduced in Ch 1) and meeting or exceeding
customer requirements will be discussed.
Description. Part A requires each student to write critical incidents regarding customer service and
satisfaction. Examples of both excellent and poor service are requested. Tables 1 and 2 present a
summary of results using Exercise 1.2. The most frequently cited causes for excellent and poor service
are presented from the perspectives of practicing HRM specialists and undergraduate or graduate
students. These groups were given incidents as written and then asked to speculate on the most
important "cause" of the good or bad incident.
Many critical incidents are written which focus on product quality, the assessment of which (as
described) is largely independent of the point of contact with an employee. Many students related
incidents involving poor products which customer representatives could do little or nothing about
regardless of the employees' levels of motivation, ability or knowledge.
As discussed in Chapter 1, however, the instructor should point out that product quality can been
linked to HRM activities that may not be apparent to the student. SAS, the highly successful computer
Appendix B-6
| Appendix B – Chapter Exercises
requirements is, of course, a major HRM responsibility. (This is a major point in Jeffrey Pfeffer's book
on Competitive advantage) and a theme of this book.
However, for services (e.g., universities, hotels, restaurants, airlines, dry cleaners), it is clear that the
practices and selection ratios. Lower selection ratio (ratio of # of openings to # of applicants (lower is
better) is related to recruiting efforts and hiring practices are good or bad to the extent that they
predict success on the job and trainability. Organizations that have lower selection ratios combined
compensation. Students tend to believe that the company did something which created the
employee's attitude or that the company failed to provide adequate training regarding the product or
service.
HRM specialists place relatively greater weight on personnel selection methods to improve the
organization in this area. There may be a more "can't make a silk purse out of a sow's ear" orientation
Appendix B-7
| Appendix B – Chapter Exercises
© 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
customer-based market research, work design activities, and information systems as major
contributors to service quality as well (back to Pfeffer's book).
Customer Satisfaction and Price
Many students write incidents in which they mention satisfaction in the context of price and we know
price enters into assessments of "customer value" (you expect a little more from the Ritz-Carlton than
Motel 6 or the Lexus dealer as opposed to your Ford Focus salesperson). Given this, the instructor
that customers include questions such as "is this made in America?" or "does this company do right by
its employees?" in their decisions to purchase equation the realized cost savings to foreign production
is reduced. To date, these types of questions have not been given much weight in the equation
relative to bottom-line price and actual product quality. Due to the political rhetoric on this issue,
however, the competitive advantage of domestic production could ultimately be enhanced. Review
the history of Levi Strauss for an illustration of this difficult issue.
The political fall-out of work outsourced or performed by contracted employees within the U.S.
should be far less onerous (if burdensome at all). However, the key question here is the effect of the
Appendix B-8
| Appendix B – Chapter Exercises
© 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
only labor costs while ignoring the effects of the quality of products or services provided by
outsourced or contracted companies may be doomed to failure. Please note that many
downsizing/outsourcing programs do not meet their objectives and/or save as much money as
projected.
Table 1.2.1
Most Frequent Examples and Causes of Excellent Product/Service
SOURCE: HRM Specialists
Example/ Categories Causes
Actual product or service quality - (1)*market research, customer knowledge
Departmental communication/
cooperation - (2) job design, work teams
SOURCE: Students
Actual product or service quality - (1) knowledge of customer requirements
through market research
Appendix B-9
| Appendix B – Chapter Exercises
Table 1.2.2
Most Frequent Examples and Causes of Poor Product/Service
SOURCE: HRM Specialists
Examples/ Categories Causes
Employee attitudes regarding
customer problems - (3)* personnel selection
(4) supervision
(5) training
Employee knowledge of product
- (6) distribution
SOURCE: Students
Employee attitudes regarding - (2) training
customer problems - (3) compensation
- (5) selection
delivery - (4) work design
- (6) distribution
* Number of HRM activity in parentheses represents rank ordering of the causes of customer
dissatisfaction with product or service across all examples or categories.
Appendix B-10
| Appendix B – Chapter Exercises
Table 1.2.3
Mean Self & Peer Assessments
for Exercise 1-b
1. Not at all
SELF
PEER
TO WHAT EXTENT DID YOU (PEER):
4.2
4.1
1. Help to establish a clear course of action needed to complete the work?
3.9
3.7
2. Speak effectively in the group?
3.6
3.5
3. Argue persuasively for a point of view?
3.8
3.6
4. Present your point of view concisely?
3.5
3.6
5. Write clearly and concisely?
4.4
4.3
6. Show sensitivity to other group members?
4.0
3.9
7. Stimulate and guide group members toward resolution of the
assignment?
4.4
4.1
8. Listen carefully to other opinions and suggestions?
3.9
4.1
9. Analyze all pertinent information carefully before taking a position?
4.4
4.0
10. Display a willingness to state a position in a complex situation?
Appendix B-11
| Appendix B – Chapter Exercises
© 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Exercise 1.2 Assessment Questions
1. Describe the experience you had in providing feedback on your designated discussant’s
performance. To what extent did you feel comfortable in that role?
Students tend to feel uncomfortable in providing feedback for a number of reasons. First, with the
short observation period and assessment period, they may be uncertain about the validity of their
2. How might that role be improved with better directions, better assessment devices, etc.?
Research in performance appraisal also shows that the extent to which the rater feels uncomfortable
in the process of giving performance feedback predicts the extent to which the rater makes relatively
3. How did you feel about receiving feedback on your group performance? To what extent did
you find the feedback helpful? How might that process be improved?
Students tend to feel more comfortable receiving feedback than providing it. Of course, the high
4. Did this exercise give you a better understanding of the relationship between HRM related
activities and customer satisfaction? Explain your answer.
One implication from this exercise should be that customer satisfaction in services is closely linked to
the performance of the contact employees. In the services, many workers typically perform their
major functions at the same time that the service is consumed by the customer and their
Appendix B-12
| Appendix B – Chapter Exercises
© 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
aspects of the product or service quality. HRM activities such as selection, training, compensation and
supervision are all critical activities related to the performance of these employees. Our survey work
also clearly show that issues related to work design, information systems analysis, and
customer-based analysis are critically related to customer perceptions of product and service quality.
HRM experts must maintain this customer-driven focus as they monitor the effectiveness of the
various HRM activities.
Appendix B-13
| Appendix B – Chapter Exercises
Chapter Exercise 1.3
HR Issues at Valley National Bank
Dave Ulrich
Objective. The major learning objective for Exercise 1.3 is to relate HRM activities to the competitive
strategies and advantages of the organization through a SWOT analysis. Effective HRM activities are
well integrated with the strategic plan of the organization and can create several competitive
advantages. This case describes a bank with potential for "technological" and "financial" competitive
advantages but has several HRM characteristics that presently exhibit "organizational capability"
disadvantages.
Description. VNB has an opportunity for immediate competitive advantage due to financial and
technological capabilities. However, organizational capability is such that the Bank could lose the
potential advantages of the aforementioned capabilities due to HRM problems. The additional $2
billion in assets and the innovative information tools may not be properly utilized without swift
interventions with regard to the Bank's HRM practices.
Table 1.3.1 presents the chronological priority list of HRM issues requiring the accounting
1. Determine the critical competencies required in the context of the goals for the department and
2. Assess the extent to which the current incumbents possess these critical competencies;
3. Develop training or selection programs where there are discrepancies between competencies
required and competencies possessed by the incumbents; and concurrently,
4. Develop a compensation system commensurate with the competencies required for the positions
and the goals of the accounting department and VNB.
The first HRM area in need of action is to clearly define the requirements for the department and the
various job positions in the context of the specific goals for the department and the potential
competitive advantages to be exploited. One emphasis should be on a determination of the type and
After the critical competencies are determined, an assessment of incumbent knowledge should be
made for purposes of determining the compatibility of skills required with incumbents' skills and,
Appendix B-14
| Appendix B – Chapter Exercises
© 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
assuming there is a discrepancy, the training and/or personnel staffing requirements needed to
eliminate the discrepancy.
As the necessary training or personnel selection procedures are being developed for solutions to the
discrepancies, a thorough study of the compensation system is now warranted. A process of linking
the reward system with the strategic plan should be pursued culminating in a modified salary
structure based on the new job descriptions.
No action should be taken with the current staff until these compensatory steps are accomplished
contributing to the strategic aspects of the departmental needs. A determination should be made on
the extent to which Carla Goodman's past performance has been measured reliably, and whether her
knowledge and skills are compatible with the new departmental needs. While it appears her
technical skills may also be her strongest assets, Ms. Roberts should assess these skills relative to the
negative allegations. A determination should then be made of the extent to which the negative
litigation.
Similar analyses of personnel should also be followed for Mr. Williams and Ms. Lewis. After
competency requirements are determined, a reward system should be established which creates
internal equity among employees. Ms. Roberts should restructure the department with the
Appendix B-15
| Appendix B – Chapter Exercises
Table 1.3.1
HRM Issues in Need of Attention (In order)
1. Determine the critical competencies required for the achievement of the strategic goals and
competitive advantages of the department and bank.
Domain: Organizational design.
2. Assess incumbent knowledge, skills, and abilities in all critical competencies and determine
any discrepancies.
3. Develop training and/or selection programs where there are discrepancies between
competencies required and competencies possessed by employees.
Justification: Assuming there are discrepancies in competencies, they must be eliminated through
training and selection.
4. (Same time as Step #3) develop a compensation system commensurate with the
competencies required for the positions and the goals of the department and VNB.
Justification: Present system creates major competitive disadvantage; key personnel underpaid,
others overpaid.
Appendix B-16
| Appendix B – Chapter Exercises
© 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
is presented which indicates sex discrimination, although an internal inquiry should be made
immediately.
Appendix B-17
| Appendix B – Chapter Exercises
Exercise 1.3 SWOT Analyses
Strengths
The bank is in the unique position of acquiring a large influx of capital. The company’s technical
Weaknesses
There are serious “organizational capability” issues that are clear weaknesses; personnel problems
abound in this organization. Some employees need to be reassigned. Others possibly need to be
Opportunities
With the acquisition of the bank, VNB is in a capital position to hire good people, train employees
Threats
The fundamental threat is the disarray of the HR function. Wage inequity could cause turnover.
Appendix B-18
| Appendix B – Chapter Exercises
Exercise 1.3 Assessment Questions
1. Do you agree or disagree with the recommendation of Mr. Sterrett? Explain your position.
Is it lawful to cut employee pay as Mr. Sterrett’s recommends?
2. What other information would be helpful in preparation for recommending action to be
taken?
3. What steps would you take to determine the legality of your actions?
4. What is "unique" about VNB and how could the uniqueness give the bank a competitive
advantage?
The $2 billion in new assets and the technological software are the "unique" capabilities that can
5. Among the major activities of HRM (see Figure 1-3), what domain usually drives other HR
domains when significant organizational change is necessary?
Organizational design isssue are almost always what should be addressed first (see page 10). In
Appendix B-19
| Appendix B – Chapter Exercises
Chapter Exercise
Exercise 2.1 - International HR Strategies: The Derivation of Policy
Brenda E. Richey
Objective
This exercise introduces the student to the complex compensation issues that face the multinational
firm. Concepts students should take away include the impact of culture on compensation systems, an
understanding of the factors that should be considered in setting up a compensation system in a
foreign subsidiary and the extent to which firm strategy may impact the appropriate level of
compensation system integration. The case can be used as a vehicle to discuss specific compensation
issues in a global setting and as a starting point for a wider discussion of the role of the global
economy on employees. The immediate issues facing O’Dell include both compensation levels and
the extent to which the home company compensation package is appropriate for the Indian
subsidiary. To resolve these issues, O’Dell is going to need to reconcile corporate needs and company
wide “best practices” with national differences.
Description
This exercise should take students 30 minutes to an hour to prepare by reading the case and to give
thoughtful answers to Form 2.1.1. This should stimulate students to think of all the HRM questions
that need to be addressed in organizations expanding into global operations.
Table 2.1.1
Answers for Form 2.1.1
1. How does culture affect the role of pay as a motivating force for workers? Would this issue
be raised differently in the United States?
The instructor may want to discuss the manner in which the compensation issues were raised in the
case. How employee satisfaction (or more importantly, dissatisfaction) is communicated may also
differ by country. In this exercise the issue is raised in a conversation that was “overheard” by one of
Appendix B-20
| Appendix B – Chapter Exercises
© 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
the extent and manner in which compensation serves as a performance motivator. These factors
suggest that it is difficult to develop a global compensation plan that is also the “ideal” for each nation
in which a firm operates.
2. What would be the advantages and disadvantages of using the existing LG compensation
package in India? How might it differ from a more typical Indian package? What additional
information would O’Dell need to make this decision?
Whether the existing compensation package is appropriate for the new subsidiary can only be
determined by considering both legal aspects and broader cultural factors that may determine what
will work in the new context. Adopting the existing package may seem to counter some of the
apparent dissatisfaction about compensation differences. It may also be argued that it will simplify
Typical items mentioned should include: Local laws on compensation; local taxes policies; national
norms on health care (is health care socialized or does the firm provide it; if socialized should the firm
provide a supplemental plan; does the firm or the individual usually pay the premiums); national
3. What other human resource issues might O’Dell need to be concerned about? Prepare a list
and explain how they might interact.
It is, of course, difficult to contemplate a compensation system that is not tied to the related HR
practices of selection, training, and performance evaluation. The most closely related issues in this
case would be performance evaluation. In the U.S. context, a relationship between employee
