Human Resource Management (HRM) Exam Questions
For Business Management Students
Date: June 10, 2025
Instructions
This exam practice set is designed for Business Management students, focusing on HRM’s
role in achieving organizational success. It covers key topics: recruitment, training and de-
velopment, performance management, compensation, employee relations, strategic HRM,
diversity, globalization, and HR technology. The exam includes three sections: Multiple-
Choice Questions (MCQs), Short-Answer Questions, and Essay Questions. Answer all
questions in the provided answer booklet. Total marks: 100. Time allowed: 3 hours.
Calculators are not permitted. Answers should be clear, concise, and supported with
business-relevant examples where required.
1 Multiple-Choice Questions (40 marks)
Each question is worth 2 marks. Choose the correct option and provide a brief justification
in the answer booklet.
1. What is the primary role of HRM in a business organization?
a) Maximize employee turnover
b) Align human resources with business strategy
c) Focus solely on payroll administration
d) Eliminate training initiatives
Answer: b) Align human resources with business strategy
Justification: HRM integrates employee management with business goals to drive
organizational success.
2. How does HRM differ from Personnel Management in a business context?
a) HRM is administrative, while Personnel Management is strategic
b) HRM focuses on strategic employee development, while Personnel Management
is task-oriented
c) HRM only handles recruitment, while Personnel Management focuses on com-
pliance
d) There is no difference between the two
Answer: b) HRM focuses on strategic employee development, while Personnel Man-
agement is task-oriented
Justification: HRM aligns with business strategy, emphasizing growth, while Per-
sonnel Management handles routine tasks.
3. What is the initial step in the recruitment process for a business?
a) Conducting interviews
b) Identifying staffing needs
c) Advertising vacancies
d) Onboarding new hires
Answer: b) Identifying staffing needs
1
, Justification: Recruitment starts by assessing business needs to ensure alignment
with strategic objectives.
4. Which tool is used in Human Resource Planning (HRP) to support business fore-
casting?
a) SWOT Analysis
b) Markov Analysis
c) PESTLE Analysis
d) Balanced Scorecard
Answer: b) Markov Analysis
Justification: Markov Analysis predicts workforce transitions (e.g., promotions,
turnover) to support business planning.
5. What characterizes training in a business setting?
a) Long-term career growth
b) Short-term skill enhancement for current roles
c) Strategic workforce forecasting
d) Employee retention planning
Answer: b) Short-term skill enhancement for current roles
Justification: Training improves immediate job performance, unlike development,
which prepares for future roles.
6. What is a challenge of individual performance-related pay (IPRP) in businesses?
a) Encourages teamwork
b) May lead to biased appraisals
c) Simplifies performance evaluation
d) Increases employee retention
Answer: b) May lead to biased appraisals
Justification: Subjective evaluations in IPRP can result in unfair rewards, impact-
ing morale.
7. Employee Involvement and Participation (EIP) in a business primarily enhances:
a) Payroll accuracy
b) Organizational innovation
c) Recruitment costs
d) Legal compliance
Answer: b) Organizational innovation
Justification: EIP fosters employee ideas, driving business innovation and compet-
itiveness.
8. Which of the following is an ethical issue in HRM within a business?
a) Offering competitive salaries
b) Discrimination in hiring practices
c) Providing training programs
d) Conducting performance appraisals
Answer: b) Discrimination in hiring practices
Justification: Unfair hiring violates ethical and legal standards, harming business
reputation.
9. How does globalization impact HRM in multinational businesses?
a) Reduces workforce diversity needs
2
For Business Management Students
Date: June 10, 2025
Instructions
This exam practice set is designed for Business Management students, focusing on HRM’s
role in achieving organizational success. It covers key topics: recruitment, training and de-
velopment, performance management, compensation, employee relations, strategic HRM,
diversity, globalization, and HR technology. The exam includes three sections: Multiple-
Choice Questions (MCQs), Short-Answer Questions, and Essay Questions. Answer all
questions in the provided answer booklet. Total marks: 100. Time allowed: 3 hours.
Calculators are not permitted. Answers should be clear, concise, and supported with
business-relevant examples where required.
1 Multiple-Choice Questions (40 marks)
Each question is worth 2 marks. Choose the correct option and provide a brief justification
in the answer booklet.
1. What is the primary role of HRM in a business organization?
a) Maximize employee turnover
b) Align human resources with business strategy
c) Focus solely on payroll administration
d) Eliminate training initiatives
Answer: b) Align human resources with business strategy
Justification: HRM integrates employee management with business goals to drive
organizational success.
2. How does HRM differ from Personnel Management in a business context?
a) HRM is administrative, while Personnel Management is strategic
b) HRM focuses on strategic employee development, while Personnel Management
is task-oriented
c) HRM only handles recruitment, while Personnel Management focuses on com-
pliance
d) There is no difference between the two
Answer: b) HRM focuses on strategic employee development, while Personnel Man-
agement is task-oriented
Justification: HRM aligns with business strategy, emphasizing growth, while Per-
sonnel Management handles routine tasks.
3. What is the initial step in the recruitment process for a business?
a) Conducting interviews
b) Identifying staffing needs
c) Advertising vacancies
d) Onboarding new hires
Answer: b) Identifying staffing needs
1
, Justification: Recruitment starts by assessing business needs to ensure alignment
with strategic objectives.
4. Which tool is used in Human Resource Planning (HRP) to support business fore-
casting?
a) SWOT Analysis
b) Markov Analysis
c) PESTLE Analysis
d) Balanced Scorecard
Answer: b) Markov Analysis
Justification: Markov Analysis predicts workforce transitions (e.g., promotions,
turnover) to support business planning.
5. What characterizes training in a business setting?
a) Long-term career growth
b) Short-term skill enhancement for current roles
c) Strategic workforce forecasting
d) Employee retention planning
Answer: b) Short-term skill enhancement for current roles
Justification: Training improves immediate job performance, unlike development,
which prepares for future roles.
6. What is a challenge of individual performance-related pay (IPRP) in businesses?
a) Encourages teamwork
b) May lead to biased appraisals
c) Simplifies performance evaluation
d) Increases employee retention
Answer: b) May lead to biased appraisals
Justification: Subjective evaluations in IPRP can result in unfair rewards, impact-
ing morale.
7. Employee Involvement and Participation (EIP) in a business primarily enhances:
a) Payroll accuracy
b) Organizational innovation
c) Recruitment costs
d) Legal compliance
Answer: b) Organizational innovation
Justification: EIP fosters employee ideas, driving business innovation and compet-
itiveness.
8. Which of the following is an ethical issue in HRM within a business?
a) Offering competitive salaries
b) Discrimination in hiring practices
c) Providing training programs
d) Conducting performance appraisals
Answer: b) Discrimination in hiring practices
Justification: Unfair hiring violates ethical and legal standards, harming business
reputation.
9. How does globalization impact HRM in multinational businesses?
a) Reduces workforce diversity needs
2
