Chapter 1: The Rewards and Challenges of Human Resources Management
,Multiple-Choice Questions (60 Questions)
1. What is the primary focus of human resource management (HRM)?
A) Managing an organization's financial resources
B) Managing an organization's people practices to influence behavior, attitudes, and performance
C) Managing an organization's physical assets
D) Managing an organization's marketing strategies
Correct Answer: B
Rationale: Human resource management (HRM) consists of an organization's "people practices"—the
policies, practices, and systems that influence employees' behavior, attitudes, and performance.
2. Which of the following best defines human capital?
A) The physical assets owned by an organization
B) The financial resources available to an organization
C) The employees' knowledge, skills, abilities, and other attributes that have economic value
D) The technology used by an organization
Correct Answer: C
Rationale: Human capital refers to the employees' knowledge, skills, abilities, and other attributes
(KSAOs) that have economic value to the firm.
3. What is a sustainable competitive advantage?
A) An advantage that can be easily replicated by competitors
B) An advantage that is unique and cannot be easily duplicated
C) An advantage based solely on financial resources
D) An advantage that lasts only for a short period
Correct Answer: B
Rationale: A sustainable competitive advantage is something a firm does better than competitors that is
difficult to duplicate, and human resources can be a source of this advantage.
4. Which of the following is NOT one of the responsibilities of HR departments?
A) Recruitment and selection
B) Training and development
C) Financial auditing
D) Compensation and benefits
Correct Answer: C
Rationale: HR departments are responsible for recruitment, selection, training, development,
compensation, benefits, and other people-related functions—not financial auditing.
,5. What is the role of a line manager in HRM?
A) They have no involvement in HRM
B) They supervise the work of other employees and have responsibilities related to HR functions
C) They only focus on financial management
D) They only handle customer service
Correct Answer: B
Rationale: Line managers are non-HR managers who supervise the work of other employees and have
responsibilities related to all HR functions, including selecting, training, and appraising employees.
6. Which of the following is a common ethical issue in HRM?
A) Employee privacy
B) Marketing strategy
C) Product development
D) Financial forecasting
Correct Answer: A
Rationale: Ethical issues in HRM include employee privacy, protection of employee safety, and fairness
in employment practices.
7. What is corporate social responsibility?
A) Maximizing shareholder profits only
B) Acting in the best interests of people and communities affected by the organization's activities
C) Ignoring environmental concerns
D) Reducing employee benefits
Correct Answer: B
Rationale: Corporate social responsibility requires the organization to act in the best interests of the
people and communities affected by its activities.
8. What is evidence-based HR?
A) Making decisions based on intuition
B) Using data and research to inform HR decisions
C) Ignoring employee feedback
D) Following trends without analysis
Correct Answer: B
Rationale: Evidence-based HR involves using data, facts, and research to support HR decisions and
practices.
, 9. What is the primary purpose of an HRIS?
A) To replace HR professionals
B) To provide current and accurate HR-related data for control and decision-making
C) To manage financial accounts
D) To develop marketing campaigns
Correct Answer: B
Rationale: A Human Resource Information System (HRIS) provides current and accurate HR-related data
for purposes of control and decision-making.
10. Which of the following is a strategic challenge facing HRM today?
A) Decreasing globalization
B) Increasing competition and globalization
C) Reducing technology use
D) Decreasing workforce diversity
Correct Answer: B
Rationale: Strategic challenges such as globalization, competition, and sustainability efforts are
addressed by HRM.
11. What is downsizing?
A) The planned elimination of jobs
B) The expansion of the workforce
C) The hiring of new employees
D) The increase of employee benefits
Correct Answer: A
Rationale: Downsizing refers to the planned elimination of jobs within an organization.
12. What is furloughing?
A) Permanently laying off employees
B) Requiring employees to take time off with no pay or reduced pay
C) Hiring new employees
D) Promoting employees
Correct Answer: B
Rationale: Furloughing is the practice of requiring employees to take time off for either no pay or
reduced pay.