Chapter 1—Changing Nature of Human Resource Management
MULTIPLE CHOICE
1. Human resource management is
a. supervising, monitoring, controlling, and disciplining employees in order to achieve
organizational goals.
b. the designing of organizational systems to ensure that human talent is used
effectively to accomplish organizational goals.
c. the use and coordination of human capital to ensure the profitability and survival of
the organization.
d. the design of the organization and its systems in order to achieve the goals of the
organization.
ANS: B PTS: 1 DIF: Easy REF: p. 4
OBJ: 1 NAT: AACSB Reflective Thinking LOC: HRM
TOP: Definitional
2. HR metrics must be linked to
a. statistical analyses.
b. industry outcomes.
c. business performance.
d. employee satisfaction.
ANS: C PTS: 1 DIF: Easy REF: p. 4
OBJ: 1 NAT: AACSB Reflective Thinking LOC: Creation of Value
TOP: Conceptual
3. All of the following are types of organizational assets EXCEPT
, a. social.
b. human.
c. financial.
d. intangible.
ANS: A PTS: 1 DIF: Easy REF: p. 4
OBJ: 1 NAT: AACSB Reflective Thinking LOC: Creation of Value
TOP: Conceptual
4. Which of the following statements is TRUE?
a. Because of the higher quality of Western European education, the return on human
capital for European firms is higher than the return on human capital for U.S. firms.
b. Companies that spend more than 60% of total operating costs on employee costs
have poor returns on investment in their human capital.
c. U.S. firms spend nearly twice as much as European firms on employee salaries and
benefits, but U.S. firms experience higher levels of return on investment for their
human capital.
d. Human capital is the collective value of capabilities, knowledge, skills, life
experiences and motivation of an organizational workforce. Being intangible, it is
difficult to measure the effect of human capital on shareholder value.
ANS: C PTS: 1 DIF: Moderate REF: p. 5
OBJ: 1 NAT: AACSB Reflective Thinking LOC: Creation of Value
TOP: Conceptual
5. In a university, the assets that allow all the other assets of the school to be used to offer
educational services to its students are the university’s
a. financial endowment and income.
b. physical plant such as libraries, laboratories and technological learning facilities.
c. administrators, professors, and other employees.
, d. intangible assets such as its unique operating processes and specialized research
capabilities.
ANS: C PTS: 1 DIF: Moderate REF: p. 5
OBJ: 1 NAT: AACSB Analytic LOC: Creation of Value
TOP: Application
6. The Chief Financial Officer of McGill Tubing wants to learn the contribution of McGill’s
workforce toward creating value for shareholders. An analysis which would provide this
information is the calculation of
a. the human capital revenue stream.
b. marginal revenue generated per employee.
c. return on human capital investment.
d. profit per employee.
ANS: C PTS: 1 DIF: Challenging REF: p. 5
OBJ: 1 NAT: AACSB Analytic LOC: Creation of Value
TOP: Application
7. Through ____ HR management provides the organization with a sufficient supply of qualified
individuals to fill the jobs in the organization.
a. staffing
b. affirmative action
c. talent management
d. performance management
ANS: A PTS: 1 DIF: Easy REF: p. 5
OBJ: 2 NAT: AACSB Reflective Thinking LOC: HRM
TOP: Definitional
, 8. Tyrone Toys is intensely focused on reducing labor costs. During the executive committee’s
discussion of closing its unionized plant in Ohio and opening a non-union plant in
Mississippi, the executive vice president of HR suggests that the committee get legal advice
in case Tyrone Toys would be subject to lawsuits by the union. This interaction suggests
that
a. HR is not a strategic partner in this firm because the EVP of HR is reacting to another
committee member’s suggestion, not proactively making his own suggestion.
b. HR is not a strategic partner in the firm because any suggestion about closing a plant
should properly come from HR, not another executive.
c. HR is a strategic partner in the firm because in this firm the EVP of HR is allowed to
sit in on important strategic meetings.
d. HR is a strategic partner in the firm because the EVP of HR a permanent member of
the executive committee.
ANS: D PTS: 1 DIF: Challenging REF: p. 6
OBJ: 3 NAT: AACSB Analytic LOC: Strategy
TOP: Application
9. Henry, the production manager for a chemical plant, resents what he feels are unwarranted
intrusions into his territory by HR managers. Henry feels that his relationships with his
employees are strong and supportive, and that HR initiatives generally cause unnecessary
trouble and complications.
a. Henry is correct, because the HR function is a support and staff function and should
not intrude on day-to-day management functions.
b. HR managers have the sole responsibility for the proper implementation of company
policy regarding employees. Henry is subverting this process.
c. Henry is probably committing major violations of company policy and wants to keep
this secret from HR management.
d. Henry would be surprised to learn that every manager, including him, is an HR
manager.
ANS: D PTS: 1 DIF: Moderate REF: p. 6
MULTIPLE CHOICE
1. Human resource management is
a. supervising, monitoring, controlling, and disciplining employees in order to achieve
organizational goals.
b. the designing of organizational systems to ensure that human talent is used
effectively to accomplish organizational goals.
c. the use and coordination of human capital to ensure the profitability and survival of
the organization.
d. the design of the organization and its systems in order to achieve the goals of the
organization.
ANS: B PTS: 1 DIF: Easy REF: p. 4
OBJ: 1 NAT: AACSB Reflective Thinking LOC: HRM
TOP: Definitional
2. HR metrics must be linked to
a. statistical analyses.
b. industry outcomes.
c. business performance.
d. employee satisfaction.
ANS: C PTS: 1 DIF: Easy REF: p. 4
OBJ: 1 NAT: AACSB Reflective Thinking LOC: Creation of Value
TOP: Conceptual
3. All of the following are types of organizational assets EXCEPT
, a. social.
b. human.
c. financial.
d. intangible.
ANS: A PTS: 1 DIF: Easy REF: p. 4
OBJ: 1 NAT: AACSB Reflective Thinking LOC: Creation of Value
TOP: Conceptual
4. Which of the following statements is TRUE?
a. Because of the higher quality of Western European education, the return on human
capital for European firms is higher than the return on human capital for U.S. firms.
b. Companies that spend more than 60% of total operating costs on employee costs
have poor returns on investment in their human capital.
c. U.S. firms spend nearly twice as much as European firms on employee salaries and
benefits, but U.S. firms experience higher levels of return on investment for their
human capital.
d. Human capital is the collective value of capabilities, knowledge, skills, life
experiences and motivation of an organizational workforce. Being intangible, it is
difficult to measure the effect of human capital on shareholder value.
ANS: C PTS: 1 DIF: Moderate REF: p. 5
OBJ: 1 NAT: AACSB Reflective Thinking LOC: Creation of Value
TOP: Conceptual
5. In a university, the assets that allow all the other assets of the school to be used to offer
educational services to its students are the university’s
a. financial endowment and income.
b. physical plant such as libraries, laboratories and technological learning facilities.
c. administrators, professors, and other employees.
, d. intangible assets such as its unique operating processes and specialized research
capabilities.
ANS: C PTS: 1 DIF: Moderate REF: p. 5
OBJ: 1 NAT: AACSB Analytic LOC: Creation of Value
TOP: Application
6. The Chief Financial Officer of McGill Tubing wants to learn the contribution of McGill’s
workforce toward creating value for shareholders. An analysis which would provide this
information is the calculation of
a. the human capital revenue stream.
b. marginal revenue generated per employee.
c. return on human capital investment.
d. profit per employee.
ANS: C PTS: 1 DIF: Challenging REF: p. 5
OBJ: 1 NAT: AACSB Analytic LOC: Creation of Value
TOP: Application
7. Through ____ HR management provides the organization with a sufficient supply of qualified
individuals to fill the jobs in the organization.
a. staffing
b. affirmative action
c. talent management
d. performance management
ANS: A PTS: 1 DIF: Easy REF: p. 5
OBJ: 2 NAT: AACSB Reflective Thinking LOC: HRM
TOP: Definitional
, 8. Tyrone Toys is intensely focused on reducing labor costs. During the executive committee’s
discussion of closing its unionized plant in Ohio and opening a non-union plant in
Mississippi, the executive vice president of HR suggests that the committee get legal advice
in case Tyrone Toys would be subject to lawsuits by the union. This interaction suggests
that
a. HR is not a strategic partner in this firm because the EVP of HR is reacting to another
committee member’s suggestion, not proactively making his own suggestion.
b. HR is not a strategic partner in the firm because any suggestion about closing a plant
should properly come from HR, not another executive.
c. HR is a strategic partner in the firm because in this firm the EVP of HR is allowed to
sit in on important strategic meetings.
d. HR is a strategic partner in the firm because the EVP of HR a permanent member of
the executive committee.
ANS: D PTS: 1 DIF: Challenging REF: p. 6
OBJ: 3 NAT: AACSB Analytic LOC: Strategy
TOP: Application
9. Henry, the production manager for a chemical plant, resents what he feels are unwarranted
intrusions into his territory by HR managers. Henry feels that his relationships with his
employees are strong and supportive, and that HR initiatives generally cause unnecessary
trouble and complications.
a. Henry is correct, because the HR function is a support and staff function and should
not intrude on day-to-day management functions.
b. HR managers have the sole responsibility for the proper implementation of company
policy regarding employees. Henry is subverting this process.
c. Henry is probably committing major violations of company policy and wants to keep
this secret from HR management.
d. Henry would be surprised to learn that every manager, including him, is an HR
manager.
ANS: D PTS: 1 DIF: Moderate REF: p. 6
