Human Resource Management (HRM) Practice Q&A – Exam
Questions and Solutions
For Business Management Students
Date: June 10, 2025
Instructions
This Q&A practice set prepares Business Management students for HRM final exams,
covering recruitment, training and development, performance management, compensa-
tion, employee relations, strategic HRM, DEI, globalization, HR analytics, AI in HR,
hybrid work models, and ESG initiatives. It 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. Calcula-
tors are not permitted. Answers should be clear, concise, and include business-relevant
examples where required.
1 1. Multiple-Choice Questions (48 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 objective of HRM in a business organization?
a) Increase employee turnover
b) Align human resources with business strategy
c) Focus solely on administrative tasks
d) Eliminate training programs
Answer: b) Align human resources with business strategy
Justification: HRM ensures employees drive business goals, enhancing organiza-
tional 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
Answer: b) HRM focuses on strategic employee development, while Personnel Man-
agement is task-oriented
Justification: HRM aligns with business strategy, while Personnel Management
focuses on routine tasks.
3. What is the first 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 begins by assessing business needs to align with strategic
goals.
4. Which tool is used in Human Resource Planning (HRP) to forecast workforce tran-
sitions?
a) SWOT Analysis
b) Markov Analysis
c) PESTLE Analysis
d) Balanced Scorecard
Answer: b) Markov Analysis
Justification: Markov Analysis predicts employee movements (e.g., promotions,
turnover) using probability.
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
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 cause unfair rewards, reducing
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.
8. Which is an ethical issue in business HRM?
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 reputation.
9. How does globalization impact HRM in multinational businesses?
a) Reduces workforce diversity needs
b) Increases complexity in managing diverse workforces
c) Eliminates training requirements
2
Questions and Solutions
For Business Management Students
Date: June 10, 2025
Instructions
This Q&A practice set prepares Business Management students for HRM final exams,
covering recruitment, training and development, performance management, compensa-
tion, employee relations, strategic HRM, DEI, globalization, HR analytics, AI in HR,
hybrid work models, and ESG initiatives. It 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. Calcula-
tors are not permitted. Answers should be clear, concise, and include business-relevant
examples where required.
1 1. Multiple-Choice Questions (48 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 objective of HRM in a business organization?
a) Increase employee turnover
b) Align human resources with business strategy
c) Focus solely on administrative tasks
d) Eliminate training programs
Answer: b) Align human resources with business strategy
Justification: HRM ensures employees drive business goals, enhancing organiza-
tional 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
Answer: b) HRM focuses on strategic employee development, while Personnel Man-
agement is task-oriented
Justification: HRM aligns with business strategy, while Personnel Management
focuses on routine tasks.
3. What is the first 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 begins by assessing business needs to align with strategic
goals.
4. Which tool is used in Human Resource Planning (HRP) to forecast workforce tran-
sitions?
a) SWOT Analysis
b) Markov Analysis
c) PESTLE Analysis
d) Balanced Scorecard
Answer: b) Markov Analysis
Justification: Markov Analysis predicts employee movements (e.g., promotions,
turnover) using probability.
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
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 cause unfair rewards, reducing
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.
8. Which is an ethical issue in business HRM?
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 reputation.
9. How does globalization impact HRM in multinational businesses?
a) Reduces workforce diversity needs
b) Increases complexity in managing diverse workforces
c) Eliminates training requirements
2
