91. General Electric’s formula for acquisition success is E = Q x A. Which of the following statements is TRUE about this formula?
|a.||The success of the acquisition is a function of the quality of the surviving employees.|
|b.||The success of the acquisition is affected by the acceptance of the acquisition decision by the employees involved.|
|c.||The success of the acquisition is determined by the quantity of employees retained and the attitudes of the survivors.|
|d.||The success of the acquisition is a function of the employee productivity quotient multiplied by the adaptability of the survivors.|
92. As a senior member of the HR department at TransOceanic Industries, Abigail realizes that the firm’s upcoming merger with its main competitor will result in challenges in the year ahead. Abigail
|a.||recognizes that stability in HR activities will be critically important, especially in the area of compensation and benefits.|
|b.||realizes that many of the TransOceanic HR employees will become redundant.|
|c.||anticipates that the two HR departments will continue separate operations.|
|d.||there will be a reduction in voluntary turnover at executive levels as key employees engage in a power struggle.|
93. The main customers for HR services include all the following EXCEPT
94. Useful metrics have all the following characteristics EXCEPT
|a.||the measures provide subjective data.|
|b.||results can be compared both internally and externally.|
|c.||calculations can be clearly understood.|
|d.||measures are linked to strategic and operational objectives.|
95. All of the following are examples of HR metrics EXCEPT
|a.||retention rate of legal secretaries at a law firm.|
|b.||number of tax clients processed by tax preparers at an accounting firm.|
|c.||average time to fill teller positions at a bank.|
|d.||unemployment levels in the metropolitan area.|
96. There are eight employees in the accounts receivable department. Four employees work 40 hours a week, and the other four employees work 20 hours a week. How many FTEs are there in this department?
97. As director of HR for a large regional car dealership with 10 locations, Ed must calculate the potential return on investment (ROI) of implementing a new training program to improve car salespersons’ effectiveness in convincing new car buyers to finance the car through the dealership. In order to calculate the ROI of the new training program, he needs to collect all of the following data EXCEPT
|a.||the cost of developing and implementing the new training program.|
|b.||the dollar value of potential additional new car financing through the dealership in the year following the training program.|
|c.||the cost of alternative productivity-enhancing training programs for car salespersons.|
|d.||the costs of running update seminars on the new methods for salespersons for one year following the initial training.|
98. The return on investment calculation shows the value of expenditures for HR activities. It also shows
|a.||whether the HR department is effective in meeting organizational goals.|
|b.||the economic cost of HR to the firm.|
|c.||the value added per each HR staff member.|
|d.||how long it will take the HR activities to pay for themselves.|
99. The new CEO of the firm has told the vice president of HR that all HR activities must use the cost of capital as the benchmark against which their the returns from the activities are measured. The new CEO is implementing
|a.||economic value added (EVA).|
|b.||the balanced scorecard.|
|c.||subjective HR metrics.|
|d.||return on assets (ROA).|
100. Under the balanced scorecard approach, an organization’s performance is measured using all of the following categories EXCEPT the ____ perspective.
|b.||learning and growth|
|d.||internal business processes|
101. An example of an operational HR metric is
|a.||revenue generated per FTE.|
|b.||the ROI of human capital expenditures.|
|c.||benefits cost as a percentage of payroll.|
|d.||the ratio of managers to non-managers.|
102. Which of the following statements is TRUE?
|a.||Industries which have high median revenue per FTE also have high median income per FTE.|
|b.||The non-defense government sector has high median income per FTE compared with the private sector.|
|c.||Utilities have the highest median income per FTE of all industries.|
|d.||The revenue generated per FTE is a more important metric for analysis of HR effectiveness than is income generated per FTE.|
103. Which of the following statements isTRUE about the balanced scorecard approach to measurement of HR performance?
|a.||The balanced scorecard approach stresses the measurement of qualitative HR contributions rather than rather than tangible or financial contributions of HR.|
|b.||A major advantage of the balanced scorecard approach is the speed with which it can be implemented.|
|c.||The balanced scorecard approach eliminates most of the subjectivity involved in measuring the strategic performance of HR in an organization.|
|d.||The balanced scorecard helps an organization understand the cost/benefit payoffs of its HR activities.|
104. A(n) ____ is a formal research effort that evaluates the current state of HR management in an organization.
|b.||a benchmarking study.|
105. One approach to assessing HR effectiveness is ____, which compares specific measures of performance against data on those measures in other organizations.
|d.||the balanced scorecard|
1. It is critical that HR executives be included immediately after top management has made strategic decisions.
2. Only a minority of firms actually monitor statistics on effectiveness and productivity.
3. Companies that follow HR best practices, such as paying high wages and providing employment security, tend to have higher market value than firms who do not follow these practices.
4. An organization’s culture can be a source of competitive advantage.
5. A pharmaceutical sales representative’s unit labor costs could be calculated by the dollar value of his/her monthly sales orders less returns.
6. A company with high wages cannot be economically competitive.
7. High turnover of employees does not affect productivity if the overall quality of the employees remains the same.
8. The attention of U.S. businesses to customer service and quality in programs such as Total Quality Improvement has resulted in increased customer satisfaction with quality.
9. The HR department’s cost of processing each applicant for non-exempt openings is a measure of effectiveness.
10. Efficiency compares inputs and costs to outputs and benefits.
11. Legal restrictions prohibit European Union firms from moving production to less expensive countries.
12. U.S. companies can find employees in developing nations who are willing to work for significantly lower wages than U.S. employees.
13. An expansion of a U.S. firm into a European Union nation would involve only minor alterations in HR activities.
14. ModernMade Textiles has successfully used a piece-rate compensation plan in its U.S. plants for decades. The effect of compensation policies is similar from one culture to another, so this plan can be implemented in new plants ModernMade opens in other countries as long as it is adapted to the local currency and rates of pay.
15. In most organizations that do HR planning, the majority of the responsibility for this planning is given to the top HR executives and subordinate staff specialists.
16. An advantage of family-owned businesses is that succession planning is simple if the founder has children and/or grandchildren.
17. The strongest evidence of successful HR planning in an organization is if the human resources have been consistently aligned with the needs of the business over a period of time.
18. Judgmental techniques for forecasting the future need for human resources has been largely replaced by mathematical methods.
19. Because of the high degree of uncertainty in the environment, most HR planning experts recommend forecasting no more than three years into the future.
20. The estimated internal labor supply for a particular department is calculated by subtracting projected outflows from the department from the current staffing level and adding the projected inflows to the department.
21. The intention of the Worker Adjustment and Retraining Notification (WARN) Act is to give employees advance notice of an impending layoff.
22. Downsizing reduces costs in the short term but does not generate additional revenue for the organization.
23. An employer that lays off a long-term employee has no legal duty to provide severance pay.
24. A primary focus of mergers is cost savings through elimination of employees.
25. The success of acquisitions is determined by the savings in labor costs and other financial efficiencies, not by psychological or “soft” factors.
26. Despite all the focus on metrics, one should always remember that the HR function cannot be objectively quantified.
27. Typically, HR metrics have been focused on internal HR expenditures and effectiveness.
28. To be useful, HR metrics must be tied to financial performance, such as revenues or expenditures.
29. Revenue minus expenses divided by the number of FTEs gives the income generated per FTE.
30. The balanced scorecard is especially attractive as a measure of HR effectiveness, because the use of the four perspectives eliminates subjectivity in the process.
31. The cost per employee of HR staff declines as the size of the organization’s workforce increases.
32. Abbeyville Dairy does not have a formal HR professional. The top executives wish to identify problems the company may have with legal compliance and record keeping. It would be advisable for Abbeyville Dairy to conduct an HR audit.
1. Why is strategic HR management essential for organizational success?
2. What is environmental scanning? Why is it important? What information does it convey to the HR manager?
3. When a U.S. organization is planning to move beyond the import/export phase of international interaction, what are the main factors it must consider in order to be successful?
4. What strategies are available to an organization with a human resource surplus? What are the advantages and disadvantages of each?
5. What are HR metrics and why are they important to organizations? Give examples of HR metrics