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Chapter 16
<Strategically Managing the HRM Function>
True / False Questions
1. | Transactional HRM activities provide the greatest strategic value to a firm. True False |
2. | Employee relations are part of traditional HRM activities. True False |
3. | A new trend that is consistent with the total quality management philosophy is HR executives moving to a customer-oriented approach while implementing the function. True False |
4. | The basic process of building HR strategy starts with scanning the internal environment. True False |
5. | "Business-linked" HR functions begin with identifying major people outcomes. True False |
6. | The analytic approach to evaluating HR effectiveness focuses exclusively on reviewing the various outcomes of the HRM functional areas. True False |
7. | The human resource accounting approach places a dollar value on human resources as if they were physical or financial resources. True False |
8. | Attempting to estimate the financial impact of substance abuse is an example of human resource accounting. True False |
9. | In a generic structure, the HRM function effectively consists of three divisions: the centers for expertise, the field generalists, and the service center. True False |
10. | In strategically designed HR structures, centers for expertise ensure that transactional activities are delivered throughout the organization. True False |
11. | Ensuring that the HRM systems enable the business to execute its strategy is one of the responsibilities of field generalists. True False |
12. | Service centers often leverage information technology to efficiently deliver employee services. True False |
13. | Redesigning the HRM process represents the internal approach to improving HRM effectiveness. True False |
14. | Lack of expertise among outsourced providers is a reason for declining levels of outsourcing in the last couple of years. True False |
15. | One of the main disadvantages of outsourced providers is their inability to learn unique innovations from one company and transfer them to another company. True False |
16. | Information technology applications are a prerequisite for HRM process redesign. True False |
17. | Applying new technology to an inefficient process will improve efficiency or effectiveness. True False |
18. | Reengineering cannot be used to review specific HRM practices such as work design or the performance management system. True False |
19. | A payroll check is issued based on a payment voucher that is generated from the general accounting ledger. True False |
20. | As part of the reengineering process, companies expand a redesigned process to the entire organization without testing it in a controlled setting. True False |
21. | New technologies are current applications of knowledge, procedures, and equipment that have not been used previously. True False |
22. | Decision support systems are designed to help employees solve problems by themselves. True False |
23. | E-HRM capabilities have allowed the focus of HRM functions to move from transactional to transformational concerns and activities. True False |
24. | The role of a strategic advisor of a chief human resource officer (CHRO) entails sharing the people expertise as part of the decision-making process. True False |
25. | Activities focused on identifying workforce morale issues pertain to the role of a chief human resource officer (CHRO) being the leader of the HR function. True False |
Multiple Choice Questions
26. | Which of the following HRM activities adds the lowest strategic value to a firm?
A. | Benefits administration |
B. | Performance management |
C. | Training and recruitment |
E. | Management development |
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27. | _____ activities of HRM have the lowest strategic value in a firm.
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28. | Which of the following HRM activities adds the highest strategic value to a firm?
A. | Benefits administration |
C. | Training and recruitment |
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29. | Lucas, an HR executive, is responsible for the transactional HRM activities at Coldstore Inc. If he is the sole HR person handling transactional HR activities, which of the following is most likely his responsibility?
D. | Performance management |
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30. | Mel heads a team within the HR department that is responsible for the traditional HRM activities. Which of the following activities is Mel likely to be overseeing?
D. | Benefits administration |
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31. | Which of the following strategies includes activities such as selection and compensation?
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32. | For an HRM function to become truly strategic in its orientation, it must
A. | not view itself as a separate business entity. |
B. | base its strategies on serving external clients. |
C. | focus on process-oriented rather than people-oriented concerns. |
D. | adopt a customer-oriented approach. |
E. | spend most of its time and efforts on transactional activities. |
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33. | The first step toward customer orientation is
A. | identifying the needs of customers. |
B. | identifying the HRM functions required for customer orientation. |
C. | developing technologies that serve customers. |
D. | creating strategies that serve customers. |
E. | identifying the customers. |
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34. | Which of the following meet the needs of both the line managers and the employees by giving employees opportunities to ensure that they increase their human capital, thus providing increased value to the company?
B. | Training and development systems |
C. | Management development systems |
E. | Administrative systems |
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35. | _____ systems provide employees with an equitable return for their investment of skills and effort.
B. | Training and development |
C. | Performance management |
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36. | Which of the following stages involves identifying an increasing immigrant population in a basic HR strategy process?
A. | Identifying people issues |
B. | Scanning the external environment |
C. | Developing the HR strategy |
D. | Identifying strategic business issues |
E. | Communicating the HR strategy |
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37. | Examining the need to develop new technologies is part of
A. | identifying people issues. |
B. | scanning the external environment. |
C. | developing the HR strategy. |
D. | identifying strategic business issues. |
E. | communicating the HR strategy. |
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38. | Since the HR strategy seeks to address business issues, involving _____ can increase the quality of information from which the HR strategy is created.
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39. | _____ functions' articulation of people outcomes stems from an analysis of what their functions currently do.
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40. | _____ functions have been clearly identified and articulated, and they have aligned their HR activities around people issues and outcomes, but not business issues and outcomes.
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41. | _____ functions begin with an assessment of what HR is doing and then identifying the major people outcomes they should focus on.
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42. | Which HR strategy begins by identifying the major business needs and issues, considers how people fit in and what people outcomes are necessary, and builds HR systems focused on meeting those needs?
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43. | Which of the following is true of the audit approach?
A. | It typically collects key indicators and customer satisfaction measures. |
B. | It primarily deals with the determination of the dollar value of a function. |
C. | It involves the use of statistics and finance and hence is more demanding than the analytic approach. |
D. | It uses utility analysis to estimate the financial impact of employee behavior. |
E. | It focuses on the processes involved in the HRM functional areas rather than the outcomes. |
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44. | The audit approach to evaluating the effectiveness of HR practices focuses on
A. | using analytical data to increase organizational effectiveness. |
B. | estimating the costs and benefits resulting from an HR practice. |
C. | reviewing the various outcomes of the HR functional area. |
D. | determining the dollar value of a program. |
E. | using utility analysis to estimate the financial impact of employee behavior. |
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45. | Minority turnover rate is a key indicator of the _____ function of HRM.
C. | equal employment opportunity |
D. | employee appraisal and development |
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46. | Ratio of promotions to number of employees is a key indicator of the _____ function of HRM.
C. | equal employment opportunity |
D. | employee appraisal and development |
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47. | Assistance provided to line managers in handling grievances is a customer satisfaction measure used in the _____ function of HRM.
C. | equal employment opportunity |
D. | employee appraisal and development |
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48. | Which of the following approaches focuses on determining whether the introduction of a program or practice has the intended effect?
C. | Balance-sheet approach |
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49. | The _____ approach attempts to place a dollar value on human resources as if they were physical resources.
A. | performance management |
B. | human resource accounting |
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50. | The cost-benefit analysis approach that estimates the financial impact of employee behavior such as absenteeism is called _____.
B. | the valuation approach |
C. | human resource accounting |
E. | returns on employee investment |
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51. | Which of the following is human resource accounting likely to include?
C. | Capitalization of salary |
D. | The impact of positive employee attitude |
E. | Gains from selection programs |
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52. | Fouad works at Ante Inc. He is responsible for conducting cost-benefit analyses of different functions performed at Ante. If Fouad’s current task is to conduct a utility analysis, which of the following factors is he likely to asses through it?
A. | Capitalization of salary |
B. | Gains from selection programs |
C. | Returns on human assets |
D. | Net present value of expected wage payments |
E. | Level of job satisfaction among senior employees |
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53. | Which of the following is true about improving HRM effectiveness?
A. | Improvement often focuses on the effectiveness of each activity rather than on its efficiency. |
B. | There is often a push to eliminate the transformational work to free up time for transactional work. |
C. | Redesigning the structure focuses on information technology rather than reporting relationships. |
D. | Ways to improve effectiveness should be identified much before the strategic direction is established. |
E. | Focusing more on transformational work is likely to result in higher strategic value to the firm. |
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54. | Which of the following represents a traditional structure of HRM function?
A. | Functional directors reporting to the VP of HRM |
B. | Functional specialists acting as consultants in the development of systems |
C. | HRM generalists with dual reporting relationships |
D. | Individuals leveraging information technology |
E. | Generalists taking responsibility for helping line executives |
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55. | A _____ consists of functional specialists in the traditional areas of HRM such as recruitment and selection.
B. | field generalist center |
E. | business unit–wide center |
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56. | Trayvon, an HR personnel at Wood Inc., is a functional specialist dealing with compensation. He also works as a consultant in the development of systems and processes to be used at Wood. If Wood follows the recent generic structure of HRM function, Trayvon is likely to be part of a _____.
B. | field generalist center |
E. | business unit–wide center |
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57. | Which of the following represents the recent generic structure of HRM function?
A. | The VP of HRM reporting to the VP of finance and administration |
B. | Functions structured around labor relations |
C. | Functional directors reporting to the VP of HRM |
D. | Functions structured around staffing and appraisal |
E. | HRM generalists with dual reporting relationships |
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58. | Which of the following is true of field generalists within the recent generic HR structure?
A. | They are responsible for helping line executives strategically address people issues. |
B. | They are responsible for the traditional areas of HR. |
C. | They are responsible for the transactional HR activities. |
D. | They act as consultants in the development of state-of-the-art HR systems. |
E. | They often leverage information technology to efficiently deliver employee services. |
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59. | Maria works in the HR department at Cloud Zero Inc. She is responsible for helping the line executives strategically address people issues. She has a dual reporting relationship with Jose, the head of HRM, and Gigi, the head of the line business. Maria is likely to be
A. | part of the center of expertise. |
C. | part of the service center. |
D. | part of the transactional center. |
E. | a functional specialist. |
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60. | Which of the following is true about the employees of the service center within the recent generic HR structure?
A. | They have dual reporting relationships to both the head of the line business and the head of HR. |
B. | They are responsible for the traditional areas of HR, such as recruitment, selection, training, and compensation. |
C. | They consist of individuals who ensure that the transactional activities are delivered throughout the organization. |
D. | They act as consultants in the development of state-of-the-art HR systems and processes for use in the organization. |
E. | They focus on ensuring that the HRM systems enable the business to execute its strategy. |
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61. | The _____ consists of individuals who often leverage information technology to efficiently deliver employee services.
A. | field generalists' center |
B. | functional specialists' center |
E. | labor relations center |
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62. | The generic structure of HRM functions is likely to result in
A. | functional specialists being distracted by transactional activities. |
B. | generalists focusing more on maintaining functional specializations. |
C. | service centers focusing on efficient delivery of basic services across units. |
D. | nondual reporting relationships among field generalists and HRM/line heads. |
E. | the responsibility of leveraging information technology shifting to functional specialists. |
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63. | _____ involves contracting with an outside domestic vendor to provide a product or service to a firm, as opposed to producing the product using employees within the firm.
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64. | A firm is most likely to outsource services when
A. | the cost of production is cheaper when done onshore. |
B. | the labor costs are high in the country where the outsourcing partner is. |
C. | the human capital is low in the country where the outsourcing partner is. |
D. | the effectiveness of services produced internally is less than that produced offshore. |
E. | the goods produced onshore are of better quality than those produced offshore. |
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65. | The most likely activities to be outsourced include _____ activities.
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66. | A review of critical work processes and redesign to make them more efficient and able to deliver higher quality are called _____.
A. | transaction processing |
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67. | Which of the following is true about the reengineering process?
A. | Information technology applications are mandatory for process redesign. |
B. | Reengineering cannot be used to review HRM department functions. |
C. | Applying new technology to an inefficient process will improve effectiveness. |
D. | Reengineering cannot be used to review a performance management system. |
E. | Product or service cost will increase if new technology is applied to an inefficient process. |
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68. | Which of the following is the initial step in the reengineering process?
A. | Interpreting the process |
C. | Implementing the process |
D. | Redesigning the process |
E. | Identifying the process |
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69. | Which of the following corresponds to identifying the process stage of the reengineering process?
A. | Considering whether jobs can be combined |
B. | Developing models and choosing prototypes |
C. | Asking process owners to be part of the team |
D. | Considering the exceptions to be dealt with |
E. | Considering if all the steps in the process are necessary |
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70. | Which of the following corresponds to the stage of understanding the process during reengineering?
A. | Considering whether jobs can be combined |
B. | Developing models and choosing prototypes |
C. | Asking process owners to be part of the team |
D. | Including customers who see the outcome of the process as team members |
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71. | Analyzing data redundancy, special cases, and exceptions is part of _____ the process during reengineering.
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72. | Which of the following steps in reengineering involves conducting surveys?
A. | Identifying the process |
B. | Understanding the process |
C. | Redesigning the process |
D. | Implementing the process |
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73. | _____ show the types of information used within a business function and the association among the different types of information.
D. | Data-entity relationship diagrams |
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74. | Which of the following is true of cost-benefit analysis?
A. | It evaluates the design of data structure and content. |
B. | It is a review of how soon the system of software application will become outdated. |
C. | It shows the flow of data between departments. |
D. | It compares the expense of completing a task with and without an automated system. |
E. | It evaluates the frequency and criticality of automating specific tasks within a functional area. |
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75. | Which of the following steps in reengineering involves trying out the process by testing it in a limited, controlled setting?
A. | Identifying the process |
B. | Understanding the process |
C. | Redesigning the process |
D. | Implementing the process |
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76. | _____ are problem-solving systems, which usually include a "what-if" feature that allows users to see how outcomes change when assumptions or data change.
B. | Decision support systems |
D. | Client service systems |
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77. | _____ is a computer system incorporating the decision rules of people deemed to have specialized knowledge in a certain area.
B. | A decision support system |
D. | A client service system |
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78. | Technology has freed HR managers from day-to-day activities to focus more on _____ activities.
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79. | Knowing the company's strategic plan and understanding the company's financial capabilities is part of the _____ competence required by HR professionals.
A. | professional-technical knowledge |
B. | management of change processes |
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80. | Up-to-date knowledge on new selection techniques, performance appraisal methods, training programs, and incentive plans is part of the _____ competence required by HR professionals.
A. | professional-technical knowledge |
B. | management of change processes |
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81. | Diagnosing problems and evaluating results are part of the _____ competence required by HR professionals.
A. | professional-technical knowledge |
B. | management of change processes |
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82. | Which of the following competencies of HR professionals requires a generalist perspective, although specialist knowledge is necessary, in making decisions?
A. | Professional-technical knowledge |
B. | Management of change processes |
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83. | Which of the following represents the role of a strategic advisor played by a chief human resource officer (CHRO)?
A. | Sharing the people expertise as part of the decision-making process |
B. | Helping the executive team see the importance of talent |
C. | Identifying present and future talent gaps and coming to own the talent agenda |
D. | Meeting with direct reports to provide guidance and check on progress |
E. | Ensuring that the HR function aligns its activities toward the needs of the business |
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84. | A role of the chief human resource officer (CHRO) that focuses on resolving interpersonal or political conflicts among team members is that of a _____.
E. | representative of the firm |
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85. | Mei works as chief human resource officer (CHRO) for an IT firm. When she takes up the function of performance and behavioral counseling, she is playing the role of a _____.
E. | representative of the firm |
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86. | The _____ is the role of a chief human resource officer (CHRO) that focuses on working with HR team members regarding the development, design, and delivery of HR services.
A. | leader of the HR function |
B. | HR representative of the firm |
C. | strategic HR advisor for the board |
E. | talent architect of HR |
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87. | Chris is the chief human resource officer (CHRO) of ProPel Inc. In performing the tasks of aligning the HR activities with the needs of the business, Chris is performing the role of a(n) _____.
B. | HR representative of the firm |
C. | strategic HR advisor for the board |
D. | leader of the HR function |
E. | talent architect of HR |
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88. | Which of the following roles of a chief human resource officer (CHRO) entails discussions on executive compensation and CEO performance?
A. | Leader of the HR function |
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89. | Which of the following roles of a chief human resource officer (CHRO) deals with identifying the morale or motivational issues with the employees?
A. | Leader of the HR function |
B. | Representative of the firm |
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90. | Raulena, an HR manager at Dock Inc., has been promoted as the chief human resource officer (CHRO). When she engages in discussions on the performance of members of the executive leadership team, she is playing the role of a _____.
A. | representative of the firm |
C. | leader of the HR function |
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Essay Questions
91. | Discuss the three categories of HRM activities in terms of their strategic value to a firm.
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92. | Identify the steps involved in the basic process of building an HR strategy.
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93. | The variety of ways in which HR strategies can be generated results in various levels of linkage with the business. Discuss the four categories of this relationship.
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94. | Discuss the audit and analytic approaches to evaluating the effectiveness of HRM practices.
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95. | Explain how HRM functions are divided in firms that follow the recent generic structure of HRM.
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96. | Discuss how outsourcing is being used to increase the effectiveness of HR.
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97. | Discuss the steps involved in the reengineering process.
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98. | Discuss the three broad functions that technology has been used for in HRM.
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99. | Discuss the four competencies that HR professionals require to become partners in the strategic management process.
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100. | List the roles of a chief human resource officer (CHRO).
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