Chapter 1: Human Resource Management and Competitive Advantage
TRUE/FALSE
1.Demand and supply forecasting is a process that helps human resource planners estimate the number and type of employees needed to carry out an organization’s strategic plan.
ANS:T
Generally recognized component of the human resource planning process.
PTS:1DIF:EasyREF:1-1a
2.Human resource demand and supply forecasting facilitates an organization’s efforts to fill positions in high demand.
ANS:T
HR demand and supply forecasting information enables a firm to plan its recruitment, selection, and training strategies.
PTS:1DIF:ModerateREF:1-1a
3.A selection process need not be technically sound to be effective.
ANS:F
If a selection process is not technically sound, it will not be accurate and may lead to unnecessary litigation.
PTS:1DIF:ModerateREF:1-1b
4.The aim of an organization’s recruitment practices is to identify a suitable pool of applicants quickly, cost effectively, and legally.
ANS:T
These are generally accepted objectives of organizations’ recruitment practices.
PTS:1DIF:EasyREF:1-1b
5.Development is a planned learning experience that only focuses on teaching workers how to perform their current jobs more effectively.
ANS:F
Development prepares employees for future jobs.
PTS:1DIF:EasyREF:1-1c
6.Productivity improvement programs are designed to tie job behaviors to rewards.
ANS:T
Aim of such programs is to motivate employees to engage in appropriate job behaviors.
PTS:1DIF:ModerateREF:1-1c
7.The objective of compensation practices is to help the organization establish and maintain a competent and loyal workforce at any cost.
ANS:F
The aim of compensation practices is to help the organization maintain a competent and loyal workforce at an affordable cost.
PTS:1DIF:ModerateREF:1-1c
8.Managers that make employment selection decisions in an arbitrary fashion are decreasing their firm’s exposure to discrimination-related lawsuits.
ANS:F
Firms that use an arbitrary decision process with respect to selection are increasing their firm’s exposure to discrimination-related lawsuits.
PTS:1DIF:ModerateREF:1-1d
9.The enactment of federal, state, and local laws that regulate workplace behavior have not radically changed most human resource management practices during the last 40 years.
ANS:F
The passage of such laws has had a dramatic impact on virtually every HRM practice over the last 40 years.
PTS:1DIF:ModerateREF:1-1d
10.An expanding cultural diversity at the workplace has no influence on HRM practices.
ANS:F
Various social, economic, and technological events strongly influence HRM practices.
PTS:1DIF:ModerateREF:1-1d
11.In smaller companies, line managers assume a larger role in effective human resource management practices.
ANS:T
This is true because smaller firms cannot afford to create and maintain an HR department.
PTS:1DIF:EasyREF:1-2
12.Part of the human resource professional’s role is to monitor and evaluate an organization’s human resource management practices.
ANS:T
This is how the HR professional ensures that the HRM practices are properly implemented.
PTS:1DIF:EasyREF:1-2a
13.Advising and assisting line managers on human resource management matters is often considered the most important role played by HR professionals.
ANS:T
HR professionals consult on an array of HRM-related topics such as providing formal training programs and advice about specific HRM-related concerns among others.
PTS:1DIF:ModerateREF:1-2a
14.The development of human resource management procedures and methods usually does not require inputs from line managers.
ANS:F
Without input from line managers, HR practitioners will not have a clear idea of what is needed and whether or not practices are effective.
PTS:1DIF:ModerateREF:1-2b
15.Firms can gain a competitive advantage over competitors by effectively managing their human resources.
ANS:T
Various HRM practices help a firm gain such an advantage.
PTS:1DIF:EasyREF:1-3
16.A firm pursuing a product differentiation strategy is attempting to promote the same services or products as competitors, but at a lower cost.
ANS:F
This is generally the objective of a cost leadership strategy.
PTS:1DIF:ModerateREF:1-3c
17.Product differentiation will create a competitive advantage if the firm’s customers are willing to pay enough to cover extra production costs.
ANS:T
Product differentiation occurs when a firm produces a product or service that is preferred by buyers.
PTS:1DIF:ModerateREF:1-3c
18.Research indicates that investment in human resources can help a firm develop a competitive advantage.
ANS:T
A growing body of research-based evidence indicates that a firm’s HRM practices can have a rather strong impact on competitive advantage.
PTS:1DIF:ModerateREF:1-4a
19.Employees who are committed to their organization tend to be very loyal towards them.
ANS:T
Organizational commitment refers to the psychological attachment to, identification with, and involvement in the organization.
PTS:1DIF:EasyREF:1-4b
20.Performance appraisal systems that are too subjective and not documented tend to promote feelings of unfairness.
ANS:T
Overly subjective performance appraisal systems can create uncertainty within employees and are subject to greater errors that may promote perceptions of unfairness on the part of those being appraised.
PTS:1DIF:ModerateREF:1-4b
21.Employees who are satisfied and committed to their jobs are less likely to spread the word that their company is a good place to work.
ANS:F
Employees who are satisfied and committed to their jobs are likely to spread the word that their company is a good place to work.
PTS:1DIF:ModerateREF:1-4b
22.In organizations where supervisors play favorites, the employees are more likely to initiate human resource management-related lawsuits.
ANS:T
Supervisors who play favorites may cause other employees to develop perceptions of unfair treatment; thus lawsuits are initiated to overcome the feelings associated with perceived inequity.
PTS:1DIF:DifficultREF:1-4b
23.Good organization citizens tend to go out of their way to help co-workers with job-related activities.
ANS:T
One of the behaviors identified in the text associated with organizational citizenship.
PTS:1DIF:EasyREF:1-4b
24.A study conducted by Sears indicated a strong relationship between improved human resource management practices, employee satisfaction, and customer satisfaction.
ANS:T
The results of a study conducted by Sears showed that when Sears improved its HRM practices, employee satisfaction and customer satisfaction both rose.
PTS:1DIF:ModerateREF:1-4b
25.Recent studies have shown little connection between workers’ job satisfaction and their intentions to stay with their organization.
ANS:F
Recent studies have found that factors associated with job satisfaction are among the most important factors driving employee retention.
PTS:1DIF:ModerateREF:1-4b
26.The occurrence of employee-centered outcomes can increase the likelihood of human resource management-related lawsuits.
ANS:F
Focus on employee-centered outcomes can increase employee commitment to the present employer and more likely reduce the likelihood of HRM-related lawsuits.
PTS:1DIF:ModerateREF:1-4b
27.One of the most common ways of cutting human resource management costs is to employ technology to replace some of the more expensive HR professional-delivered services.
ANS:T
Example includes reducing annual printing costs by putting employee handbooks online and also allowing employees online access to personnel information.
PTS:1DIF:ModerateREF:1-4b
28.The ability to minimize turnover rates does not enhance cost leadership strategy.
ANS:F
If turnover rates can be reduced, costs associated with recruiting and training can be cut.
PTS:1DIF:ModerateREF:1-4b
29.Recent research has confirmed an insignificant relationship between customer retention and employee turnover.
ANS:F
Firms that do a good job of retaining employees can often reap an additional benefit—better customer retention. This notion was confirmed in a study of 17 insurance companies that compared the customer retention rates of companies with low and high employee turnover. Firms with low turnover retained 10 percent more of their customers.
PTS:1DIF:ModerateREF:1-4b
30.An organization’s competitive advantage achieved through human resource management practices is likely to be more sustainable than one achieved by other means.
ANS:T
The statement is true because competitors rarely have access to a firm’s HRM practices and these practices are not very visible to outsiders and, thus, cannot be easily imitated.
PTS:1DIF:ModerateREF:1-4c
MULTIPLE CHOICE
1.The text defines _____ as practices that help the organization deal effectively with its people during various phases of the employment cycle: preselection, selection, and postselection.
a. / human capitalb. / human resource management
c. / personnel administration
d. / strategic planning
ANS:B
The definition of human resource management.
PTS:1DIF:EasyREF:1-1
2.How many phases are there in the employment cycle?
a. / Twob. / Three
c. / Four
d. / Five
ANS:B
The three phases of the employment cycle are preselection, selection, and postselection.
PTS:1DIF:EasyREF:1-1
3.Which of the following phases of the employment cycle involves planning practices?
a. / Preselectionb. / Selection
c. / Postselection
d. / Compensation
ANS:A
The preselection phase involves planning practices.
PTS:1DIF:EasyREF:1-1
4.The practices designed to maximize the performance and satisfaction levels of a firm’s employees are developed in the _____ phase of the employment cycle.
a. / selectionb. / preselection
c. / postselection
d. / HR Planning
ANS:C
In the postselection phase, the organization develops HRM practices for effectively managing people once they have “come through the door.” These practices are designed to maximize the performance and satisfaction levels of a firm’s employees.
PTS:1DIF:ModerateREF:1-1
5.Which process helps an organization estimate the number and types of employees needed to carry out its overall plan successfully?
a. / Performance appraisalb. / Job evaluation
c. / Demand and supply forecasting
d. / Job analysis
ANS:C
An organization estimates the number and types of employees needed to successfully carry out its overall plan through a process called demand and supply forecasting.
PTS:1DIF:EasyREF:1-1a
6.Through _____, managers attempt to anticipate and meet the changing needs relating to the acquisition, development, and utilization of their employees.
a. / human resource planningb. / job analysis
c. / performance appraisal
d. / recruitment
ANS:A
Human resource planning follows strategic planning and utilizes demand and supply forecasting to estimate the number and types of employees necessary to carry out the organization’s overall plans.
PTS:1DIF:ModerateREF:1-1a
7.Job analysis includes all of the following EXCEPT:
a. / choosing the most appropriate selection techniques.b. / developing training programs.
c. / assessing and choosing job candidates.
d. / helping to determine pay rates.
ANS:C
Selection involves assessing and choosing job candidates.
PTS:1DIF:ModerateREF:1-1a
8.Which of the following specifies what each worker does, the work conditions, and the worker qualifications necessary to perform the job successfully?
a. / Job analysisb. / Performance analysis
c. / Employee analysis
d. / Production analysis
ANS:A
Job analysis specifies what each worker does, the work conditions, and the worker qualifications necessary to perform the job successfully.
PTS:1DIF:ModerateREF:1-1a
9._____ is a systematic procedure for gathering, analyzing, and documenting information about particular jobs.
a. / Strategic planningb. / Job analysis
c. / Performance appraisal
d. / Job evaluation
ANS:B
Job analysis is a systematic procedure for gathering, analyzing, and documenting information about particular jobs.
PTS:1DIF:EasyREF:1-1a
10.Which process involves locating and attracting job applicants for particular positions?
a. / Recruitmentb. / Selection
c. / Preselection
d. / Orientation
ANS:A
Recruitment involves locating and attracting job applicants for particular positions.
PTS:1DIF:EasyREF:1-1b
11._____ is an HRM practice in which companies assess and choose from among job candidates.
a. / Recruitmentb. / Selection
c. / Training
d. / Placement
ANS:B
Selection involves assessing and choosing job candidates.
PTS:1DIF:EasyREF:1-1b
12.Planned learning experiences designed to teach workers how to perform their current or future jobs more effectively are referred to as:
a. / planning and control.b. / training and development.
c. / training and control.
d. / planning and development.
ANS:B
The definition of training and development.
PTS:1DIF:ModerateREF:1-1c
13.Which of the following is used to measure the adequacy of employees’ job performances and communicate these evaluations to them?
a. / Personnel evaluationb. / Performance evaluation
c. / Performance appraisal
d. / Employee monitoring
ANS:C
Organizations measure the adequacy of their employees’ job performances and communicate these evaluations to them through the performance appraisal process.
PTS:1DIF:EasyREF:1-1c
14._____ is a postselection process that aims to motivate employees to continue appropriate behaviors and correct inappropriate ones.
a. / Compensation administrationb. / Performance appraisal
c. / Training and development
d. / Strategic planning
ANS:B
Performance appraisal measures the adequacy of the employees’ performance on the job and facilitates feedback.
PTS:1DIF:DifficultREF:1-1c
15.The aim of _____ is to help the organization establish and maintain a competent and loyal workforce at an affordable cost.
a. / productivity improvementpracticesb. / incorporation practices
c. / employee monitoring practices
d. / compensation practices
ANS:D
The aim of compensation practices is to help the organization establish and maintain a competent and loyal workforce at an affordable cost.
PTS:1DIF:EasyREF:1-1c
16.Which of the following is not an event that strongly influences HRM practices?
a. / An increased emphasis on quality and teamworkb. / An increased emphasis on outsourcing
c. / Rapid advances in technology
d. / The occurrence of mergers and takeovers
ANS:B
An increased emphasis on quality and teamwork, rapid advances in technology, and the occurrence of mergers and takeovers are events that strongly influence HRM practices.
PTS:1DIF:ModerateREF:1-1d
17._____ addresses the issue of employee rights.
a. / Workplacejusticeb. / Unionization
c. / Employee monitoring practice
d. / Job analysis
ANS:A
Workplacejustice addresses the issue of employee rights.
PTS:1DIF:EasyREF:1-1d
18.Which of the following is not a human resource management practice regulated by union contracts?
a. / Management bonusesb. / Promotions
c. / Overtime allocations
d. / Discipline
ANS:A
Written contracts negotiated with the unions regulate many HRM practices, such as discipline, promotion, grievance procedures, and overtime allocations.
PTS:1DIF:ModerateREF:1-1d
19.Which of the following events have not influenced human resource management practices in recent years?
a. / Political instabilityb. / Rapid advances in technology
c. / Expanding cultural diversity at the workplace
d. / The growing use of part-time workers
ANS:A
Various social, economic, and technological events strongly influence HRM practices.
PTS:1DIF:EasyREF:1-1d
20.Which of the following does not come under an HR professional’s area of responsibility?
a. / Establish HRM proceduresb. / Advise and assist managers on HRM related matters
c. / Monitor and evaluate HR practices
d. / Implement HRM practices
ANS:D
Line managers implement HRM practices.
PTS:1DIF:ModerateREF:1-2a
21.Line managers carry out many procedures and methods devised by HR professionals. Which of the following is not an example of such procedures and methods?
a. / Human resource budgetingb. / Disciplinary procedures
c. / Performance appraisals
d. / Interviewing job applicants
ANS:A
Line managers typically interview potential employees, impose discipline, and conduct performance appraisals.
PTS:1DIF:ModerateREF:1-2b
22.Which of the following is a line manager’s responsibility?
a. / Establish HRM proceduresb. / Develop and choose HRM methods
c. / Monitor and evaluate HR practices
d. / Implement HRM practices
ANS:D
Line managers implement HRM practices.
PTS:1DIF:EasyREF:1-2b
23.What denotes a firm’s superior marketplace position relative to its competition?
a. / Marketing advantageb. / Competitive advantage
c. / Monopolistic competition
d. / Cost leadership
ANS:B
Competitive advantage is a status achieved by a company when gaining a superior marketplace position relative to its competition.
PTS:1DIF:EasyREF:1-3a
24.The text identifies two strategies associated with organizational efforts to gain a competitive advantage. Identify these among the following.
a. / Capital and human resourcesb. / Cash cow and segmentation
c. / Cost leadership and product differentiation
d. / Demand and supply forecasting
ANS:C
A firm can develop a competitive advantage or superior marketplace position relative to its competition through cost leadership or product differentiation.
PTS:1DIF:EasyREF:1-3a
25.What is per unit cost?
a. / The cost of producing one unit of productb. / The cost of marketing one unit of product
c. / The selling cost of one unit of product
d. / Number of units produced + Total cost of production
ANS:A
Per unit cost is the cost of producing one unit of product or service.
PTS:1DIF:EasyREF:1-3b
26.What strategy is a firm said to follow if it achieves a competitive advantage by offering services not offered by its competitors?
a. / Cost differentiationb. / Cost leadership
c. / Product differentiation
d. / Innovative marketing
ANS:C
Product differentiation occurs when a firm produces a product or service that is preferred by buyers.
PTS:1DIF:ModerateREF:1-3c
27.Which of the following does not lead to product differentiation?
a. / Increasing productivityb. / Creating a better quality product or service
c. / Providing innovative products or services
d. / Promoting and packaging a product to create the perception of higher quality
ANS:A
A firm can accomplish product differentiation by creating a better quality product or service, providing innovative products or services, choosing a superior location, and promoting and packaging its product to create the perception of higher quality.
PTS:1DIF:ModerateREF:1-3c
28.Who among the following identified the 16 HRM practices that can enhance a firm’s competitive advantage?
a. / Chris Ryanb. / Jeffrey Pfeffer
c. / Shari Caudron
d. / Rosemary Batt
ANS:B
Pfeffer identified 16 HRM practices that, in his opinion, can enhance a firm’s competitive advantage.
PTS:1DIF:EasyREF:1-4a
29._____ provides a signal to employees indicating long-term commitment by the organization to the work force.
a. / High wageb. / Selective recruiting
c. / Employment security
d. / Information sharing
ANS:C
Employment security was identified in a study by Jeffrey Pfeffer as providing a signal to employees of long-term commitment that generates employee loyalty and a willingness to expend extra effort for the organization’s benefit.
PTS:1DIF:ModerateREF:1-4a
30.Which of the following HRM practices tend to attract better-qualified applicants, make turnover less likely, and send a message that the firm values its employees?
a. / Employment securityb. / High wages
c. / Incentive pay
d. / Information sharing
ANS:B
High wages tend to attract better-qualified applicants, make turnover less likely, and send a message that the firm values its employees.
PTS:1DIF:ModerateREF:1-4a