Managing Human Capital Chapter 1

Staffing

-Process of planning, acquiring, deploying, and retaining employees -Enables the organization to meet its talent needs and execute its business strategy -Supports the movement of talent into, through, and out of the organization -Enables an organization to compete successfully in its marketplace

Employee-management relations

-Reflect societal beliefs about the relationship between employees and the capital owners of the organization -Determine the employment rights of both employers and employees

Health and Safety

-Wellness, fire and food safety, ergonomics, injury management, disaster preparedness, industrial hygiene, and even bullying and workplace violence -Involves protecting employees from work-related toxins, accidents, and injuries -Benefits organizations by increasing employee productivity, lowering healthcare and workers' compensation insurance premiums, and decreasing health-related lost work time

Effective and strategic HRM aligns 1) 2) 3) With ______________________________________

1) Employee talents 2) Goals 3) Motivation Organizational Needs

HRM & Organizational Performance

-HRM policies and practices add value to organizations and influence organizational performance by either improving efficiency or contributing to revenue growth -Effective HRM systems increase the organization's ability to meet its goals, enhance the organization's ability to grow and manage change, and increase employee engagement, effort, and performance

Strategic human resource management

--Aligns a company's values and goals with the behaviors, values, and goals of employees --Influences the strategies of each of the firm's human resource functions, including staffing, performance management, training and development, and compensation

Operational risk

--Can influence an organization's ability to execute the business strategy --HRM affects the speed and the effectiveness of talent acquisition as well as the development of employees' skills and the identification and retention of top performers --Can directly influence the organization's success or failure

Employee Handbook

--Document the organization's HRM policies and procedures --Allow employees to easily research topics they need more information on later

Financial risk

--HRM performance affects the organization's workforce costs and productivity directly --Compensation, benefits, turnover, overtime, and time-to-hire and indirectly through errors, accidents, delays, and lost production

Business strategy

--How the firm will compete in its marketplace --Should reflect what the organization's customers want, what the firm wants, and what the firm can cost-effectively deliver

Effective HRM systems

--Improve organizational efficiency --Contribute to revenue growth --Increase employees' understanding of their responsibilities and how they relate to the organization's mission, business strategy, and goals --Develop and enhance employee capabilities and talents to enable strategic execution and goal attainment --Equitably link rewards to responsibility level and performance --Promote the efficient and effective utilization of employees' skills and knowledge --Increase employee engagement, effort, and performance --Increase the organization's ability to manage change --Decrease an organization's legal liability for compliance with employment laws

Compliance risk

--Legal ramifications --Diversity, health and safety, union relations, whistleblowers, and harassment --SEC regulations mandate the board of directors' responsibility for oversight of risk management policies --Boards must make known any material risks with the potential to affect company earnings --Acquisition, retention, and performance of talent have the potential to affect company earnings, it is essential that organizations identify and manage these risks through effective HRM

Developing a business strategy

--Making choices about which products and services to offer --Deciding which strategies to pursue to gain a competitive advantage Both choices depend on a company's competitive capabilities, strengths, and weaknesses --Leverage the firm's resources and capabilities in ways that result in superior value creation compared to their competitors --Competitive advantage results from the ability to leverage resources and capabilities that derive in part from its talent --HRM needs to pursue to acquire, develop, motivate, and retain the appropriate talent --Talent is often considered to be the most critical element in building a customer-oriented company

HRM Responsiblities

--Responsible for managing organizational change, including business expansion, restructuring, and downsizing --Responsible for adding value to the organizations and contributing to the ethical success of those organizations --Accept professional responsibility for individual decisions and actions --Advocates for the profession by engaging in activities that enhance its credibility and value

Talent Philosophy

--System of beliefs about how its employees should be treated --Reflects how an organization thinks about its employees

Strategic risk

--Talent strategy --Company culture --Ethics --Investments in people --Implementation of change initiatives

Rewards and benefits

-Compensation and benefits perceived as both adequate and equitable that reward employees for their contributions to organizational goal attainment are important to employee motivation, performance, and retention

Training and development

-Focuses on developing employee capabilities through both formal and informal activities -Responsible for career planning, organizational development, and often legal compliance

Performance management

-Involves aligning individual employees' goals and behaviors with organizational goals and strategies, appraising and evaluating past and current behaviors and performance, and providing suggestions for improvement

What is best used to help employees understand the HR policies and procedures? A. employee handbooks B. values statements C. union contracts D. codes of ethics

A. Employee handbooks Employee handbooks document the organization's HRM policies and procedures, and they are very important in helping employees learn about the company's HRM policies. Further, handbooks allow employees to research topics they need more information on later.

Which type of risk management is associated with the reduction of costs in hiring employees? A. financial risk B. operational risk C. strategic risk D. compliance risk

A. Financial risk Financial risk is associated with all workforce and productivity costs.

________ and ________ are a way for organizations to achieve growth, expand internationally, and respond to industry deregulation. A. mergers and acquisitions B. values and achievements C. motivation and performance D. goals and ambiguity

A. Mergers and acquisitions Mergers and acquisitions are a common way for companies to grow and expand internationally, and to acquire the talent needed to execute their business strategy.

What type of management involves aligning individual employees' goals and behaviors with organizational goals and strategies? A. performance management B. change management C. strategic management D. succession management

A. Performance management Performance management is associated with appraising and evaluating past and current employee behaviors and performance and providing suggestions for improvement.

What are two of the most important management problems businesses face today? A. recruitment and training B. performance management and rewards C. stress and feedback D. compensation and training

A. Recruitment and Training Training is often very expensive and can be a huge waste of resources if companies fail to recruit and hire people who can succeed and contribute to the organizational goals.

An organization's ________ is a system of beliefs about how its employees should be treated. A. talent philosophy B. business philosophy C. employee philosophy D. strategic philosophy

A. Talent philosophy An organization's talent philosophy is a system of beliefs about how its employees should be treated, including: the value placed on diversity; ethics; whether the firm would like employees to stay for a limited time or for their entire careers; and whether employees are viewed as assets to be managed or as investors choosing where to allocate their time and effort.

When an organization adopts a new manufacturing process, which HRM function is responsible for improving employees' skills to meet its new talent needs? A. training B. hiring C. recruiting D. managing

A. Training Training and development is focused on developing employee capabilities through both formal and informal activities.

Mergers and acquisitions often fail because of ________. A. culture issues B. financial issues C. technical issues D. procedural issues

A. culture issues Mergers and acquisitions often fail due to culture issues when there is a mismatch between the values and organizational structures of the two merging organizations.

HRM influences organizational performance through its influence on ________. A. efficient systems and processes B. managerial decision making C. IT infrastructure D. internal communication methods

A. efficient systems and processes With efficient systems and processes in place, HRM is able to improve organizational efficiency, promote the efficient and effective utilization of employees' skills, and increase the organization's ability to manage change.

Workplace health and safety topics include disaster preparedness, ergonomics, and ________. A. mental health B. discrimination C. performance management D. labor unions

A. mental health Mental health is a topic related to overall health. Reduced job stability and increased workload demands can increase stress and increase employees' risk for physical and mental illness.

To expand internationally, ________ have been common organizational strategies. A. mergers and acquisitions B. motivation and performance C. goals and ambiguity D. values and achievements

A. mergers and acquisitions Mergers and acquisitions are common ways for companies to grow and expand internationally, and to acquire the talent needed to execute the business strategy

To promote and maintain ethical behavior, managers need to provide ________ feedback. A. performance B. strategic C. critical D. constructive

A. performance Performance feedback is an important step in performance management in which an employee is given frequent feedback about what they should be doing and how well they are doing it. Reinforcing ethical behaviors is a critical component of this type of feedback.

When a company creates new HRM initiatives to strengthen employees' ethical awareness and company culture to enhance its competitive advantage, it is managing ________. A. strategic risk B. operational risk C. financial risk D. compliance risk

A. strategic risk Strategic risk involves all aspects of company culture, ethics, investments in people, and the implementation of change

Indirect financial compensation (Benefits)

Any and all financial rewards not considered direct financial compensation —health insurance, wellness benefits, paid vacations, and free meals

What type of feedback reinforces ethical behavior? A. strategic B. performance C. constructive D. critical

B. Performance Performance feedback is an important step in performance management wherein an employee is given frequent feedback about what they should be doing and how well they are doing it. Reinforcing ethical behaviors is a critical component of this type of feedback.

By providing the raw talent that the system will manage, staffing influences the effectiveness of which system? A. strategic management B. performance management C. succession management D. change management

B. Performance management Performance management is associated with appraising and evaluating past and current talent behaviors and performance

Which type of risk management encompasses the HRM initiatives to strengthen ethical awareness and company culture? A. financial risk B. strategic risk C. operational risk D. compliance risk

B. Strategic risk Strategic risk involves all aspects of company culture, ethics, investments in people, and the implementation of change.

________ planning can help to ensure that an organization has people ready to assume leadership positions as soon as those positions become available. A. Strategic B. Succession C. Change D. Performance

B. Succession Succession planning can prevent companies from being directionless at a time when leadership is absolutely critical

The sum of all the rewards an employee receives in exchange for their time, efforts, and performance is referred to as ________. A. essential rewards B. total rewards C. indirect financial compensation D. direct financial compensation

B. Total rewards Total rewards are comprised of direct financial compensation, indirect financial compensation, and nonfinancial compensation. In other words, total rewards are all forms of compensation that a company may give to their employees. When evaluating a job offer, it is important for employees to take into account the total rewards being offered for that position as the salary is only one component of the total package.

Compensation received in the form of salary, wages, commissions, stock options, or bonuses is called ________. A. nonfinancial compensation B. direct financial compensation C. indirect financial compensation D. secondary financial compensation

B. direct financial compensation Direct financial compensation is considered compensation that is delivered in the form of a payment including salary, wages, commissions, stock options, or bonuses

Managing organizational change is the responsibility of which type of manager? A. front line B. human resource C. executive resource D. executive

B. human resource HRM professionals are responsible for managing organizational change, including business expansion, restructuring, and downsizing.

HRM affects the speed and effectiveness of talent acquisition as well as the development of employees' skills and the identification and retention of top performers. These and other HRM activities that can directly influence the organization's success or failure are examples of ________. A. strategic risk B. operational risk C. financial risk D. compliance risk

B. operational risk Operational risk encompasses everything to do with talent acquisition and talent development

One role of HRM is to staff the most qualified and appropriate employees to support the company in meeting its ________. A. business strategy B. employee strategy C. executive strategy D. management strategy

Business Strategy A company's business strategy should reflect customer needs, firm goals, and a realistic forecast of what the firm can deliver. The staffing process is crucial to how the organization can compete successfully in the marketplace

Each of the functional areas of HRM must be consistent ________. A. over time B. across cultures C. in what they reinforce D. in what they cost

C. In what they reinforce The functional areas of HRM are designed to maximize the efficiency and effectiveness of an organization's talent to meet the organizational goals. All functional areas must be consistent in what they reinforce so they do not undermine each other.

Staffing is the process of planning, acquiring, deploying, and retaining employees that enables the organization to meet its talent needs and execute its ________. A. executive strategy B. employee strategy C. business strategy D. management strategy

C. Business strategy A company's business strategy should reflect customer needs, firm goals, and a realistic forecast of what the firm can deliver. The staffing process is crucial to how the organization can compete successfully in the marketplace

How can HRM create value within an organization? A. by keeping pay as low as possible B. by only hiring people with advanced degrees C. by making the company better at executing its strategy D. by leasing employees to save money

C. By making the company better at executing its strategy In order to effectively execute the organization's strategy, effective staffing is needed. The people within the organization create value by supporting the mission and objectives as well as the business strategy.

Taking workplace health and safety seriously helps to reduce ________ risk. A. financial B. strategic C. compliance D. operational

C. Compliance Every employment-related decision can have legal ramifications, which is why it is critical for a company to comply with rules and standards regarding health and safety in the workplace.

The purpose of the organizational function of HRM is to ________. A. detain, hire, devise, reward, and refresh talent B. detain, hire, develop, rework, and retain talent C. attract, hire, develop, reward, and retain talent D. attract, hire, devise, rework, and refresh talent

C. attract, hire, develop, reward, and retain talent

Employee-management relations ultimately determine the employment rights of ________. A. only employees B. only employers C. both employees and employers D. labor unions

C. both employees and employers Employee-management relations reflect societal beliefs about the relationship between employees and the capital owners of the organization.

Thinking through the ramifications of an employment-related decision in terms of legal risk, particularly in the areas of diversity, health and safety, union relations, whistleblowers, and harassment, is an example of managing ________. A. financial risk B. compliance risk C. operational risk D. strategic risk

C. compliance risk Compliance risk involves the decisions made by the organization related to legal matters

Which type of risk management involves consideration of legal issues in terms of diversity, health and safety, union relations, whistleblowers, and harassment? A. financial risk B. operational risk C. compliance risk D. strategic risk

C. compliance risk Compliance risk involves the decisions related to legal matters made by the organization.

When new HRM processes reduce the cost of hiring employees, they have reduced its ________. A. operational risk B. compliance risk C. financial risk D. strategic risk

C. financial risk Financial risk is associated with all workforce and productivity costs.

Compensation including free meals, vacation time, and health insurance is called ________. A. secondary financial compensation B. nonfinancial compensation C. indirect financial compensation D. direct financial compensation

C. indirect financial compensation Indirect financial compensation includes health insurance, wellness benefits, paid vacations, and free meals

Rewards and incentives given to employees that are not financial in nature, including intrinsic rewards received from the job itself or from the work environment, are called ________. A. secondary financial compensation B. direct financial compensation C. nonfinancial compensation D. indirect financial compensation

C. nonfinancial compensation Nonfinancial compensation is a term used for rewards and incentives not tied directly to money.

_______ between HR and employees is extremely important. A. Compassion B. Cultural differences C. Clarification D. Communication

Communication

________ between HR and employees is extremely important. A. Clarification B. Cultural differences C. Communication D. Compassion

Communication

Direct financial compensation

Compensation received in the form of salary, wages, commissions, stock options, or bonuses

What is the ultimate goal of human resource management? A. to optimize the product testing and development process B. to attract and maintain key investment in the company's portfolio C. to be the main point of communication with shareholders D. to manage risk and retain great employees

D. to manage risk and retain great employees Managing risk and attracting and retaining employees are critical for a company's success.

What type of competitive strategy does a firm have to determine its place in the market? A. financial B. management C. performance D. business

D. Business A company's business strategy reflects customer needs, firm goals, and a realistic forecast of what the firm can deliver, and also determines how competitive the company will be in its marketplace.

Separations due to poor performance, layoffs, or restructuring are part which HRM function? A. hiring B. recruiting C. performance D. staffing

D. Staffing Staffing involves moving talent in, through, and out of the organization.

Mergers and acquisitions often fail because of ________. A. technical issues B. procedural issues C. financial issues D. culture issues

D. culture issues Mergers and acquisitions often fail due to culture issues when there is a mismatch between the values and organizational structures of the two merging organizations.

Which type of risk management involves the speed and effectiveness of talent acquisition, development of employee skills, and retention of top performers? A. strategic risk B. financial risk C. compliance risk D. operational risk

D. operational risk Operational risk encompasses everything to do with talent acquisition and development

Human resource strategy

Links the entire human resource function with the firm's business strategy

Nonfinancial compensation

Rewards and incentives given to employees that are not financial in nature, including intrinsic rewards received from the job itself or from the physical or psychological work environment (e.g., feeling successful or appreciated)

HRM influences organizational performance through its influence on what employees ______do, what employees ______ do, and what employees _________do.

Should Can Will

HRM functions (6)

Staffing Performance management Training and Development Rewards and Benefits Health and Safety Employee-Management Relations

Total reward

the sum of all of the rewards employees receive in exchange for their time, efforts, and performance