Human Resource Management
Mock Exam
Course Introduction
Human Resource Management is a comprehensive course that explores the strategies and processes involved in acquiring, developing, motivating, and retaining an organization's workforce. Students will examine key topics such as recruitment and selection, training and development, performance management, compensation and benefits, labor relations, diversity, and legal aspects of HRM. Through theoretical study and applied exercises, the course provides insights into the evolving role of HR professionals in supporting organizational goals and shaping workplace culture within both domestic and global contexts.
Recommended Textbook
Compensation 12th Edition by George Milkovich
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Chapter 1: Pay-For-Performance: The Evidence
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Q1) Since HR research contains information useful to managers, most managers read research in HR management, and compensation journals.
A)True
B)False
Answer: False
Q2) Which of the following is NOT a question to ask for determining if research has value?
A)Is the research useful?
B)Can alternative explanations be ruled out?
C)Was the research conducted by PhD researchers?
D)Is correlation separated from causation?
Answer: C
Q3) In the context of pay relationships, which of the following is illegal in the United States?
A)Paying on the basis of the nature of jobs
B)Paying on the basis of pay comparisons with competitors
C)Paying on the basis of one's age
D)Paying on the basis of one's skill level
Answer: C
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3
Chapter 2: Strategy: The Totality of Decisions
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Q1) Since unions represent such a small fraction of the labor force, their influence on pay decisions is insignificant.
A)True
B)False
Answer: False
Q2) In the formula predicting performance, the component most closely related to compensation is _____.
A)A
B)M
C)O
D)C
Answer: B
Q3) A compensation strategy should reflect an organization's values.
A)True
B)False
Answer: True
Q4) Customer-focused pay strategies are most likely to use market-based pay.
A)True
B)False
Answer: False
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Chapter 3: Defining Internal Alignment
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Q1) Which of the following pay structure procedures would NOT increase perceptions of pay fairness?
A)Consistently applying pay procedures to all employees
B)Using accurate data
C)Hiring consultants to develop the pay structure
D)Including appeals procedures
Answer: C
Q2) Labor unions support small pay differentials.
A)True
B)False Answer: True
Q3) Pay structure refers to the array of pay rates for different work or skills within a single organization.
A)True
B)False
Answer: True
Q4) Exchange value is always higher than use value.
A)True
B)False
Answer: False
Page 5
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Chapter 4: R: Job Analysis
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Q1) ADA has directly led many employers to _____.
A)only use the task inventory method for job analysis
B)only use the PAQ method for job analysis
C)modify special benefits so that allowances can be made for people with disabilities as required by the law
D)modify the format of their job descriptions to specifically call out the essential elements
Q2) _____ looks at how an organization does its work: activities pursued to accomplish specific objectives for specific customers.
A)Job analysis
B)Market analysis
C)Job structure
D)Supply chain analysis
Q3) Traditional job analysis that makes fine distinctions among levels of jobs has been accused of reinforcing rigidity in organizations.
A)True
B)False
Q4) Write a short note on offshoring and the susceptibility of job analysis to offshoring.
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Chapter 5: Job-Based Structures and Job Evaluation
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Q1) _____ is the process of systematically determining the relative worth of jobs for the purpose of creating an organization's job structure.
A)Performance evaluation
B)Job restructuring
C)Job evaluation
D)Point factor evaluation
Q2) Which of the following is a disadvantage of the point method?
A)It can leave too much room for manipulation.
B)It can become bureaucratic and rule-bound.
C)It does not allow for comparisons.
D)It does not communicate what is valued.
Q3) Common characteristics of the point method include all of the following EXCEPT:
A)benchmark factor classes.
B)numerically scaled factor degrees.
C)factor weights.
D)compensable factors.
Q4) What are the characteristics of a benchmark job?
Q5) What are the major decisions in a job evaluation process?
Q6) What are the steps in designing a point plan?
Q7) Discuss the two common methods of ranking.
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Chapter 6: Person-Based Structures
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Q1) Which of the following is most likely to be a disadvantage of skill-based pay plans?
A)They are generally not favored by employees as it is difficult to see the connection between the plan, the work, and the size of the paycheck.
B)They discourage adaptability of employees to changing production needs.
C)They are expensive in the long run as the majority of employees become certified at the highest pay levels.
D)They dampen employee versatility.
Q2) Who among the following is examining the validity of a job evaluation?
A)Keira, who is measuring the degree to which the job evaluation plan matches an agreed-upon pay structure for benchmark jobs
B)Laila, who is measuring the effectiveness of a formal appeals process
C)Keith, who is surveying employee attitudes about the job evaluation plan
D)Rita, who is requesting the management for a reanalysis and a reevaluation of the required skills as she feels her job is evaluated incorrectly
Q3) How do skill-based plans motivate employees?
Q4) What is relevance of flexibility in skill-based plans?
Q5) What is the relevance of certification in a multiskill system?
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Page 8
Chapter 7: Defining Competitiveness
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Q1) The pay-level policy that is most likely to reduce pay dissatisfaction is a(n) _____.
A)lead policy
B)employer of choice policy
C)lag policy
D)match policy
Q2) The pay policy that is most closely associated with the decreased ability to attract employees is a(n) _____ policy.
A)lead
B)match
C)lag
D)employer of choice
Q3) _____ puts a lid on the maximum pay level an employer can set.
A)Government legislation
B)The product market
C)The labor market
D)Labor market competition
Q4) Segmenting sources of labor is a means of reducing labor costs.
A)True
B)False
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Chapter 8: Designing Pay Levels, Mix, and Pay
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Q1) Pay ranges:
A)are flexible enough to deal with differences in quality but not with the productivity or value of these quality variations.
B)usually lead to an increase in employee turnover.
C)reflect the differences in performance or experience that an employer wishes to recognize with pay.
D)cause employees to believe that their compensation cannot increase in the same job.
Q2) If the purpose of a survey is to price the entire structure of a job, then benchmark jobs can be selected to include the entire job structure.
A)True
B)False
Q3) What is a market line?
Q4) Identifying pay survey participants by company name is considered price fixing under the Sherman Act.
A)True
B)False
Q5) What is a survey? What purpose does it serve in terms of compensation?
Q6) Explain the difference between standard deviation and quartiles and percentiles.
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Chapter 9: Pay-For-Performance: the Evidence
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Q1) According to the agency theory, because employees prefer a salary, they will demand a wage premium in exchange for accepting performance-based pay.
A)True
B)False
Q2) All of the following EXCEPT _____ require periodically re-earning the added pay.
A)success-sharing plans
B)merit bonuses
C)profit-sharing plans
D)cost-of-living increases
Q3) There is evidence that every 10 percent increase in the bonus paid to employees by a firm yields a _____ percent increase in ROA to the firm.
A)1
B) 1.5
C)5
D)15
Q4) What predictions can be made about performance-based pay based on Maslow's theory?
Q5) Explain the expectancy theory of motivation.
Q6) Briefly explain the concept of flexible compensation.
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Chapter 10: Pay-For-Performance Plans
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Q1) A _____ plan requires division of a task into simple actions and determination of the time required by an average skilled worker to complete each action.
A)standard hour
B)Rowan
C)Bedeaux
D)Merrick
Q2) One common feature of all types of incentive plans is:
A)an established standard of performance that is used to determine the magnitude of the incentive pay.
B)a sharing contract between the employees and employers, which stipulates that the losses incurred by the companies will be shared by both employees and employers.
C)the established formula that specifies the maximum percentage of base pay allocated as incentives.
D)a risk-sharing plan that increases pay depending upon the turnover rate of a company.
Q3) Why do companies prefer merit bonuses over merit pay increases?
Q4) Discuss SVOP.
Q5) What is the difference between success-sharing plans and risk-sharing plans?
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Chapter 11: Performance Appraisals
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Q1) Keeping a performance diary can help employers defend against discrimination charges stemming from performance ratings.
A)True
B)False
Q2) Which of the following is the best appraisal format in terms of legal defensibility?
A)BARS
B)MBO
C)Essay format
D)Ranking method
Q3) Which of the following is statements is true of leniency errors?
A)It is the error of consistently rating someone higher than is deserved.
B)It is the error of avoiding extremes in ratings across employees.
C)It is the error of downgrading an employee across all performance dimensions exclusively because of poor performance on one dimension.
D)It is the error of giving better ratings to individuals who are like the rater in behavior and personality.
Q4) Why is it appropriate to define behavioral expectations only for highly routine tasks?
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13
Chapter 12: The Benefit Determination Process
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Q1) Today, benefits make up about 25 percent of payroll costs.
A)True
B)False
Q2) The Family Medical Leave Act of 1993 mandates 20 weeks of leave for all workers at companies that employ 10 or more people.
A)True
B)False
Q3) _____ allows employees who have resigned or have been laid off through no fault of their own to continue receiving health coverage under their employer's plan at a cost borne by the employee.
A)Health Maintenance Act (1973)
B)FLSA (1938)
C)The tax reform of 1982
D)COBRA (1984)
Q4) A job ad stating generous benefits leads applicants to place higher value on benefits in choosing among jobs.
A)True
B)False
Q5) What are the major disadvantages of a flexible benefits package?
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Chapter 13: Benefit Options
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Q1) Which of the following is a feature of defined contribution plans?
A)They are faster to vest than defined benefit plans.
B)They are characterized by high contribution rates.
C)They are less portable than defined benefit plans.
D)They are fully funded by employers.
Q2) Which of the following is NOT a benefit that is required by statutory law?
A)Workers' compensation
B)Social Security
C)Pension and retirement benefits
D)Unemployment compensation
Q3) Vesting refers to the length of time an employee must work for an employer before he or she is entitled to employer payments made into a pension plan.
A)True
B)False
Q4) A 401(k) is an example of a defined benefit plan.
A)True
B)False
Q5) What is a cash balance plan?
Q6) What is the central challenge of Social Security payments? How are they tackled?
Q7) Explain vesting and portability.
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Chapter 14: Compensation of Special Groups
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Q1) In a recession environment, companies need to react to the decreasing level of sales by rewarding top-level performers that achieve high levels of sales despite the economic downturn.
A)True
B)False
Q2) All of the following EXCEPT _____ would be considered a special compensation group.
A)sales staff
B)contingent workers
C)unpaid interns
D)professional employees
Q3) The most recent trend in executive compensation is an increased use of stock options.
A)True
B)False
Q4) In maturing markets, companies focus both on performance-based pay tied to customer satisfaction and on greater.
A)True
B)False
Q5) What is a tally sheet and what is it used for?
Page 16
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Chapter 15: Union Role in Wage and Salary Administration
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Q1) _____ is movement through the wage ranges where seniority is specified as the basis of the movement.
A)Length-of-stay progression
B)Automatic progression
C)Merit differential
D)Performance differential
Q2) Unions respond relatively rapidly to wage increases during inflationary periods.
A)True
B)False
Q3) There are numerous possible costs and benefits to union members for agreeing to a gain-sharing plan.
A)True
B)False
Q4) Lump-sum awards are added to base wages.
A)True
B)False
Q5) What is meant by automatic progression?
Q6) Briefly summarize lump-sum awards and ESOPs.
Q7) Briefly describe gain-sharing plans.
Q8) What is the spillover effect?
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Chapter 16: International Pay Systems
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Q1) Companies in the United States, United Kingdom, and some central European countries are most likely to have centralized wage bargaining.
A)True
B)False
Q2) In the comparison of the pay systems of two well-known Japanese companies Toyota and Toshiba, Toyota _____.
A)places greater emphasis on external market rates
B)places lesser emphasis on individual-based merit pay
C)uses far more levels in its structure
D)places lesser emphasis on individual-based performance pay
Q3) Traditionally, Japan's employment relationships were supported by _____.
A)lifetime security within the company
B)performance-based pay systems alone
C)centralized unions representing workers across several companies within an industry
D)performance-based promotion systems alone
Q4) In Malaysia and Mexico, egalitarian pay structures fit best with the culture.
A)True
B)False
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18
Chapter 17: Government and Legal Issues in Compensation
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Q1) Which of the following regarding child labor is NOT true?
A)Persons under 18 cannot work in hazardous jobs such as logging and meat packing.
B)Persons under 16 cannot be employed in jobs involving interstate commerce except for nonhazardous work for a parent or guardian.
C)The ILO finds that child labor is increasing on a global basis.
D)The highest rates of child labor are in sub-Saharan Africa.
Q2) The gender wage gap is moderate for recent college graduates and decreases as the cohort ages.
A)True
B)False
Q3) Pay differences for equal work may be justified for demonstrably business-related reasons.
A)True
B)False
Q4) A GAO study found that 9 of 10 cases brought by GAO undercover agents posing as workers were mishandled by the Wage and Hour division of the Labor Department.
A)True
B)False
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19
Chapter 18: Management: Making It Work
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Q1) The Web page for the compensation society is _____.
A)Society for Human Resource Management
B)American Compensation Association
C)International Compensation and Benefits Society
D)WorldatWork
Q2) MerTon Inc.decides to reduce labor costs by using exit incentives to encourage some of its senior, high-earning members to leave the organization.It replaces the employees who quit with new employees and pays them low wages.Which of the following statements is most likely true in this scenario?
A)The number of employees being paid red circle rates will increase.
B)The salary range midpoint of the company is lesser than the compa-ratio.
C)The salary range midpoint of the company is higher than the actual salary paid.
D)The compa-ratio of the company is greater than one.
Q3) Total compensation in many organizations makes up at least _____ percent of operating expenses. A)20
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Page 20