Human Capital Management
Pre-Test Questions
Course Introduction
Human Capital Management focuses on the strategic approach to the effective and efficient management of people within organizations, recognizing employees as valuable assets in achieving business goals. The course covers key concepts such as talent acquisition, employee development, performance management, compensation and benefits, workforce planning, and succession strategies. Emphasizing the integration of human resource practices with organizational strategy, students will explore how data-driven decision-making, leadership, and organizational culture shape the development of a skilled, motivated, and resilient workforce. Through case studies and practical applications, the course prepares students to address contemporary challenges in managing human capital and leveraging it as a source of competitive advantage.
Recommended Textbook
Strategic Compensation in 6th Canada Edition by Richard Long
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Chapter 1: A Road Map to Effective Compensation
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Sample Questions
Q1) Which of the following best describes the term "reward strategy"?
A) the means through which performance bonuses are paid
B) the mix of rewards provided to organization members
C) the means for recognizing outstanding achievement
D) the means for identifying the key contextual variables for an organization
Answer: B
Q2) Which item is considered part of a compensation system?
A) performance pay
B) flexible work schedules
C) positive organizational culture
D) work/life programs
Answer: A
Q3) Which statement is most accurate regarding the reward strategy?
A) The reward system is the blueprint for creating the reward strategy.
B) Intrinsic awards alone will not motivate the needed behaviour.
C) Determining the mix of rewards to be provided is an easy process.
D) Various combinations of intrinsic and extrinsic rewards need to be considered for developing the optimal reward strategy.
Answer: D
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Page 3
Chapter 2: A Strategic Framework for Compensation
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Q1) You have been asked to provide some element of rationale why some companies using a human relations strategy sometimes attempt to change to a more classical framework.Which statement would best describe the most important issue associated with your explanation?
A) It is simply very hard on management to pursue a human relations strategy.
B) There is pressure from owners to increase profitability.
C) Companies fail to react fast enough to changes in the environment.
D) Greater worker mobility makes a human relations strategy obsolete.
Answer: C
Q2) The strategic framework for compensation helps to identify the corporate strategy that will best suit a firm's compensation strategy.
A)True
B)False
Answer: False
Q3) Which organizational variable would complement a classical management strategy?
A) strong policies and procedures dictating work processes
B) high level of horizontal communication
C) significant autonomy given to employees
D) employee-focused organizational culture
Answer: A
4
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Chapter 3: A Behavioural Framework for Compensation
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Q1) A sales organization rewards employees for the number of client contacts made via telephone.A review of client contact quality determines that most of these contacts will never convert into sales.As it relates to reward problems,this exemplifies a lack of congruency between rewards and behaviour.
A)True
B)False
Answer: True
Q2) Economic theory of motivation is closely aligned with which management strategy?
A) differentiation management strategy
B) high-involvement management strategy
C) human relations management strategy
D) classical management strategy
Answer: D
Q3) Which of the following is associated with job satisfaction?
A) increased job effort
B) lower employee turnover
C) higher training costs
D) job security
Answer: B
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Page 5
Chapter 4: Components of Compensation Strategy
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Q1) Competitive pressure may force some firms to provide indirect pay.
A)True
B)False
Q2) Which of the following is a group performance pay plan?
A) gain sharing
B) profit sharing
C) stock options
D) piece rates
Q3) Briefly explain the three methods for establishing base pay.
Q4) An advantage of indirect pay is that benefits receive more favourable income tax treatment than direct pay.
A)True
B)False
Q5) What are two key advantages of market pricing?
A) simplicity and cost
B) equity and fairness
C) equity and efficiency
D) range and depth
Q6) Briefly describe the three main categories of performance pay,and provide examples for each category.
Page 6
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Chapter 5: Performance Pay Choices
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Q1) Which statement best describes how North American employees view merit raises?
A) They are viewed as not promoting employee-employer relationships.
B) They are viewed with significant scepticism by employees.
C) They are not viewed in a positive light because of the objective nature of performance reviews.
D) They are viewed in a positive light by unionized employees.
Q2) Discuss the nature of suggestion systems and some of the problems you need to be aware of.
Q3) Identify and briefly define each of the three types of employee stock plans.
Q4) What is a key advantage of piece rate pay systems?
A) They reduce the need for external control of employees through supervision.
B) They create team work.
C) They link pay to group effort.
D) They encourage "rate busters."
Q5) The central issue associated with attendance incentives is the notion that these programs treat only the symptoms while ignoring the underlying issues that cause absenteeism in the first place.
A)True
B)False
Q6) Explain the difference between goal-sharing and gain-sharing plans.
Page 7
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Chapter 6: Formulating the Reward and Compensation Strategy
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Q1) Which pair of job characteristics is likely associated with a high-involvement managerial strategy?
A) individual and low customer contact jobs
B) low task interdependence and narrow-in-scope jobs
C) simple and repetitious jobs
D) broad and creative jobs
Q2) The demand for carpenters far outstrips the supply in British Columbia.In fact,many of the construction companies are relying on the international market to fill vacancies.Which term best describes the labour market for carpenters in British Columbia?
A) tight
B) loose
C) contingent
D) contractual
Q3) Briefly discuss the four key understandings necessary for successful formulation of compensation strategy.
Q4) Golden parachutes generally assure large severance payments for dismissed executives.
A)True
B)False
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Chapter 7: Evaluating Jobs: the Job Evaluation Process
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Q1) Which process is used to determine the relative importance of the employee's job to the organization and the placing of those jobs in the same hierarchy level?
A) job analysis
B) market analysis
C) performance appraisal
D) job evaluation
Q2) Which of the following practices can NOT be used to achieve pay equity?
A) Pay levels for male comparator jobs will be lowered.
B) All positions in a job class will receive adjustments in dollar terms.
C) Each female job class must receive a yearly adjustment until pay equity is achieved.
D) Inequitable female job classes with the lowest job rate must receive a greater adjustment.
Q3) Red-circling applies to employees who are below the pay range for their jobs.
A)True
B)False
Q4) The Ontario Pay Equity Act covers all employers in the province.
A)True
B)False
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Chapter 8: Evaluating Jobs: the Point Method of Job Evaluation
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Q1) Which compensable factor would you include under the main category of "working conditions"?
A) requirements associated with being exposed to health hazards
B) requirements associated with educational levels
C) requirements associated being responsible for the safety of coworkers
D) requirements associated with having to produce certain levels of output
Q2) In exploring solutions to job evaluation problems,what is NOT one of the main steps?
A) Check that benchmark jobs are equivalent to market comparator jobs.
B) Determine if the wrong factors have been included in the job evaluation system.
C) Adjust the point totals of the outlier jobs to improve the correlation coefficient.
D) Examine whether jobs have been badly evaluated.
Q3) What are the key considerations in establishing pay grades and pay ranges?
Q4) What does the correlation coefficient of the market pay line tell you?
A) "goodness of fit" between the job evaluation points and market pay
B) pay equity adjustments to be made
C) degree of freedom in market rates
D) accuracy of the market data
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Chapter 9: Evaluating the Market
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Q1) Which of the following is NOT considered a general pattern in compensation levels?
A) Union employees receive more compensation than comparable non-union employees.
B) Male employees earn more than female employees on average.
C) Resource sector employees earn more than those in the service sector.
D) The wage gap between public-sector organizations and private-sector firms is narrow for top-level employees.
Q2) Which compa-ratio suggests that,on average,employees are being paid above the mid-point of the range?
A) 0.01
B) 0.92
C) 1.00
D) 1.03
Q3) Which method is used to measure dispersion of salary data across employers?
A) percentiles
B) weighted mean
C) simple mean
D) median
Q4) Briefly describe the process for analyzing and interpreting survey data.
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Chapter 10: Evaluating Individuals
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Q1) John has fabulous interpersonal skills.This causes raters to ignore some of his weaknesses,which include time management,technical,and leadership skills.Which perceptual error is likely impacting John's rating?
A) central tendency error
B) halo error
C) leniency effect
D) contrast effect
Q2) The 360-degree feedback method usually gathers data/information from three sources: subordinates,supervisors,and at times,customers.
A)True
B)False
Q3) Identify the key characteristics and advantages of 360-degree feedback appraisal system.
Q4) Which statement would you NOT associate with a multisource/360-degree feedback process?
A) They tend to be seen by recipients as fair.
B) They are more accurate than single-source processes.
C) They tend to be more effective when results are linked to merit pay.
D) They are more credible to the recipient.
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Chapter 11: Designing Performance Pay Plans
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Q1) Which condition makes a gain-sharing plan NOT viable and requires you to consider another option?
A) No valid historical benchmark can be set.
B) Employee involvement is not an integral part of the system.
C) The plan involves large expenditures to implement.
D) Employees receive only 50 percent of the share.
Q2) Historically,which group has received the most access to stock options?
A) top executives
B) human resource managers
C) full-time employees
D) unionized employees
Q3) Which bonus allocation method best supports the philosophy of gain sharing?
A) Everyone receives an equal share after minor adjustments are made for time worked.
B) Higher performers receive a greater share.
C) Higher-paid employees receive a greater share.
D) Part-time and newly hired employees receive nothing.
Q4) Identify the fundamental ways in which gain-sharing and goal-sharing plans differ.
Q5) Identify how design issues for stock plans differ for private corporations.
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Chapter 12: Designing Indirect Pay Plans
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Q1) Ricardo has worked for a local company for the last 25 years.Upon retirement,Ricardo has been guaranteed a salary of $2,000.00 per month under the company's retirement plan.What kind of retirement benefit program is this company using?
A) defined contribution plan
B) tax-deferred plan
C) defined benefit plan
D) registered retirement savings plan
Q2) What is the first issue in developing an effective benefit system?
A) determining the tax implications
B) examining the compensation cost structure of the organization
C) establishing the administration process
D) determining the role of indirect pay in compensation strategy
Q3) Providing which benefit will reinforce your strong commitment to helping your employees balance work and personal activities?
A) group banking package discount rates
B) paid time off for community service
C) subsidized meals and free hot drinks
D) computer purchase plan
Q4) Identify and briefly explain the most common and important employee services.
Page 14
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Chapter 13: Activating and Maintaining an Effective Compensation System
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Q1) A good employee threatens to leave your firm because she has received a higher pay offer from a competitor.The offer is well outside your company's pay range for the job the employee is performing.What should you tell the employee?
A) You will match the other offer.
B) You will beat the other offer to be sure you won't lose her.
C) You will try to get her job put into a higher pay grade.
D) You wish her all the best in her new job with the competitor.
Q2) Which statement does NOT support the notion of outsourcing some human resource functions to third-party service providers?
A) It provides internal staff with a better sense of issues facing employees.
B) It reduces costs.
C) It leverages the specialized knowledge of external experts.
D) It allows internal staff to focus on strategic human resource activities.
Q3) Identify and describe the steps necessary for implementing a compensation system.
Q4) Discuss the advantages and disadvantages of outsourcing compensation administration,as well as the factors involved in deciding outsourcing policy.
Q5) What are the primary areas for computer applications in a compensation system?
Page 15
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