Human Resource Management Practice Exam
Course Introduction
Human Resource Management is an essential course that introduces students to the foundational principles and practices involved in effectively managing people within organizations. The course explores key topics such as recruitment and selection, training and development, performance appraisal, compensation and benefits, labor relations, and legal aspects of employment. Emphasis is placed on strategic HRM, ethical considerations, and the role of human resources in fostering a positive organizational culture and achieving business objectives. Students will develop a comprehensive understanding of contemporary challenges in HR, including diversity, technology, and global workforce issues, preparing them for proficient HR roles in a variety of organizational settings.
Recommended Textbook
Strategic Compensation in 5th Canada Edition by Richard Long
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Page 2
Chapter 1: A Road Map to Effective Compensation
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Q1) As head of the human resources department for a new company, you have been asked to formulate a compensation strategy. What do you need to determine first?
A) the role that compensation will play in the reward system
B) the correct mix of performance and base pay
C) the total amount of compensation to be provided
D) the role the reward system will play in the compensation strategy
Answer: A
Q2) Explain the difference between a "reward strategy" and a "compensation strategy."
Answer: A reward strategy is the plan for the mix of all of the financial and nonfinancial rewards of work (i.e., the mix of extrinsic and intrinsic rewards) the organization plans to provide to its employees, along with the means through which they will be provided. Used to create the reward system, this design plan needs to be determined before the compensation strategy. The compensation strategy is one part of the reward strategy and is used to create the compensation system (which is the economic or monetary part of the reward system). The compensation strategy is the plan for mix and total amount of financial returns, tangible services, and benefits employees receive as part of the employment relationship.
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Page 3
Chapter 2: A Strategic Framework for Compensation
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Q1) You are in the process of designing a new reward system for your firm. What is the most important single determinant of what will or will not be a successful reward system for your firm?
A) the particular managerial strategy used
B) the interrelationships among the structural variables
C) corporate strategy
D) competitive advantage
Answer: A
Q2) An organization's domain is simply another term for managerial strategy or plan.
A)True
B)False
Answer: False
Q3) Which of the following characteristics are common in a classical organization?
A) joint employee-management planning and goal setting
B) intrinsic rewards often being used as a reward system
C) loyal employees who are dedicated to the norms of the organization
D) strong management control over employees
Answer: D
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4
Chapter 3: A Behavioural Framework for Compensation
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Q1) Which of the following scenarios best describes the notion of expectancy, according to the expectancy theory of motivation?
A) Paul believes he can complete the project in five days.
B) Paul is under the impression that even if he finishes the project in five days, the company will not provide him with the promised promotion.
C) Paul does not value the promised promotion.
D) Paul would like to be recognized as a valued employee by being given a large pay increase.
Answer: A
Q2) Summarize the consequences of each job attitude.
Answer: Job satisfaction can lead to decreased work stress, decreased grievances, decreased absenteeism, decreased turnover, and positive group norms. Work motivation leads to job effort, which should lead to task performance. Organizational identification leads to positive group norms, cooperative behaviour, innovative behaviour, increased job effort, and decreased grievances, absenteeism, and turnover. All of these attitudes are desirable, but how important they are to a given firm depends on the nature of the firm and the managerial strategy.
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Chapter 4: Components of Compensation Strategy
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Q1) Which statement best describes the difference between pay for knowledge systems (PKS) and job-based pay systems?
A) Pay for knowledge systems involve basing pay on the capabilities of individuals, and job-based pay is based on the characteristics of the job.
B) Pay for knowledge systems are applied to managerial employees, and job-based pay is applied to operational-level employees.
C) Pay for knowledge systems are more widely used by Canadian firms than job-based pay systems,
D) Pay for knowledge systems involve low training costs and are easier to administer than job-based pay systems,
Q2) A flexible benefits system with cost sharing on individual benefits is a good fit for which type of firm?
A) human relations firm
B) high-involvement firm
C) classical firm
D) firm with no managerial strategy
Q3) Briefly explain the three methods for establishing base pay.
Q4) Identify and briefly describe the issues in developing a skill-based pay system.
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Page 6
Chapter 5: Performance Pay Choices
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Q1) Your employer is considering tying the bonus pool to the firm's profitability and then allocating this amount to employees based on individual merit. With reference to expectancy theory, which component of the merit system will be weakened and thus make it less motivational for you as an employee?
A) valence
B) expectancy
C) instrumentality
D) effort
Q2) Unions generally oppose profit-sharing plans on the basis of potential manipulation of profits by management and the uncertainty associated with profit sharing when compared with base pay.
A)True
B)False
Q3) When should the proportion of base pay relative to commission be higher?
A) the more that each salesperson works independently of others
B) the shorter the length of the sales cycle
C) the greater the concern for high turnover
D) the higher the degree of persuasive skills required
Q4) Identify and briefly define each of the three types of employee stock plans.
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Chapter 6: Formulating the Reward and Compensation Strategy
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Q1) Jurisdiction over labour markets is primarily within the realm of the federal government of Canada.
A)True
B)False
Q2) Before adopting a compensation strategy, it must be able to pass through three screens: affordability, legality, and employee attraction.
A)True
B)False
Q3) Which method involves using a "what if" scenario to determine which compensation-level strategy is most efficient for your organization?
A) cost-benefit analysis
B) market share analysis
C) trial analysis
D) utility analysis
Q4) What does utility analysis help managers determine?
A) minimum changes in outcomes required for the new policy to pay off
B) which compensation mix policy is most efficient
C) the utility of different types of task behaviour
D) which managerial strategy will be most efficient for a firm
and
Chapter 7: Evaluating Jobs: The Job Evaluation Process
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Q1) Carlos decides to use a time-and-motion study to gather information about a particular job. What kind of job analysis method is Carlos using?
A) observations
B) interviews
C) questionnaires
D) functional job analysis
Q2) The textbook introduces four main approaches to conducting job analysis. Which of the following approaches would you NOT likely use to collect information on the teller role at an existing Canadian bank?
A) Observe several bank tellers performing their jobs.
B) Perform a functional job analysis.
C) Interview several tellers at a local branch.
D) Provide questionnaires to several tellers.
Q3) There are four main methods of conducting job analysis, which include: interviews, observation, questionnaires, and functional job analysis.
A)True
B)False
Q4) What should a job description contain if it is to be useful for job evaluation?
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9
Chapter 8: Evaluating Jobs: The Point Method of Job Evaluation
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Q1) The first key issue in establishing pay ranges is what width the ranges should be. A)True
B)False
Q2) After plotting a regression (market line), you determine that the slope is very steep. What possible conclusion can you make from observing the slope of the regression line?
A) The correlation coefficient is approaching -1 (negative one).
B) There is too much spread in job evaluation points between low-value and high-value jobs.
C) There is not sufficient spread in job evaluation points between low-value and high-value jobs.
D) Lower-value jobs appear to be compensated above market rates.
Q3) Which of the following compensable factors 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
Q4) What criteria are used to determine movement through the pay range?
Page 10
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Chapter 9: Evaluating the Market
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Q1) Which of the following characteristics is NOT typically considered in the selection of market comparator firms?
A) the type of product or service the firm provides
B) whether the firm has achieved pay equity
C) whether the firm is union or non-union
D) the geographic area over which it operates
Q2) Which of the following statements refers to compa-ratio?
A) It is calculated by averaging the pay ranges in the quartiles.
B) It is a measure of pay dispersion across employers.
C) It is derived by dividing mean base pay by the midpoint of the pay range.
D) It is a calculation based on average base pay for each job.
Q3) Which of the following measures can be used to assess the central tendency of pay?
A) dispersion
B) standard deviation
C) quartiles and deciles
D) mean
Q4) Discuss some of the advantages and disadvantages of in-house surveys.
Q5) Briefly describe the process for analyzing and interpreting survey data.
Q6) Briefly discuss some of the limitations of compensation surveys.
Page 11
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Chapter 10: Evaluating Individuals
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Q1) Which of the following statements 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.
Q2) What performance appraisal method requires that management identify specific characteristics relevant to good job performance, and is described as simplistic, while suffering from reliability and validity issues?
A) behavioural observation scales
B) management by objectives
C) behaviourally anchored rating scales
D) graphic rating scales
Q3) Which source is much less accurate in assessing the performance of managers?
A) peers
B) professional raters
C) subordinates
D) supervisors
Q4) Define and describe the key elements of performance management.
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Chapter 11: Designing Performance Pay Plans
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Q1) Which of the following would you consider NOT to be "best practice" when designing nonmonetary reward plans?
A) For large organizations, the usage of an elected committee of employees and managers should be considered when providing significant rewards to employees.
B) A champion or group of champions should be considered to keep the program "alive."
C) Whenever possible, reward only those employees in the top 10 percent.
D) Whenever possible, all deserving employees should be recognized.
Q2) Which of the following statements regarding profit-sharing plans is NOT correct?
A) Deferred profit-sharing plans (DPSPs) need to be registered with the federal government.
B) So called "top-hat" plans are often widely available to all employees, thus making them eligible for registration as a DPSP.
C) Income generated by a DPSP is tax exempt until such time as the employee cashes in the plan.
D) The majority of Canadian profit-sharing plans are cash-based plans.
Q3) Discuss the key issues in designing a nonmonetary reward plan.
Q4) Briefly describe the Scanlon Plan.
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13
Chapter 12: Designing Indirect Pay Plans
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Q1) Offering free onsite massages during peak times, fitness club memberships, and Internet stations in lounge areas are examples of which type of employee services?
A) work-life balance
B) outplacement services
C) employee assistance programs
D) wellness and recreational
Q2) As a result of a recent human resource audit, it was determined that a particular company has an "underfund liability" associated with its retirement plan, requiring an immediate injection of cash. What type of pension plan or retirement plan is this company likely using?
A) hybrid flexible plan
B) registered retirement savings plan (RRSP)
C) mandatory retirement plan
D) defined benefit plan
Q3) One drawback associated with outsourcing routine benefits administration is the notion that employers will begin to lose touch with benefit needs and issues important to employees.
A)True
B)False
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Page 14
Chapter 13: Activating and Maintaining an Effective Compensation System
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Q1) What is a major issue for most organizations when planning for information technology?
A) whether to use computers
B) whether to use consultants
C) how advanced the system should be
D) whether to protect employee privacy
Q2) In the bottom-up approach to compensation budgeting, an arbitrary amount is allocated to compensation and given to department managers for distribution to their employees.
A)True
B)False
Q3) Integrated human resource information systems can support and increase efficiencies associated with many routine activities once performed by human resource personnel. Which of the following activities is NOT conducive to automation via computer systems?
A) computing market lines and pay policies
B) determining the relative value of jobs
C) labour market data analysis
D) online surveys of employee attitudes
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Q4) Identify the tasks involved in preparing to implement a compensation system.