Chapter 02-HRM

Chapter 02
Trends in Human Resource Management

True / False Questions
 1. An individual who is actively seeking employment is a part of an organization's external
labor market.
True False
 2. It is generally seen that worker performance and learning suffer heavily as a result of
aging. True False
 3. Individuals who arrive in the United States without meeting the legal requirements for
immigration or asylum are referred to as undocumented immigrants.
True False
 4. Most organizations are looking for educational achievements to find employees who can
handle a variety of responsibilities, interact with customers, and think creatively.
True False
 5. A large gap exists between the social system and the technical system in high-performance
work systems.
True False
 6. The Bureau of Labor Statistics forecasts that between 2008 and 2018, most new jobs will
be in manufacturing.
True False
 7. Knowledge workers in an organization do not work directly with customers.
True False
 8. Skilled knowledge workers would suffer the most in a slow economy as they have little
operational importance in a company.
True False
 9. The use of employee empowerment shifts the recruiting focus away from general cognitive
and interpersonal skills toward technical skills.
True False
 10. Virtual teams rely on communications technology such as videoconferences, e-mail, and
cell phones to keep in touch and coordinate activities.
True False
 11. The traditional role of HRM as primarily an administrative function has gradually given
way to a new role—that of strategic partner.
True False
 12. Total quality management is intended to bring about a continuous process of quality
improvement.
True False
 13. Total quality management proposes that every employee in the organization receive
training in quality.
True False
 14. One of the core values of TQM is that methods and processes are designed to meet the
needs of internal customers rather than those of external customers.
True False
 15. When forming Citigroup, Citicorp combined its banking business with Traveller's Group's
insurance business. This is an example of a merger.
True False
 16. Early-retirement programs are a strategy used by organizations undergoing downsizing.
True False
 17. According to research, early-retirement programs are one of the most effective approaches
to downsizing.
True False
 18. An organization's critical work processes are not altered during a reengineering process.
True False
 19. A company that operates in the U.S. shifts its warehouses and operations to a low rent
area that is 50 miles away from town. This is an example of offshoring.
True False
 20. Offshoring refers to moving the operations from the country where a company is
headquartered to a country where pay rates are lower but the necessary skills are available. True
False
 21. The processing and transmission of digitized HR information is called electronic human
resource management.
True False
 22. Under the new psychological contract, organizations expect employees to contribute time,
effort, skills, abilities, and loyalty in return for job security and opportunities for promotion
within the organization.
True False
 23. Employees' job security has increased as a result of the new psychological contract. True
False
 24. Contract company workers are employed directly by a company.
True False
 25. The globalization of the world economy and the development of e-commerce have
reinforced the concept of a 40-hour workweek.
True False
Multiple Choice Questions

 26. The external labor market in an organization refers to the:
 A. contracted workers in the organization.
 B. laid-off employees of the organization.
 C. individuals who are actively seeking employment.
 D. employees who have direct contact with customers.
 E. employees of the immediate competitors of the organization.
 27. Which of the following statements best explains the term "labor force"?
 A. All the permanent employees of an organization.
 B. All those who have contracted to work for the company.
 C. All the adult members of a population.
 D. All the temporary workers of an organization.
 E. All the people willing and able to work.
 28. Which of the following authorities is responsible for tracking changes in the composition
of the U.S. labor force and in forecasting employment trends?
 A. National Statistics Association
 B. Occupational Outlook Bureau
 C. U.S. Census Bureau
 D. Bureau of Labor Analysis
 E. Bureau of Labor Statistics
 29. The fastest growing segment of the labor force is expected to be between the ages of:
 A. 16 to 24.
 B. 25 to 35.
 C. 36 to 45.
 D. 46 to 54.
 E. 55 and older.
 30. Which of the following statements about the composition of the U.S. labor force during
the next decade is true?
 A. The labor force is expected to grow at a greater rate than at any other time in U.S. history.
 B. The largest proportion of the labor force is expected to be in the 16- to 25-year age group.
 C. For the first time ever, the number of workers under 40 years of age will exceed the
number of workers 40 years of age or older.
 D. Despite a small increase in the number of young workers, the overall workforce will be
aging.
 E. The total cost of labor in the United States would considerably decrease.
 31. Which of the following is a major problem associated with aging?
 A. Older workers present challenges related to costs of health care.
 B. Older workers are not capable of learning new technology.
 C. Older workers do not want to work.
 D. The learning process suffers due to aging.
 E. Worker performance suffers due to aging.
 32. Which of the following form the majority of the U.S. labor force?
 A. African-Americans
 B. Whites
 C. Hispanics
 D. Asians
 E. Europeans
 33. Which of the following is the fastest growing category in the U.S. labor force?
 B. Australians
 C. Whites
 D. Asian and other groups
 E. Europeans
 34. Employers' support for immigration to the United States can be attributed to the fact that:
 A. there is lack of adequate technology in the country.
 B. regulation is not strong enough to control undocumented immigration.
 C. qualified technical workers are scarce in the United States.
 D. there is increased support from the government also.
 E. U.S. workers are not open to innovation.
 35. Managing cultural diversity involves:
 A. forming different pay structures for various groups.
 B. creating separate career tracks for employees with families.
 C. avoiding the use of affirmative action policies.
 D. reducing cultural diversity by selective hiring.
 E. encouraging career development for women and minorities.
 36. Which of the following skills are more actively sought by U.S. employers today?
 A. Physical strength
 B. Mastery of particular machinery
 C. Mathematical skills
 D. Ability to perform routine tasks
 E. Ability to work with a tool
 37. Today's employees must be able to handle a variety of responsibilities, interact with
customers, and think creatively. To find such employees, most organizations are looking for:
 A. basic psychomotor skills.
 B. employees in competitors' work locations.
 C. highly experienced employees.
 D. older employees.
 E. educational qualifications.
 38. Which of the following describes organizations with the best possible fit between their
social system and their technical system?
 A. Optimal production systems
 B. Holistic management systems
 C. Optimal service systems
 D. High-performance work systems
 E. Total quality management systems
 39. Which of the following is a trend that is seen in today's high-performance work systems?
 A. Mismatches in technical system and social system
 B. Employee empowerment in decision making
 C. Increase in individual assignments
 D. Centralized decision making
 E. Reduced reliance on knowledge workers
 40. How has the requirement for creating high-performance work systems changed?
 A. Customers are demanding cheaper, standardized products.
 B. Employees prefer implementation of 40-hour work weeks.
 C. Competitors are looking for ways to standardize prices in their respective industries.
 D. Employers are looking for ways to tap people's creativity and interpersonal skills.
 E. Customers are demanding standardized products over customized products.
 41. The Bureau of Labor Statistics forecasts that between 2008 and 2018, most new jobs will
be in:
 A. service occupations.
 B. the primary sector.
 C. agriculture.
 D. the secondary sector.
 E. manufacturing.
 42. According to data published by the Bureau of Labor Statistics, which of the following
occupations is projected to add the most number of jobs before 2018?
 A. Office clerks
 B. Registered nurses
 C. Pilots
 D. Retail salespersons
 E. Production workers
 43. Skilled knowledge workers:
 A. would have less power in the organization.
 B. would suffer the most in a slow economy.
 C. cannot be replaced easily.
 D. never work directly with customers.
 E. rarely have a college degree.
 44. The reliance on knowledge workers also affects organizations' decisions about the kinds
of people they are recruiting and selecting leading them to emphasize on:
 A. specific job skills.
 B. foundation skills.
 C. arithmetical skills.
 D. general cognitive skills.
 E. operative skills.
 45. Employee empowerment is defined as:
 A. the movement of women and minorities into managerial positions.
 B. providing increased salary and benefits to the employees.
 C. leading employees by the strength of one's charisma.
 D. the act of continually learning and improving one's skills and abilities.
 E. giving employees responsibility and authority to make decisions.
 46. What effect does the use of employee empowerment have on recruiting?
 A. It has created an international labor market.
 B. It has substantially enhanced employment opportunities for women and minorities.
 C. It has shifted the focus away from technical skills to general cognitive and interpersonal
skills.
 D. It has significantly reduced recruiting costs.
 E. It has made the recruitment process less time consuming than before.
 47. How can HRM practices help employee empowerment?
 A. Jobs must be designed such that managers have control over business processes.
 B. Mangers should encourage employees to communicate with staff throughout the
organization.
 C. Pay and other rewards should reflect employees' loyalty to the organization.
 D. Managers should provide feedback only during the employee performance review.
 E. Employees' roles and responsibilities must be narrowed.
 48. Full involvement in one's work and commitment to one's job and company is referred to
as:
 A. employee engagement.
 B. employee empowerment.
 C. employee appraisal.
 D. job enrichment.
 E. job enlargement.
 49. Teamwork is:
 A. the assignment of work to groups of employees with various skills who interact to
assemble a product.
 B. giving employees responsibility and authority to make decisions regarding all aspects of
product development.
 C. having the best possible fit between an organization's social system and technical system.
 D. a companywide effort to continuously improve the ways people, machines, and systems
accomplish work.
 E. providing employees the opportunity to grow, thereby achieving organizational goals.
 50. Teams that rely on communications technology such as videoconferences, e-mail, and cell
phones to keep in touch and coordinate activities are referred to as:
 A. associate teams.
 B. electronic teams.
 C. virtual teams.
 D. self-managed teams.
 E. technological teams.
 51. Increasingly, HR professionals are being viewed as:
 A. legal compliance officers.
 B. an administrative unit or function.
 C. experts in designing and delivering HR systems.
 D. recruitment officers.
 E. strategic partners.
 52. Which of the following terms describes a companywide effort to continuously improve
the way people, machines, and systems accomplish work?
 A. Business reengineering
 B. Total quality management
 C. High-performance work system
 D. Optimal performance system
 E. Performance management
 53. Which of the following statements is NOT consistent with the core values of TQM?
 A. The organization promotes cooperation with vendors, suppliers, and customers to improve
quality and hold down costs.
 B. TQM processes are designed to meet the needs of internal and external customers.
 C. Only a few selected managers should receive training in quality.
 D. Managers measure progress with feedback based on data.
 E. Quality is designed into a product or service so that errors are prevented from occurring.
 54. According to the principles of total quality management:
 A. the feedback process should be initiated only after a significant quality improvement.
 B. human resource managers have a diminished role since the emphasis is on quality alone.
 C. only key personnel receive training in quality.
 D. errors in a product or service should be prevented before occurrence.
 E. internal customers are more valuable than external customers.
 55. When two companies join forces and become one entity, it is termed a:
 A. partnership.
 B. merger.
 C. consolidation.
 D. joint venture.
 E. strategic alliance.
 56. A chemical company buys a medical equipment manufacturing company. This can be
referred to as a(n):
 A. acquisition.
 B. partnership.
 57. Some mergers and acquisitions result in _____ within an industry, meaning that two firms
in one industry join to hold a greater share of the industry.
 A. consolidation
 B. take-over
 C. a joint venture
 D. a partnership
 E. a strategic alliance.
 58. In 1999, Glaxo Wellcome and SmithKline Beecham combined their businesses to create a
new company, GlaxoSmithKline. This is an example of a(n):
 A. acquisition.
 B. take-over.
 C. partnership.
 D. strategic alliance.
 E. merger.
 59. Which of the following is a challenge for HRM during mergers?
 A. Scrutinizing balance sheets
 B. Evaluating the financial worth of the new company
 C. Developing competitively priced products
 D. Developing conflict resolution skills among employees
 E. Sustaining the brand image of the company
 60. The HRM function during downsizing is to terminating the workers who:
 A. are less valuable in their performance.
 B. have the least experience in the industry.
 C. have spent the least amount of time with the organization.
 D. are older than the other employees.
 E. are being paid the highest salaries.
 61. As a method of downsizing, early-retirement programs have been shown to be:
 A. humane.
 B. linked to greater employee suffering and distress.
 C. a better alternative to the "grenade" approach.
 D. suited to distinguish clearly between good and poor performers.
 E. by far the most effective.
 62. When an organization undertakes a complete review of its critical work processes to make
them more efficient and to be able to deliver higher quality, it is engaging in:
 A. outsourcing.
 B. high-performance work system design.
 C. reengineering.
 D. total quality management.
 E. reverse engineering.
 63. Which of the following observations about reengineering is true?
 A. It is primarily concerned with production processes.
 B. Critical processes are not altered during this process.
 C. Changing customer needs and technologies necessitate reengineering.
 D. It has no impact on human resource practices and systems.
 E. It is an effort to continually improve the ways systems accomplish work.
 64. The practice of having another company provide services is known as:
 A. outsourcing.
 B. downsizing.
 C. empowerment.
 D. benchmarking.
 E. reengineering.
 65. Offshoring is defined as:
 A. a practice of having another company provide services.
 B. moving operations from the country where a company is headquartered to a country where
pay rates are lower but the necessary skills are available.
 C. a method of staffing other than the traditional hiring of full-time employees.
 D. a complete review of the organization's critical work processes to make them more
efficient and able to deliver higher quality.
 E. the act of acquiring a new company in a distant location or another country in order to
acquire higher market share or growth.
 66. When large U.S. software companies like IBM and Microsoft open facilities in India to
take advantage of the highly skilled labor available there at lower pay rates, they are engaging in:
 A. consolidation.
 B. outsourcing.
 C. empowerment.
 D. sustainability initiatives.
 E. offshoring.
 67. The largest number of immigrants to the U.S. workforce are from:
 A. Africa.
 B. Asia.
 C. North America.
 D. Europe.
 E. Central America.
 68. Which of the following is the reason why more organizations are looking overseas to hire
talented people?
 A. Lack of technology in the U.S.
 B. Lack of skilled labor in the U.S.
 C. Poor quality of labor in the U.S.
 D. Governmental pressure to do so
 E. Low cost of labor in foreign countries
 69. Employees who take assignments in other countries are called:
 A. knowledge workers.
 B. immigrants.
 C. external employees.
 D. expatriates.
 E. emigrants.
 70. Which of the following terms refers to a computer system used to acquire, store,
manipulate, analyze, retrieve, and distribute information related to an organization's human
resources?
 A. Electronic performance support systems
 B. e-CRM
 C. High-performance work systems
 D. Self-service systems
 E. HRIS
 71. How does a human resource information system help the organization?
 A. It can be used to scrutinize balance sheets.
 B. It can be used to develop new lines of products.
 C. It can be used to provide employee coaching.
 D. It can help avoid litigation and lawsuits.
 E. It can used by salespeople to improve targeting.
 72. An Internet portal is used to:
 A. combine data from several sources into a single site.
 B. consolidate different HR functions into a single location.
 C. process all HR transactions at one time.
 D. obtain insight into business trends.
 E. improve business decisions.
 73. A(n) _____ provides insight into business trends and patterns and helps businesses
improve decisions.
 A. electronic performance support systems
 B. Internet portal
 C. shared service center
 D. application service provider
 E. business intelligence system
 74. Which of the following technologies lets a company rent space on a remote computer
system and use the system's software to manage its HR activities, including security and
upgrades?
 A. Application service providers
 B. Internet portals
 C. Shared service centers
 D. Business intelligence systems
 E. Electronic performance support systems
 75. Which of the following can be used to consolidate different HR functions into a single
location, eliminate redundancy, and reduce administrative costs?
 A. Internet portals
 B. Application services
 76. What was one of the reasons for the failure of many start-up Internet-based organizations?
 A. The companies were founded by young people.
 B. The organization culture was based on policies and procedures.
 C. Excessive funding from venture capitalists.
 D. Heated competition from established organizations.
 E. Lack of governmental support and legal costs.
 77. The processing and transmission of digitized HR information, especially using computer
networking and the Internet, is known as:
 A. electronic human resource management.
 B. application sharing.
 C. electronic performance systems.
 D. reengineering.
 E. business intelligence.
 78. Which of the following is an implication of e-HRM for the HRM practice of analysis and
design of work?
 A. Job openings can be posted online and candidates can apply for jobs online.
 B. Online learning can bring training to employees anywhere, anytime.
 C. Online simulations, including tests, videos, and e-mail, can measure job candidates' ability
to deal with real-life business challenges.
 D. Employees in geographically dispersed locations can work together in virtual teams using
video, e-mail, and the Internet.
 E. Employees can review salary and bonus information and seek information about and enroll
in benefit plans.
 79. A great deal of HR information is confidential and not suitable for posting on a Web site
for everyone to see. One solution is to set up e-HRM on ____, which is a network that uses
Internet tools but limits access to authorized users in the organization.
 A. a website
 B. an intranet
 C. third-party services
 D. a shared service center
 E. Internet portals
 80. A system in which employees have online access to information about HR issues and go
online to enroll themselves in programs and provide feedback through surveys is termed:
 A. e-HR management.
 B. payroll automation.
 C. job enrichment.
 D. employee empowerment.
 E. self-service.
 81. If, as a plant manager, you entered the question "Can we change working hours?" into the
company's intranet search and received feedback on the company's policies regarding work
hours, plus state and federal guidelines, summaries of relevant laws, model documents, and new
reports concerning alternative work schedules, you would probably be using a(n):
 A. virtual team network.
 B. performance management system.
 C. business-to-business Internet service.
 D. self-service system.
 E. Internet portal.
 82. What is an HR dashboard?
 A. A messaging system used by HR managers to communicate with employees.
 B. A display of how the company is performing on specific HR metrics.
 C. A tool used to measure the profitability and growth rate of the organization.
 D. A computer system used to acquire, store, manipulate, analyze, retrieve, and distribute HR
information.
 E. A system used to store, analyze, and process the information regarding the employees of an
organization.
 83. The relationship between employer and employee can be thought of in terms of a(n) ____,
a description of what an employee expects to contribute in an employment relationship and what
the employer will provide the employee in exchange for those contributions. Unlike a written
sales contract, this is not formally put into words.
 A. employee covenant
 B. social agreement
 C. psychological contract
 D. employment bond
 E. explicit agreement
 84. Which of the following is a disadvantage of the new psychological contract?
 A. It has resulted in reduced job security.
 B. Companies have become less innovative.
 C. Work schedules have become less flexible.
 D. Employees have less control over how they work.
 E. Training and development opportunities have reduced.
 85. The new type of psychological contract has resulted in reduced:
 A. creativity.
 B. employee compensation.
 C. flexibility.
 D. training and development opportunities.
 E. job security.
 86. Employees realize that many companies are no longer able to provide long-term
employment security. Instead, the employees now want:
 A. increased pay.
 B. less demanding work.
 C. employability.
 D. written employment contracts.
 E. additional benefits.
 87. The use of independent contractors, on-call workers, temporary workers, and contract
company workers, all constitute:
 A. outsourcing.
 B. alternative work arrangements.
 D. high performance work systems.
 E. offshoring.
 88. Independent contractors are:
 A. usually full-time company employees.
 B. self-employed individuals with multiple clients.
 C. people employed by a temporary agency.
 D. employed directly by a company for a specific time.
 E. people employed by the company to work on an independent project.
 89. Henry is a human resource consultant who runs and operates his own business from his
home. He is often hired by businesses to present one- or two-day workshops on various topics
within his field of expertise. Henry is a(n):
 A. on-call worker.
 B. agent.
 C. temporary employee.
 D. contract company worker.
 E. temporary worker.
 90. _____ are employed by a temporary agency; client organizations pay the agency for the
services of these workers.
 A. On-call workers
 B. Independent contractors
 C. Temporary workers
 D. Contract company workers
 E. Part-time workers
Essay Questions
 91. Define labor force. Distinguish between internal labor force and external labor market.
 92. Discuss three major trends in the composition of the labor market and their impact on HR
practices.
 93. What sorts of activities does managing cultural diversity involve, and to what degree do
HR professionals believe these activities are beneficial in maintaining a competitive advantage?
 94. Explain the problem of skill deficiencies in the U.S. workforce.
 95. Explain the impact of knowledge workers on the requirements for creating a high-
performance work system.
 96. What is employee empowerment and what type of training must be conducted to make it
effective?
 97. What are the core values of total quality management?
 98. What is outsourcing? What are the trends in HR outsourcing?
 99. Define electronic human resource management and indicate its implications for five HRM
practices.
 100. What is the "new" psychological contract? What are its implications?
Chapter 02 Trends in Human Resource Management Answer
Key
True / False Questions
 1. (p. 29) An individual who is actively seeking employment is a part of an organization's
external labor market.
TRUE
An organization's external labor market refers to the individuals who are actively seeking
employment.
AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 02-01 Describe trends in the labor force composition and how they affect human resource management. Topic: Change in the Labor Force
 2. (p. 30) It is generally seen that worker performance and learning suffer heavily as a result
of aging.
FALSE
Despite myths to the contrary, worker performance and learning do not suffer as a result of
aging.
AACSB: Analytic Bloom's: Understand Difficulty: Medium
Learning Objective: 02-01 Describe trends in the labor force composition and how they affect human resource management. Topic: An Aging Workforce
 3. (p. 31) Individuals who arrive in the United States without meeting the legal requirements
for immigration or asylum are referred to as undocumented immigrants.
TRUE
More than 1 million immigrants come to the United States legally each year as relatives of U.S.
citizens, on work- or study-related visas, and other means. Other foreign-born workers in the
United States arrive in this country without meeting the legal requirements for immigration or
asylum. These individuals, known as undocumented or illegal immigrants, likely number in the
millions.
AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 02-01 Describe trends in the labor force composition and how they affect human resource management. Topic: A Diverse Workforce
 4. (p. 33) Most organizations are looking for educational achievements to find employees
who can handle a variety of responsibilities, interact with customers, and think creatively.
TRUE
Today's employees must be able to handle a variety of responsibilities, interact with customers,
and think creatively. To find such employees, most organizations are looking for educational
achievements. A college degree is a basic requirement for many jobs today.
AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 02-01 Describe trends in the labor force composition and how they affect human resource management. Topic: Skill Deficiencies of the
Workforce
 5. (p. 34) A large gap exists between the social system and the technical system in high-
performance work systems.
FALSE
High-performance work systems refer to organizations that have the best possible fit between
their social system and technical system.
AACSB: Analytic Bloom's: Remember Difficulty: Easy
Learning Objective: 02-02 Summarize areas in which human resource management can support
the goal of creating a high performance work system.
Topic: High-Performance Work Systems
 6. (p. 34) The Bureau of Labor Statistics forecasts that between 2008 and 2018, most new
jobs will be in manufacturing.
FALSE
The Bureau of Labor Statistics forecasts that between 2008 and 2018, most new jobs will be in
service occupations, especially food preparation, education, and health services.
Topic: Knowledge Workers
 7. (p. 35-36) Knowledge workers in an organization do not work directly with customers.
FALSE
Many knowledge workers will have to be "techno-service" workers who not only know a
specialized field such as computer programming or engineering but also must be able to work
directly with customers.
 8. (p. 36) Skilled knowledge workers would suffer the most in a slow economy as they have
little operational importance in a company.
FALSE
Knowledge workers are in a position of power, because they own the knowledge that the
company needs in order to produce its products and services. Skilled knowledge workers have
many job opportunities, even in a slow economy. If they choose, they can leave a company and
take their knowledge to another employer. Replacing them may be difficult and time consuming.
AACSB: Analytic Bloom's: Understand Difficulty: Easy
 9. (p. 37) The use of employee empowerment shifts the recruiting focus away from general
cognitive and interpersonal skills toward technical skills.
FALSE
As with the need for knowledge workers, use of employee empowerment shifts the recruiting
focus away from technical skills and toward general cognitive and interpersonal skills.
AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 02-03 Define employee empowerment; and explain its role in the modern organization. Topic: Employee Empowerment
 10. (p. 37) Virtual teams rely on communications technology such as videoconferences, e-

mail, and cell phones to keep in touch and coordinate activities.
TRUE
Virtual teams are teams that rely on communications technology such as videoconferences,
email, and cell phones to keep in touch and coordinate activities.
AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 02-03 Define employee empowerment; and explain its role in the modern organization. Topic: Teamwork
 11. (p. 38) The traditional role of HRM as primarily an administrative function has gradually
given way to a new role—that of strategic partner.
TRUE
Traditional management thinking treated human resource management primarily as an
administrative function, but managers today are beginning to see a more central role for HRM.
They are looking at HRM as a means to support a company's strategy.
Learning Objective: 02-04 Identify ways HR professionals can support organizational strategies for quality; growth; and efficiency. Topic: Focus on Strategy
 12. (p. 38-39) Total quality management is intended to bring about a continuous process of
quality improvement.
TRUE
Total quality management refers to a companywide effort to continually improve the ways
people, machines, and systems accomplish work.
AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 02-04 Identify ways HR professionals can support organizational strategies for quality; growth; and efficiency. Topic: High Quality Standards
 13. (p. 39) Total quality management proposes that every employee in the organization
receive training in quality.
TRUE
Training in quality for each employee in an organization is a core value of total quality
management.
AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 02-04 Identify ways HR professionals can support organizational strategies for quality; growth; and efficiency. Topic: High Quality Standards
 14. (p. 39) One of the core values of TQM is that methods and processes are designed to meet
the needs of internal customers rather than those of external customers.
FALSE
One of the core values of TQM is that methods and processes are designed to meet the needs of
internal and external customers.
Learning Objective: 02-04 Identify ways HR professionals can support organizational strategies
for quality; growth; and efficiency. Topic: High Quality Standards
 15. (p. 40) When forming Citigroup, Citicorp combined its banking business with Traveller's
Group's insurance business. This is an example of a merger.
TRUE
When two companies become one it is referred to as a merger.
for quality; growth; and efficiency. Topic: Mergers and Acquisitions
 16. (p. 42) Early-retirement programs are a strategy used by organizations undergoing
downsizing.
TRUE
Early-retirement programs are a humane approach used by organizations undergoing
downsizing.
AACSB: Analytic Bloom's: Understand Difficulty: Easy Learning Objective: 02-04 Identify ways HR professionals can support organizational strategies for quality; growth; and efficiency. Topic: Downsizing
 17. (p. 42) According to research, early-retirement programs are one of the most effective
approaches to downsizing.
FALSE
Early-retirement programs are humane, but they essentially reduce the workforce with a
"grenade" approach—not distinguishing good performers from poor performers but rather
eliminating an entire group of employees. Research indicates that when companies downsize by
offering early-retirement programs, they usually end up rehiring to replace essential talent within
a year.
for quality; growth; and efficiency. Topic: Downsizing
 18. (p. 42) An organization's critical work processes are not altered during a reengineering
process.
FALSE
Reengineering involves a complete review of the organization's critical work processes to make
them more efficient and able to deliver higher quality.
AACSB: Analytic Bloom's: Remember
Difficulty: Easy
for quality; growth; and efficiency. Topic: Reengineering
 19. (p. 44) A company that operates in the U.S. shifts its warehouses and operations to a low
rent area that is 50 miles away from town. This is an example of offshoring.
FALSE
Offshoring refers to moving the operations from the country where a company is headquartered
to a country.
Learning Objective: 02-05 Summarize ways in which human resource management can support
organizations expanding internationally. Topic: Expanding into Global Markets
 20. (p. 44) Offshoring refers to moving the operations from the country where a company is
headquartered to a country where pay rates are lower but the necessary skills are available.
TRUE
Offshoring refers to moving the operations from the country where a company is headquartered
to a country where pay rates are lower but the necessary skills are available.
AACSB: Analytic
Bloom's: Remember Difficulty: Easy
 21. (p. 46) The processing and transmission of digitized HR information is called electronic
human resource management.
TRUE
The processing and transmission of digitized HR information is referred to as electronic human
resource management (e-HRM).
AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 02-06 Discuss how technological developments are affecting human resource management. Topic: Electronic Human Resource Management
 22. (p. 49) Under the new psychological contract, organizations expect employees to
contribute time, effort, skills, abilities, and loyalty in return for job security and opportunities for
promotion within the organization.
FALSE
In the traditional version psychological contract, organizations expected their employees to
contribute time, effort, skills, abilities, and loyalty. In return, the organizations would provide job
security and opportunities for promotion. However, this arrangement is being replaced with a
new type of psychological contract. To stay competitive, modern organizations must frequently
change the quality, innovation, creativeness, and timeliness of employee contributions and the
skills needed to make those contributions.
AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 02-07 Explain how the nature of the employment relationship Topic: A New Psychological Contract
23. (p. 49) Employees' job security has increased as a result of the new psychological contract.
FALSE
The new psychological contract has led to organizational restructuring, mergers and acquisitions,
layoffs, and longer hours for many employees. Employers expect employees to take more
responsibility for their own careers, from seeking training to balancing work and family. These
expectations result in less job security for employees.
24. (p. 50) Contract company workers are employed directly by a company. TRUE
Contract company workers are employed directly by a company for a specific time specified in a
written contract.
AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 02-08 Discuss how the need for flexibility affects human resource management. Topic: Flexibility
25. (p. 51) The globalization of the world economy and the development of e-commerce have
reinforced the concept of a 40-hour workweek.
FALSE
The globalization of the world economy and the development of e-commerce have made the
notion of a 40-hour workweek obsolete. As a result, companies need to be staffed 24 hours a day,
seven days a week.
AACSB: Analytic Bloom's: Understand Difficulty: Easy Learning Objective: 02-08 Discuss how the need for flexibility affects human resource management. Topic: Flexibility
Multiple Choice Questions

 26. (p. 29) The external labor market in an organization refers to the:
 A. contracted workers in the organization.
 B. laid-off employees of the organization.
 C. individuals who are actively seeking employment.
 D. employees who have direct contact with customers.
 E. employees of the immediate competitors of the organization.
The external labor market consists of individuals who are actively seeking employment.
AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 02-01 Describe trends in the labor force composition and how they affect human resource management. Topic: Change in the Labor Force
 27. (p. 29) Which of the following statements best explains the term "labor force"?
 A. All the permanent employees of an organization.
 B. All those who have contracted to work for the company.
 C. All the adult members of a population.
 D. All the temporary workers of an organization.
 E. All the people willing and able to work.
The term "labor force" is a general way to refer to all the people willing and able to work.
AACSB: Analytic Bloom's: Understand Difficulty: Easy Learning Objective: 02-01 Describe trends in the labor force composition and how they affect human resource management. Topic: Change in the Labor Force
 28. (p. 29) Which of the following authorities is responsible for tracking changes in the
composition of the U.S. labor force and in forecasting employment trends?
 A. National Statistics Association
 B. Occupational Outlook Bureau
 C. U.S. Census Bureau
 D. Bureau of Labor Analysis
 E. Bureau of Labor Statistics
In the United States, the Bureau of Labor Statistics (BLS), an agency of the Department of
Labor, tracks changes in the composition of the U.S. labor force and forecasts employment
trends.
AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 02-01 Describe trends in the labor force composition and how they affect human resource management. Topic: An Aging Workforce
 29. (p. 30) The fastest growing segment of the labor force is expected to be between the ages
of: A. 16 to 24.
 B. 25 to 35.
 C. 36 to 45.
 D. 46 to 54.
 E. 55 and older.
From 2008 to 2018, the fastest-growing age group is expected to be workers 55 and older.
AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 02-01 Describe trends in the labor force composition and how they affect human resource management. Topic: An Aging Workforce
 30. (p. 30) Which of the following statements about the composition of the U.S. labor force
during the next decade is true?
 A. The labor force is expected to grow at a greater rate than at any other time in U.S. history.
 B. The largest proportion of the labor force is expected to be in the 16- to 25-year age group.
 C. For the first time ever, the number of workers under 40 years of age will exceed the
number of workers 40 years of age or older.
 D. Despite a small increase in the number of young workers, the overall workforce will be
aging.
 E. The total cost of labor in the United States would considerably decrease.
It is expected that despite a small increase in the number of young workers, the overall
workforce will be aging.
AACSB: Reflective Thinking Bloom's: Understand Difficulty: Easy Learning Objective: 02-01 Describe trends in the labor force composition and how they affect human resource management. Topic: An Aging Workforce
 31. (p. 30) Which of the following is a major problem associated with aging?
 A. Older workers present challenges related to costs of health care.
 B. Older workers are not capable of learning new technology.
 C. Older workers do not want to work.
 D. The learning process suffers due to aging.
 E. Worker performance suffers due to aging.
Despite myths to the contrary, worker performance and learning do not suffer as a result of
aging. Older employees are willing and able to learn new technology. Recruiting and retaining
older workers may present some challenges related to costs of health care and other benefits.
AACSB: Reflective Thinking Bloom's: Understand Difficulty: Easy Learning Objective: 02-01 Describe trends in the labor force composition and how they affect human resource management. Topic: An Aging Workforce
 32. (p. 31) Which of the following form the majority of the U.S. labor force?
 B. Whites
 C. Hispanics
 D. Asians
 E. Europeans
Whites are a dominant group in the U.S. labor force. The 2018 workforce is expected to be 79
percent white.
 33. (p. 31) Which of the following is the fastest growing category in the U.S. labor force?
 B. Australians
 C. Whites
 D. Asian and other groups
 E. Europeans
The fastest-growing category in the U.S. labor force is the Asian and "other groups," category
because these groups are experiencing immigration and birthrates above the national average.
 34. (p. 31) Employers' support for immigration to the United States can be attributed to the
fact that:
 A. there is lack of adequate technology in the country.
 B. regulation is not strong enough to control undocumented immigration.
 C. qualified technical workers are scarce in the United States.
 D. there is increased support from the government also.
 E. U.S. workers are not open to innovation.
In industries such as computer software development, employers say they have difficulty finding
enough qualified U.S. workers to fill technical jobs. These employers are pressing for
immigration laws to allow a greater supply of foreign-born workers.
AACSB: Reflective Thinking Bloom's: Understand Difficulty: Medium Learning Objective: 02-01 Describe trends in the labor force composition and how they affect human resource management. Topic: A Diverse
Workforce
 35. (p. 32) Managing cultural diversity involves:

 A. forming different pay structures for various groups.
 B. creating separate career tracks for employees with families.
 C. avoiding the use of affirmative action policies.
 D. reducing cultural diversity by selective hiring.
 E. encouraging career development for women and minorities.
Managing cultural diversity involves encouraging career development for women and minorities.
AACSB: Diversity Bloom's: Understand Difficulty: Medium Learning Objective: 02-01 Describe trends in the labor force composition and how they affect human resource management. Topic: A Diverse Workforce
 36. (p. 33) Which of the following skills are more actively sought by U.S. employers today?
 A. Physical strength
 B. Mastery of particular machinery
 C. Mathematical skills
 D. Ability to perform routine tasks
 E. Ability to work with a tool
The increasing use of computers to do routine tasks has shifted the kinds of skills needed for
employees in the U.S. economy. Such qualities as physical strength and mastery of a particular
piece of machinery are no longer important for many jobs. More employers are looking for
mathematical, verbal, and interpersonal skills, such as the ability to solve math or other problems
or reach decisions as part of a team.
AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 02-01 Describe trends in the labor force composition and how they affect human resource management. Topic: Skill Deficiencies of the Workforce
 37. (p. 33) Today's employees must be able to handle a variety of responsibilities, interact
with customers, and think creatively. To find such employees, most organizations are looking
for: A. basic psychomotor skills.
 B. employees in competitors' work locations.
 C. highly experienced employees.
 D. older employees.
 E. educational qualifications.
Most organizations are looking for educational achievements to find employees with various
skills.
AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 02-01 Describe trends in the labor force composition and how they affect human resource management. Topic: Skill Deficiencies of the Workforce
 38. (p. 34) Which of the following describes organizations with the best possible fit between
their social system and their technical system?
 A. Optimal production systems
 B. Holistic management systems
 C. Optimal service systems
 D. High-performance work systems
 E. Total quality management systems
High-performance work systems refer to organizations that have the best possible fit between
their social system and technical system.
AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 02-02 Summarize areas in which human resource management can support the goal of creating a high performance
work system. Topic: High-Performance Work Systems
 39. (p. 34) Which of the following is a trend that is seen in today's high-performance work
systems?
 A. Mismatches in technical system and social system
 B. Employee empowerment in decision making
 C. Increase in individual assignments
 D. Centralized decision making
 E. Reduced reliance on knowledge workers
Among the trends that are occurring in today's high-performance work systems are reliance on
knowledge workers, empowerment of employees to make decisions, and use of teamwork.
AACSB: Reflective Thinking Bloom's: Understand Difficulty: Medium
 40. (p. 34) How has the requirement for creating high-performance work systems changed?
 A. Customers are demanding cheaper, standardized products.
 B. Employees prefer implementation of 40-hour work weeks.
 C. Competitors are looking for ways to standardize prices in their respective industries.
 D. Employers are looking for ways to tap people's creativity and interpersonal skills.
 E. Customers are demanding standardized products over customized products.
As the nature of the workforce and the technology available to organizations have changed, so
have the requirements for creating a high-performance work system. Customers are demanding
high quality and customized products, employees are seeking flexible work arrangements, and
employers are looking for ways to tap people's creativity and interpersonal skills.
 41. (p. 34) The Bureau of Labor Statistics forecasts that between 2008 and 2018, most new
jobs will be in:
 A. service occupations.
 B. the primary sector.
 C. agriculture.
 D. the secondary sector.
 E. manufacturing.
service occupations.
 42. (p. 34-35) According to data published by the Bureau of Labor Statistics, which of the
following occupations is projected to add the most number of jobs before 2018?
 A. Office clerks
 B. Registered nurses
 C. Pilots
 D. Retail salespersons
 E. Production workers
service occupations, especially food preparation, education, and health services.
AACSB: Analytic
Bloom's: Remember Difficulty: Easy Learning Objective: 02-02 Summarize areas in which
human resource management can support the goal of creating a high performance
work system. Topic: Knowledge Workers
 43. (p. 36) Skilled knowledge workers:
 A. would have less power in the organization.
 B. would suffer the most in a slow economy.
 C. cannot be replaced easily.
 D. never work directly with customers.
 E. rarely have a college degree.
Knowledge workers are in a position of power and replacing them may be difficult and time
consuming.
 44. (p. 36) The reliance on knowledge workers also affects organizations' decisions about the
kinds of people they are recruiting and selecting leading them to emphasize on:
 A. specific job skills.
 B. foundation skills.
 C. arithmetical skills.
 D. general cognitive skills.
 E. operative skills.
The reliance on knowledge workers affects organizations' decisions about the kinds of people
they are recruiting and selecting. They are shifting away from focusing on specific skills, such as
how to operate a particular kind of machinery, and toward a greater emphasis on general
cognitive skills.
AACSB: Analytic Bloom's: Understand Difficulty: Easy Learning Objective: 02-02 Summarize areas in which human resource management can support the goal of creating a high performance
work system. Topic: Knowledge Workers

 45. (p. 36) Employee empowerment is defined as:
 A. the movement of women and minorities into managerial positions.
 B. providing increased salary and benefits to the employees.
 C. leading employees by the strength of one's charisma.
 D. the act of continually learning and improving one's skills and abilities.
 E. giving employees responsibility and authority to make decisions.
Employee empowerment refers to giving employees responsibility and authority to make
decisions regarding all aspects of product development or customer service.
AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 02-03 Define employee empowerment; and explain its role in the modern organization. Topic: Employee Empowerment
 46. (p. 37) What effect does the use of employee empowerment have on recruiting?
 A. It has created an international labor market.
 B. It has substantially enhanced employment opportunities for women and minorities.
 C. It has shifted the focus away from technical skills to general cognitive and interpersonal
skills.
 D. It has significantly reduced recruiting costs.
 E. It has made the recruitment process less time consuming than before.
As with the need for knowledge workers, use of employee empowerment shifts the recruiting
focus away from technical skills and toward general cognitive and interpersonal skills.
AACSB: Reflective Thinking Bloom's: Understand Difficulty: Medium Learning Objective: 02-03 Define employee empowerment; and explain its role in the modern organization. Topic: Employee Empowerment
 47. (p. 37) How can HRM practices help employee empowerment?

 A. Jobs must be designed such that managers have control over business processes.
 B. Mangers should encourage employees to communicate with staff throughout the
organization.
 C. Pay and other rewards should reflect employees' loyalty to the organization.
 D. Managers should provide feedback only during the employee performance review.
 E. Employees' roles and responsibilities must be narrowed.
Managers must encourage employees to interact with staff throughout the organization, must
ensure that employees receive the information they need, and must reward cooperation.
AACSB: Reflective Thinking Bloom's: Understand Difficulty: Medium Learning Objective: 02-03 Define employee empowerment; and explain its role in the modern organization. Topic: Employee Empowerment
 48. (p. 37) Full involvement in one's work and commitment to one's job and company is
referred to as:
 A. employee engagement.
 B. employee empowerment.
 C. employee appraisal.
 D. job enrichment.
 E. job enlargement.
Employee engagement refers to full involvement in one's work and commitment to one's job and
company.
AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 02-03 Define employee empowerment; and explain its role in the modern organization. Topic: Employee Empowerment
 49. (p. 37) Teamwork is:

 A. the assignment of work to groups of employees with various skills who interact to
assemble a product.
 B. giving employees responsibility and authority to make decisions regarding all aspects of
product development.
 C. having the best possible fit between an organization's social system and technical system.
 D. a companywide effort to continuously improve the ways people, machines, and systems
accomplish work.
 E. providing employees the opportunity to grow, thereby achieving organizational goals.
Teamwork is the assignment of work to groups of employees with various skills who interact to
assemble a product or provide a service.
 50. (p. 37) Teams that rely on communications technology such as videoconferences, e-mail,
and cell phones to keep in touch and coordinate activities are referred to as:
 A. associate teams.
 B. electronic teams.
 C. virtual teams.
 D. self-managed teams.
 E. technological teams.
Teams that rely on communications technology such as videoconferences, e-mail, and cell
phones to keep in touch and coordinate activities are referred to as virtual teams.
 51. (p. 38) Increasingly, HR professionals are being viewed as:

 A. legal compliance officers.
 B. an administrative unit or function.
 C. experts in designing and delivering HR systems.
 D. recruitment officers.
 E. strategic partners.
Modern organizations consider HR professionals as strategic partners with other managers.
AACSB: Analytic
Bloom's: Remember Difficulty: Easy Learning Objective: 02-04 Identify ways HR professionals
can support organizational strategies for quality; growth; and efficiency. Topic: Focus on
Strategy
 52. (p. 38) Which of the following terms describes a companywide effort to continuously
improve the way people, machines, and systems accomplish work?
 A. Business reengineering
 B. Total quality management
 C. High-performance work system
 D. Optimal performance system
 E. Performance management
TQM refers to a companywide effort to continually improve the ways people, machines, and
systems accomplish work.
for quality; growth; and efficiency. Topic: High Quality Standards
 53. (p. 39) Which of the following statements is NOT consistent with the core values of
TQM?
 A. The organization promotes cooperation with vendors, suppliers, and customers to improve
quality and hold down costs.
 B. TQM processes are designed to meet the needs of internal and external customers.
 C. Only a few selected managers should receive training in quality.
 D. Managers measure progress with feedback based on data.
 E. Quality is designed into a product or service so that errors are prevented from occurring.
According to total quality management, every employee in the organization receives training in
quality.
AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 02-04 Identify ways HR professionals can support organizational strategies for quality; growth; and efficiency. Topic: High Quality Standards
 54. (p. 39) According to the principles of total quality management:

 A. the feedback process should be initiated only after a significant quality improvement.
 B. human resource managers have a diminished role since the emphasis is on quality alone.
 C. only key personnel receive training in quality.
 D. errors in a product or service should be prevented before occurrence.
 E. internal customers are more valuable than external customers.
According to total quality management, quality is designed into a product or service so that
errors are prevented from occurring, rather than being detected and corrected in an error-prone
product or service.
AACSB: Reflective Thinking Bloom's: Understand Difficulty: Easy Learning Objective: 02-04 Identify ways HR professionals can support organizational strategies for quality; growth; and efficiency. Topic: High Quality
Standards
 55. (p. 40) When two companies join forces and become one entity, it is termed a:
 A. partnership.
 B. merger.
A merger occurs when two companies become one.
AACSB: Analytic
Bloom's: Remember Difficulty: Easy Learning Objective: 02-04 Identify ways HR professionals
can support organizational strategies for quality; growth; and efficiency. Topic: Mergers and
Acquisitions
 56. (p. 40) A chemical company buys a medical equipment manufacturing company. This can
be referred to as a(n):
 A. acquisition.
 B. partnership.
An acquisition happens when one company buys another company.
AACSB: Analytic Bloom's: Apply Difficulty: Easy
 57. (p. 40) Some mergers and acquisitions result in _____ within an industry, meaning that
two firms in one industry join to hold a greater share of the industry.
 A. consolidation
 B. take-over
 C. a joint venture
 D. a partnership
 E. a strategic alliance.
Some mergers and acquisitions result in consolidation within an industry, meaning that two firms
in one industry join to hold a greater share of the industry.
AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 02-04 Identify ways HR professionals can support organizational strategies for quality; growth; and efficiency. Topic: Mergers and Acquisitions
 58. (p. 40) In 1999, Glaxo Wellcome and SmithKline Beecham combined their businesses to
create a new company, GlaxoSmithKline. This is an example of a(n):
 A. acquisition.
 B. take-over.
 C. partnership.
 D. strategic alliance.
 E. merger.
A merger occurs when two companies become one.
AACSB: Reflective Thinking Bloom's: Apply Difficulty: Hard
 59. (p. 41) Which of the following is a challenge for HRM during mergers?
 A. Scrutinizing balance sheets
 B. Evaluating the financial worth of the new company
 C. Developing competitively priced products
 D. Developing conflict resolution skills among employees
 E. Sustaining the brand image of the company
HRM should have a significant role in carrying out a merger or acquisition. Differences between
the businesses involved in the deal make conflict inevitable. Training efforts should therefore
include development of skills in conflict resolution. Also, HR professionals have to sort out
differences in the two companies' practices with regard to compensation, performance appraisal,
and other HR systems.
AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 02-04 Identify ways HR professionals can support organizational strategies for quality; growth; and efficiency. Topic: Mergers and
Acquisitions
 60. (p. 41) The HRM function during downsizing is to terminating the workers who:
 A. are less valuable in their performance.
 B. have the least experience in the industry.
 C. have spent the least amount of time with the organization.
 D. are older than the other employees.
 E. are being paid the highest salaries.
Downsizing presents a number of challenges and opportunities for HRM. In terms of challenges,
the HRM function must "surgically" reduce the workforce by cutting only the workers who are
less valuable in their performance.
AACSB: Reflective Thinking Bloom's: Understand Difficulty: Medium Learning Objective: 02-04 Identify ways HR professionals can support organizational strategies for quality; growth; and efficiency. Topic: Downsizing
 61. (p. 42) As a method of downsizing, early-retirement programs have been shown to be:
 A. humane.
 B. linked to greater employee suffering and distress.
 C. a better alternative to the "grenade" approach.
 D. suited to distinguish clearly between good and poor performers.
 E. by far the most effective.
Early-retirement programs are humane, but they essentially reduce the workforce with a
"grenade" approach—not distinguishing good performers from poor performers but rather
eliminating an entire group of employees. So it is not very effective.
for quality; growth; and efficiency. Topic: Downsizing
 62. (p. 42) When an organization undertakes a complete review of its critical work processes
to make them more efficient and to be able to deliver higher quality, it is engaging in:
 A. outsourcing.
 B. high-performance work system design.
 C. reengineering.
 D. total quality management.
 E. reverse engineering.
Reengineering refers to a complete review of the organization's critical work processes to make
them more efficient and able to deliver higher quality.
for quality; growth; and efficiency. Topic: Reengineering
 63. (p. 42) Which of the following observations about reengineering is true?
 A. It is primarily concerned with production processes.
 B. Critical processes are not altered during this process.
 C. Changing customer needs and technologies necessitate reengineering.
 D. It has no impact on human resource practices and systems.
 E. It is an effort to continually improve the ways systems accomplish work.
Rapidly changing customer needs and technologies have caused many organizations to rethink
the way they get work done. This would lead to a reengineering process.
AACSB: Reflective Thinking
Difficulty: Medium
Bloom's: Understand Learning Objective: 02-04 Identify ways HR professionals can support
organizational strategies for quality; growth; and efficiency. Topic: Reengineering
 64. (p. 42) The practice of having another company provide services is known as:
 A. outsourcing.
 B. downsizing.
 C. empowerment.
 D. benchmarking.
 E. reengineering.
The practice of having another company provide services is referred to as outsourcing.
AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 02-04 Identify ways HR professionals can support organizational strategies for quality; growth; and efficiency. Topic: Outsourcing
 65. (p. 44) Offshoring is defined as:

 A. a practice of having another company provide services.
 B. moving operations from the country where a company is headquartered to a country where
pay rates are lower but the necessary skills are available.
 C. a method of staffing other than the traditional hiring of full-time employees.
 D. a complete review of the organization's critical work processes to make them more
efficient and able to deliver higher quality.
 E. the act of acquiring a new company in a distant location or another country in order to
acquire higher market share or growth.
Moving operations from the country where a company is headquartered to a country where pay
rates are lower but the necessary skills are available is referred to as offshoring.
organizations expanding internationally. Topic: Expanding to Global Markets
 66. (p. 44) When large U.S. software companies like IBM and Microsoft open facilities in
India to take advantage of the highly skilled labor available there at lower pay rates, they are
engaging in:
 A. consolidation.
 B. outsourcing.
 C. empowerment.
 D. sustainability initiatives.
 E. offshoring.
Moving operations from the country where a company is headquartered to a country where pay
rates are lower but the necessary skills are available is referred to as offshoring.
 67. (p. 44) The largest number of immigrants to the U.S. workforce are from:
 A. Africa.
 B. Asia.
 C. North America.
 D. Europe.
 E. Central America.
The largest numbers of immigrants to the U.S. have come from Asia.
AACSB: Diversity Bloom's: Remember Difficulty: Easy Learning Objective: 02-05 Summarize
ways in which human resource management can support organizations expanding
internationally. Topic: Expanding into Global Markets
 68. (p. 44) Which of the following is the reason why more organizations are looking overseas
to hire talented people?
 A. Lack of technology in the U.S.
 B. Lack of skilled labor in the U.S.
 C. Poor quality of labor in the U.S.
 D. Governmental pressure to do so
 E. Low cost of labor in foreign countries
Organizations are looking overseas to hire talented people willing to work for less pay than the
U.S. labor market requires.
AACSB: Diversity Bloom's: Understand Difficulty: Medium
 69. (p. 45) Employees who take assignments in other countries are called:
 A. knowledge workers.
 B. immigrants.
 C. external employees.
 D. expatriates.
 E. emigrants.
Employees who take assignments in other countries are called expatriates.
 70. (p. 45) Which of the following terms refers to a computer system used to acquire, store,
manipulate, analyze, retrieve, and distribute information related to an organization's human
resources?
 A. Electronic performance support systems
 B. e-CRM
 C. High-performance work systems
 D. Self-service systems
 E. HRIS
 A computer system used to acquire, store, manipulate, analyze, retrieve, and distribute
information related to an organization's human resources is referred to as human resource
information system.
AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 02-06 Discuss how technological developments are affecting human resource management. Topic: Technological Change in HRM
 71. (p. 45) How does a human resource information system help the organization?
 A. It can be used to scrutinize balance sheets.
 B. It can be used to develop new lines of products.
 C. It can be used to provide employee coaching.
 D. It can help avoid litigation and lawsuits.
 E. It can used by salespeople to improve targeting.
An HRIS can support strategic decision making, help the organization avoid lawsuits, provide
data for evaluating programs or policies, and support day-to-day HR decisions.
AACSB: Analytic Bloom's: Understand Difficulty: Easy Learning Objective: 02-06 Discuss how technological developments are affecting human resource management. Topic: Technological Change in HRM
 72. (p. 45) An Internet portal is used to:

 A. combine data from several sources into a single site.
 B. consolidate different HR functions into a single location.
 C. process all HR transactions at one time.
 D. obtain insight into business trends.
 E. improve business decisions.
An Internet portal combines data from several sources into a single site and lets users customize
data without programming skills.
 73. (p. 45) A(n) _____ provides insight into business trends and patterns and helps businesses
improve decisions.
 A. electronic performance support systems
 B. Internet portal
 C. shared service center
 D. application service provider
 E. business intelligence system
Business intelligence systems provide insight into business trends and patterns and helps
businesses improve decisions.
 74. (p. 45) Which of the following technologies lets a company rent space on a remote
computer system and use the system's software to manage its HR activities, including security
and upgrades?
 A. Application service providers
 B. Internet portals
Application service providers let companies rent a space on a remote computer system and use
the system's software to manage its HR activities, including security and upgrades.
 75. (p. 45) Which of the following can be used to consolidate different HR functions into a
single location, eliminate redundancy, and reduce administrative costs?
 A. Internet portals
 B. Application services
Shared service centers consolidate different HR functions into a single location, eliminate
redundancy, reduce administrative costs, and process all HR transactions at one time.
 76. (p. 46) What was one of the reasons for the failure of many start-up Internet-based
organizations?
 A. The companies were founded by young people.
 B. The organization culture was based on policies and procedures.
 C. Excessive funding from venture capitalists.
 D. Heated competition from established organizations.
 E. Lack of governmental support and legal costs.
Start-up Internet-based organizations failed as competition from established companies heated up
and as investors withdrew funding. Some start-up companies were acquired, went out of
business, or had to radically cut back hiring and spending.
AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 02-06 Discuss how technological developments are affecting human resource management. Topic: The Internet Economy
 77. (p. 46) The processing and transmission of digitized HR information, especially using
computer networking and the Internet, is known as:
 A. electronic human resource management.
 B. application sharing.
 C. electronic performance systems.
 D. reengineering.
 E. business intelligence.
The processing and transmission of digitized HR information, especially using computer
networking and the Internet is referred to as e-HRM.
AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 02-06 Discuss how technological developments are affecting human resource management. Topic: Electronic Human Resource Management (e-
HRM)
 78. (p. 47) Which of the following is an implication of e-HRM for the HRM practice of
analysis and design of work?
 A. Job openings can be posted online and candidates can apply for jobs online.
 B. Online learning can bring training to employees anywhere, anytime.
 C. Online simulations, including tests, videos, and e-mail, can measure job candidates' ability
to deal with real-life business challenges.
 D. Employees in geographically dispersed locations can work together in virtual teams using
video, e-mail, and the Internet.
 E. Employees can review salary and bonus information and seek information about and enroll
in benefit plans.
Analysis and design of work is impacted by the fact that e-HRM allows employees in
geographically dispersed locations to work together in virtual teams using video, e-mail, and the
Internet.
AACSB: Analytic Bloom's: Remember Difficulty: Medium Learning Objective: 02-06 Discuss how technological developments are affecting human resource management. Topic: Electronic Human Resource Management
(e-HRM)
 79. (p. 47) A great deal of HR information is confidential and not suitable for posting on a
Web site for everyone to see. One solution is to set up e-HRM on ____, which is a network that
uses Internet tools but limits access to authorized users in the organization.
 A. a website
 B. an intranet
 C. third-party services
 D. a shared service center
 E. Internet portals
 A great deal of HR information is confidential and not suitable for posting on a Web site for
everyone to see. One solution is to set up e-HRM on an intranet, which is a network that uses
Internet tools but limits access to authorized users in the organization.
HRM)
 80. (p. 47) A system in which employees have online access to information about HR issues
and go online to enroll themselves in programs and provide feedback through surveys is termed:
A. e-HR management.
 B. payroll automation.
 C. job enrichment.
 D. employee empowerment.
 E. self-service.
Self-service is a system in which employees have online access to information about HR issues
and go online to enroll themselves in programs and provide feedback through surveys.
AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 02-06 Discuss how technological developments are affecting human resource management. Topic: Sharing of Human Resource Information
 81. (p. 47) If, as a plant manager, you entered the question "Can we change working hours?"
into the company's intranet search and received feedback on the company's policies regarding
work hours, plus state and federal guidelines, summaries of relevant laws, model documents, and
new reports concerning alternative work schedules, you would probably be using a(n):
 A. virtual team network.
 B. performance management system.
 C. business-to-business Internet service.
 D. self-service system.
 E. Internet portal.
Self-service is a system in which employees have online access to information about HR issues
and go online to enroll themselves in programs and provide feedback through surveys.
AACSB: Analytic Bloom's: Apply Difficulty: Medium Learning Objective: 02-06 Discuss how technological developments are affecting human resource management. Topic: Sharing of Human Resource Information
 82. (p. 48) What is an HR dashboard?

 A. A messaging system used by HR managers to communicate with employees.
 B. A display of how the company is performing on specific HR metrics.
 C. A tool used to measure the profitability and growth rate of the organization.
 D. A computer system used to acquire, store, manipulate, analyze, retrieve, and distribute HR
information.
 E. A system used to store, analyze, and process the information regarding the employees of an
organization.
An HR dashboard is a display of how the company is performing on specific HR metrics, such as
productivity and absenteeism.
AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 02-06 Discuss how technological developments are affecting human resource management. Topic: Sharing of Human Resource Information
 83. (p. 48) The relationship between employer and employee can be thought of in terms of
a(n) ____, a description of what an employee expects to contribute in an employment
relationship and what the employer will provide the employee in exchange for those
contributions. Unlike a written sales contract, this is not formally put into words.
 A. employee covenant
 B. social agreement
 C. psychological contract
 D. employment bond
 E. explicit agreement
 A psychological contract between employer and employee is a description of what an
employee expects to contribute in an employment relationship and what the employer will
provide the employee in exchange for those contributions.
AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 02-07 Explain how the nature of the employment relationship Topic: A New Psychological Contract
 84. (p. 49) Which of the following is a disadvantage of the new psychological contract?
 A. It has resulted in reduced job security.
 B. Companies have become less innovative.
 C. Work schedules have become less flexible.
 D. Employees have less control over how they work.
 E. Training and development opportunities have reduced.
The new psychological contract has led to organizational restructuring, mergers and acquisitions,
layoffs, and longer hours for many employees. Employers expect employees to take more
responsibility for their own careers, from seeking training to balancing work and family. These
expectations result in less job security for employees.
AACSB: Reflective Thinking Bloom's: Understand Difficulty: Medium Learning Objective: 02-07 Explain how the nature of the employment relationship Topic: A New Psychological Contract
 85. (p. 49) The new type of psychological contract has resulted in reduced:
 A. creativity.
 B. employee compensation.
 C. flexibility.
 D. training and development opportunities.
 E. job security.
The new psychological contracts have resulted in reduced job security and longer work hours.
 86. (p. 49) Employees realize that many companies are no longer able to provide long-term
employment security. Instead, the employees now want:
 A. increased pay.
 B. less demanding work.
 C. employability.
 D. written employment contracts.
 E. additional benefits.
Employees realize that companies cannot provide employment security, so they want
employability.
 87. (p. 50) The use of independent contractors, on-call workers, temporary workers, and
contract company workers, all constitute:
 A. outsourcing.
 B. alternative work arrangements.
 D. high performance work systems.
 E. offshoring.
Alternative work arrangements are methods of staffing other than the traditional hiring of full-
time employees. Use of independent contractors, on-call workers, temporary workers, and
contract company workers are all examples.
AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 02-08 Discuss how the need for flexibility affects human resource management. Topic: Flexibility
 88. (p. 50) Independent contractors are:

 A. usually full-time company employees.
 B. self-employed individuals with multiple clients.
 C. people employed by a temporary agency.
 D. employed directly by a company for a specific time.
 E. people employed by the company to work on an independent project.
Independent contractors are self-employed individuals with multiple clients.
 89. (p. 50) Henry is a human resource consultant who runs and operates his own business
from his home. He is often hired by businesses to present one- or two-day workshops on various
topics within his field of expertise. Henry is a(n):
 A. on-call worker.
 B. agent.
 C. temporary employee.
 D. contract company worker.
 E. temporary worker.
On-call workers are persons who work for an organization only when they are needed.
AACSB: Analytic Bloom's: Apply Difficulty: Easy Learning Objective: 02-08 Discuss how the need for flexibility affects human resource management. Topic: Flexibility
90. (p. 50) _____ are employed by a temporary agency; client organizations pay the agency for
the services of these workers.
 A. On-call workers
 B. Independent contractors
 C. Temporary workers
 D. Contract company workers
 E. Part-time workers
Temporary workers are employed by a temporary agency; client organizations pay the agency
for the services of these workers.
Essay Questions
91. (p. 29) Define labor force. Distinguish between internal labor force and external labor
market.
The term "labor force" is a general way to refer to all the people willing and able to work. For an
organization, the internal labor force consists of the organization's workers—its employees and
the people who have contracts to work at the organization. This internal labor force has been
drawn from the organization's external labor market, that is, individuals who are actively seeking
employment. The number and kinds of people in the external labor market determine the kinds of
human resources available to an organization.
AACSB: Reflective Thinking Bloom's: Understand Difficulty: Easy Learning Objective: 02-01 Describe trends in the labor force composition and how they affect human resource management. Topic: Change in the Labor
Force
 92. (p. 29-32) Discuss three major trends in the composition of the labor market and their
impact on HR practices.
 1) Age: In terms of age, the fastest growing segment is expected to be workers 55 and older.
The 25- to 44-year-old group will increase its numbers only slightly, so its share of the total
workforce will fall. Young workers between the ages of 16 and 24 will actually be fewer in
number. However, in spite of the growing number of young workers, the overall workforce will
be aging. By 2010, more than half of U.S. workers will be older than 40. An aging workforce
presents HR issues that include career planning, retraining, and retirement planning.
 2) Diversity: The number of Asians and Hispanics will increase significantly as a result of
birthrates and immigration rates above the national average. The largest number of immigrants
will come from Asia, North America, and Central and South America. Heterogeneous
composition will pose additional challenges to ensure understanding.
 3) Women/ minorities: Along with the greater racial and ethnic diversity, more women will
be in the paid labor force than in the past. The growth in the labor market of female and minority
populations will exceed the growth of white, non-Hispanic persons. As a result, organizations
cannot afford to ignore or discount the potential contributions of women and minorities.
Employers will have to ensure that employees and HRM systems are free of bias and value the
perspectives and experience that women and minorities can contribute to organizational goals,
such as product quality and customer service.
AACSB: Reflective Thinking Bloom's: Understand Difficulty: Medium Learning Objective: 02-01 Describe trends in the labor force composition and how they affect human resource management. Topic: Change in the
Labor Force
 93. (p. 32) What sorts of activities does managing cultural diversity involve, and to what
degree do HR professionals believe these activities are beneficial in maintaining a competitive
advantage?
Activities include:
 1. Creating an organizational culture that values diversity.
 2. Ensuring that HRM systems are bias-free.
 3. Encouraging career development for women and minorities.
 4. Promoting knowledge and acceptance of cultural differences.
 5. Ensuring involvement in education both within and outside the company.
 6. Dealing with employees' resistance to diversity.
According to a recent survey of HR professionals, most rated workplace diversity as somewhat
or extremely important, and 96 percent said "diversity management skills" are important for an
organization.
AACSB: Diversity Bloom's: Remember Difficulty: Easy Learning Objective: 02-01 Describe trends in the labor force composition and how they affect human resource management. Topic: A Diverse Workforce
 94. (p. 33-34) Explain the problem of skill deficiencies in the U.S. workforce.
The increasing use of computers to do routine tasks has shifted the kinds of skills needed for
employees in the U.S. economy. More employers are looking for mathematical, verbal, and
interpersonal skills, such as the ability to solve math or other problems or reach decisions as part
of a team. Often, when organizations are looking for technical skills, they are looking for skills
related to computers and using the Internet. Today's employees must be able to handle a variety
of responsibilities, interact with customers, and think creatively. Competition for qualified
college graduates in many fields is intense. Some companies are unable to find qualified
employees and instead rely on training to correct skill deficiencies. The gap between skills
needed and skills available has decreased U.S. companies' abilities to compete because as a
consequence of the deficiency they sometimes lack the capacity to upgrade technology,
reorganize work, and empower employees.
AACSB: Reflective Thinking Bloom's: Understand Difficulty: Medium Learning Objective: 02-01 Describe trends in the labor force composition and how they affect human resource management. Topic: Skill Deficiencies
of the Workforce
 95. (p. 34-36) Explain the impact of knowledge workers on the requirements for creating a
high-performance work system.
As the nature of the workforce and the technology available to organizations have changed, so
have the requirements for creating a high-performance work system. Customers are demanding
high quality and customized products, employees are seeking flexible work arrangements, and
employers are looking for ways to tap people's creativity and interpersonal skills. Such demands
require that organizations make full use of their people's knowledge and skill. This has resulted
in increased demand for knowledge workers. Employees whose main contribution to the
organization is specialized knowledge, such as knowledge of customers, a process, or a
profession are referred to as knowledge workers. Knowledge workers are in a position of power,
because they own the knowledge that the company needs in order to produce its products and
services, and they must share their knowledge and collaborate with others in order for their
employer to succeed. An employer cannot simply order these employees to perform tasks.
Managers depend on the employees' willingness to share information. Furthermore, skilled
knowledge workers have many job opportunities, even in a slow economy. If they choose, they
can leave a company and take their knowledge to another employer. Replacing them may be
difficult and time consuming. As more organizations become knowledge-based, they must
promote and capture learning at the level of employees, teams, and the overall organization. The
reliance on knowledge workers also affects organizations' decisions about the kinds of people
they are recruiting and selecting. They are shifting away from focusing on specific skills, such as
how to operate a particular kind of machinery, and toward a greater emphasis on general
cognitive skills (thinking and problem solving) and interpersonal skills. Employers are more
interested in evidence that job candidates will excel at working in teams or interacting with
customers. These skills also support an employee's ability to gather and share knowledge,
helping the organization to innovate and meet customer needs. To the extent that technical skills
are important, employers often are most interested in the ability to use information technology,
including the Internet and statistical software.

 96. (p. 36-37) What is employee empowerment and what type of training must be conducted
to make it effective?
Employee empowerment means giving employees the responsibility and authority to make
decisions regarding the aspects of product development or customer service under their control.
Employees are held accountable for products and services; in return, they share in the resulting
rewards and losses.
For empowerment to succeed, managers must be trained to link employees to resources within
and outside the company. Managers must also encourage employees to interact with staff
throughout the organization, must ensure that employees receive the information they need, and
must reward cooperation. Finally, empowered employees deliver the best results if they are fully
engaged in their work.
AACSB: Reflective Thinking
Bloom's: Understand Difficulty: Medium Learning Objective: 02-03 Define employee empowerment; and explain its role in the modern organization. Topic: Employee Empowerment
 97. (p. 39) What are the core values of total quality management?
The following are some of the core values of TQM:
AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 02-04 Identify ways HR professionals can support organizational strategies for quality; growth; and efficiency. Topic: High Quality Standards
98. (p. 42-43) What is outsourcing? What are the trends in HR outsourcing?
Outsourcing refers to the practice of having another company (a vendor, third-party provider, or
consultant) provide services. Not only do HR departments help with a transition to outsourcing,
but many HR functions are being outsourced. One study suggests that 8 out of 10 companies
outsource at least one human resource activity, and a more recent study found that 91 percent of
U.S. companies have taken steps to standardize their HR processes to prepare for outsourcing.
AACSB: Analytic Bloom's: Remember
Difficulty: Easy
for quality; growth; and efficiency. Topic: Outsourcing
99. (p. 46-47) Define electronic human resource management and indicate its implications for
five HRM practices.
Electronic human resource management (e-HRM) refers to the processing and transmission of
digitized information used in HRM, including text, sound, and visual images, from one computer
or electronic device to another.
Implications include: (see Table 2.2)
 1. Analysis and design of work—Employees in geographically dispersed locations can work
together in virtual teams using video, e-mail, and the Internet.
 2. Recruiting—Post job openings online. Candidates can apply for jobs online.
 3. Training—Online training can bring training to employees anywhere, anytime.
 4. Selection—Online simulations, including tests, videos, and e-mails that measure job
candidate's abilities to deal with real-life business challenges.
 5. Compensation and benefits—Employees can review salary and bonus information and seek
information about and enroll in benefit plans.
HRM)
100. (p. 48-49) What is the "new" psychological contract? What are its implications?
A "new" psychological contract is a description of what an employee expects to contribute in an
employment relationship and what the employer will provide the employee in exchange for those
contributions. Unlike a written sales contract, the psychological contract is not formally put into
words. Instead, it describes unspoken expectations that are widely held by employers and
employees. In the traditional version of this psychological contract, organizations expected their
employees to contribute time, effort, skills, abilities, and loyalty. In return, the organizations
would provide job security and opportunities for promotion. However, this arrangement is being
replaced with a new type of psychological contract. To stay competitive, modern organizations
must frequently change the quality, innovation, creativeness, and timeliness of employee
contributions and the skills needed to make those contributions. This need has led to
organizational restructuring, mergers and acquisitions, layoffs, and longer hours for many
employees. Companies demand excellent customer service and high productivity levels. They
expect employees to take more responsibility for their own careers, from seeking training to
balancing work and family. These expectations result in less job security for employees, who can
count on working for several companies over.

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Chapter 02

Trends in Human Resource Management

Multiple Choice Questions

 10. (p. 37) Virtual teams rely on communications technology such as videoconferences, e-

Multiple Choice Questions

 35. (p. 32) Managing cultural diversity involves:

work system. Topic: Knowledge Workers

 47. (p. 37) How can HRM practices help employee empowerment?

 49. (p. 37) Teamwork is:

 51. (p. 38) Increasingly, HR professionals are being viewed as:

 54. (p. 39) According to the principles of total quality management:

 65. (p. 44) Offshoring is defined as:

 72. (p. 45) An Internet portal is used to:

 82. (p. 48) What is an HR dashboard?

 88. (p. 50) Independent contractors are:

Topic: High-Performance Work Systems

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