Chapter 10

Business Essentials, 11e (Ebert/Griffin)
Chapter 10 Human Resource Management and Labor Relations
1) What is another name given to human resource managers?

A) Financial managers
B) Personnel managers
C) Production managers
D) Accounting managers
E) Business development managers
Answer: B
Explanation: B) Human resource or personnel managers have a substantial impact on a firm's
performance as a business.
Difficulty: Easy
AACSB: Application of knowledge
Objective: 10.1: Define human resource management, discuss its strategic significance, and
explain how managers plan for their organization's human resource needs.
2) Which of the following is considered the starting point of effective human resource
management?
A) External staffing
B) Recruitment
C) Planning
D) Financing
E) Compensation
Answer: C
Explanation: C) The starting point for effective human resource management is human resource
planning which involves job analysis and forecasting the demand for and supply of labor.
Difficulty: Moderate
3) What is the purpose of a skills inventory?

A) To plan and identify people for transfer or promotion
B) To list key managerial positions
C) To describe the specifications for a job
D) To assess trends in previous human resource usage
E) To hire people from outside the organization
Answer: A
Explanation: A) Some organizations also use employee information systems.
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4) Which of the following outlines the duties of a job, its working conditions, and the tools,
materials, and equipment used to perform it?
A) Job advertisement
B) Job specification
C) Job description
D) Job analysis
E) Job report
Answer: C
Explanation: C) A job description lists the duties and responsibilities of a job, whereas a job
specification identifies the skills, abilities, and qualifications needed to perform the job.
Difficulty: Easy
5) Which of the following describes the skills, abilities, and qualifications required for a job?
A) Staffing survey
B) Advertising write up
C) Job specification
D) Employee analysis
E) Replacement chart
Answer: C
Explanation: C) A job specification lists the attributes an employee needs in order to perform the
job effectively.
Difficulty: Easy
6) Which of the following contains information on each employee's education, skills, work
experiences, and career aspirations?
A) Managerial grid
B) Employee information system
C) Job analysis
D) Job specification
E) Labor forecast
Answer: B
Explanation: B) This system can quickly locate every employee who is qualified to fill a
position.
Difficulty: Easy
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7) Which of the following describes an organization's investment in attracting and motivating an
effective workforce?
A) Human capital
B) Talent management
C) HR planning
D) Internal forecasting
E) Job descriptions
Answer: A
Explanation: A) Human capital reflects the organization's investment in attracting, retaining, and
motivating an effective workforce.
8) Where can a manager find information on the skills, abilities and other qualifications needed
to perform a job successfully?
A) Talent management files
C) Human capital systems
D) Job analysis
E) Job description
Answer: B
Explanation: B) The job specification lists the skills, abilities, and other credentials and
qualifications needed to perform the job effectively and is developed based on a job analysis.
9) What is the systematic study of jobs within an organization?

A) Talent management
C) Human capital systems
D) Job analysis
E) Job description
Answer: D
Explanation: D) Job analysis is a systematic analysis of jobs within an organization; most firms
have trained experts who handle these analyses. A job analysis results in job descriptions and job
specifications.
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10) Which of the following indicates an understanding of the skills employees hold and how to
best use those skills for the success of the organization?
A) Job analysis
B) Talent management
C) Skills inventory
D) Adverse impact
E) Human capital
Answer: B
Explanation: B) Talent management reflects the view that the people in an organization
represent a portfolio of valuable talents that can be effectively managed and tapped in ways best
targeted to organizational success.
11) Job analysis is the systematic analysis of jobs within an organization resulting in a job
description.
Answer: TRUE
Explanation: Job analysis results in job description and job specification.
Difficulty: Easy
12) Human capital represents the set of organizational activities directed at attracting,
developing, and maintaining an effective workforce.
Answer: FALSE
Explanation: Human capital reflects the organization's investment in attracting, retaining, and
motivating an effective workforce.
13) A systematic study of jobs within an organization is conducted through a job analysis.
Answer: TRUE
Explanation: Job analysis is a systematic analysis of jobs within an organization; most firms
have trained experts who handle these analyses.
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14) Replacement charts can be used to forecast the external supply of candidates for senior
managerial positions in the organization.
Answer: FALSE
Explanation: At higher levels of an organization, managers plan for specific people and
positions. The technique most commonly used is the replacement chart, which lists each
important managerial position, who occupies it, how long that person will probably stay in it
before moving on, and who is now qualified or soon will be qualified to move into it.
Difficulty: Difficult
15) Talent management reflects the organization's investment in attracting and motivating an
effective workforce.
Answer: FALSE
Explanation: Talent management reflects the view that the people in an organization represent a
portfolio of valuable talents that can be effectively managed and tapped in ways best targeted to
organizational success. Human capital reflects the organization's investment in attracting,
retaining, and motivating an effective workforce.
16) How do human resource managers use job analysis for human resource planning?
Answer: The basis for human resource planning is job analysis. Job analysis is the evaluation of
the duties required by a particular job and the qualities required to perform it. HR planning
involves job analysis and forecasting the supply and demand for labor.
AACSB: Analytical thinking
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17) Discuss the strategic importance of human resources within an organization.
Answer: Human resources are critical for effective organizational functioning. HRM (or
"personnel," as it is sometimes called) was once relegated to second-class status in many
organizations, but its importance has grown dramatically in the last two decades. Its new
importance stems from increased legal complexities, the recognition that HR are a valuable
means for improving productivity, and the awareness of the costs associated with poor HRM.
The effectiveness of their HR function has a substantial impact on the bottom-line performance
of the firm. Poor HR planning can result in spurts of hiring followed by layoffs, which are costly
in terms of unemployment compensation payments, training expenses, and morale.
Consequently, the chief HR executive of most large businesses is a vice-president directly
accountable to the CEO, and many firms are developing strategic HR plans and integrating those
plans with other strategic planning activities.
18) Identify the difference between a job description and a job specification and explain how
they each support the job analysis process.
Answer: Job analysis is a systematic analysis of jobs within an organization. Most firms have
trained experts who handle these analyses. The job description lists the duties and responsibilities
of a job; its working conditions; and the tools, materials, equipment, and information used to
perform it. The job specification lists the skills, abilities, and other credentials and qualifications
needed to perform the job effectively.
19) Which legal concept holds that both employer and employee have the mutual right to
terminate an employment relationship any time, for any reason, and without advance notice to
the other?
A) Quid pro quo
B) Affirmative action
C) Employment at will
D) Mutual consent
E) Equal employment opportunity
Answer: C
Explanation: C) Specifically, employment at will holds that an organization employs an
individual at its own will and can, therefore, terminate that employee at any time, for any reason.
Objective: 10.2: Discuss the legal context of human resource management and identify
contemporary legal issues.
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20) Which of the following constitutes an illegal hiring practice?
A) Asking someone about their availability because the position requires a 50-hour work week
B) Establishing a diversity committee to help diverse employees connect with each other
C) Asking a candidate whether or not he attends church, because it is important that candidates
are available to work on Saturdays and Sundays
D) Keeping track of how many males and females are in the organization
E) Requiring an applicant to specify gender on an application
Answer: C
Explanation: C) The Civil Rights Act of 1964 prohibits employers from screening a candidate
for religious reasons.
21) Under which legal concept is it legal for a manager to discharge all her employees without
advance notice?
A) Quid pro quo
B) Affirmative action
D) Joint agreement
E) Arbitration
Answer: C
Explanation: C) This concept holds that both employer and employee have the mutual right to
terminate an employment relationship anytime, for any reason.
22) Which key piece of legislation made it illegal to discriminate in key areas of employment,
including hiring, promotion, and compensation?
A) Equal Employment Opportunity Act of 1972
B) Civil Rights Act of 1991
C) Equal Pay Act of 1963
D) Title VII of the Civil Rights Act of 1964
E) Fair Labor Standards Act
Answer: D
Explanation: D) Title VII of the Civil Rights Act of 1964 forbids discrimination in all areas of
the employment relationship, such as hiring, opportunities for advancement, compensation
increases, lay-offs, and terminations against members of certain protected classes based on
factors such as race, color, gender, religious beliefs, or national origin.
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23) Which of the following pieces of legislation made it easier to sue an employer for
discrimination, but limited how much could be awarded in damages?
A) Equal Employment Opportunity Act of 1972
B) Civil Rights Act of 1991
C) Equal Pay Act of 1963
D) Title VII of the Civil Rights Act of 1964
Answer: B
Explanation: B) The Civil Rights Act of 1991 made it easier for employees to sue an
organization for discrimination but limits punitive damage awards if they win.
24) Which Act regulated the minimum wage and overtime payable to employees?
A) ERISA
B) Wagner Act
C) Fair Labor Standards Act
D) Taft-Hartley Act
E) Civil Rights Act of 1964
Answer: C
Explanation: C) Fair Labor Standards Act establishes minimum wage and mandated overtime
pay for work in excess of 40 hours per week.
25) Who is charged with enforcing the provisions outlined in Title VII?
A) Supreme Court
B) ERISA
C) OSHA
D) EEOC
E) NLRB
Answer: D
Explanation: D) The Equal Employment Opportunity Commission (EEOC) is charged with
enforcing Title VII as well as several other employment-related laws.
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26) Which type of plan intentionally seeks out employees from underrepresented groups within
the organization?
A) Civil Rights
B) Adverse impact
D) Patriot Act
E) Affirmative action
Answer: E
Explanation: E) Several executive orders require that employers holding government contracts
engage in affirmative action, intentionally seeking and hiring employees from groups that are
underrepresented in the organization.
27) Which Act increased management rights when a union is attempting to organize a group
within an organization?
A) Taft-Hartley
B) OSHA
C) Wagner Act
D) NLRA
E) ERISA
Answer: A
Explanation: A) Following a series of severe strikes in 1946, the Labor-Management Relations
Act (also known as the Taft-Hartley Act) was passed in 1947 to limit union power. The law
increases management's rights during an organizing campaign.
28) How does the EEOC define sexual harassment in the workplace?
A) A single off-color joke that makes a worker uncomfortable
B) Any unwelcomed sexual advances
C) Persistent sexual advances
D) Unwelcome sexual advances made only by members of the opposite sex
E) Behavior that is sexual in nature only when it is instigated by a supervisor
Answer: B
Explanation: B) Sexual harassment is defined by the EEOC as unwelcome sexual advances in
the work environment. If the conduct is indeed unwelcome and occurs with sufficient frequency
to create an abusive work environment, the employer is responsible for changing the
environment by warning, reprimanding, or firing the harasser.
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29) Which of the following allows either the employer or the employee to terminate an
employment relationship for any reason and at any time?
A) Quid pro quo
B) The National Labor Relations Act
D) The Patriot Act
E) Taft- Hartley
Answer: C
Explanation: C) The concept of employment at will holds that both employer and employee
have the mutual right to terminate an employment relationship at any time for any reason, with
or without advance notice to the other. Over the last two decades terminated employees have
challenged the employment-at-will doctrine by filing lawsuits against former employers on the
grounds of wrongful discharge.
30) What legal defense can an employer use when charged with using a pre-employment test that
creates adverse impact?
A) Evidence that the test identifies those who are better able to do the job than others
B) Evidence that the employer sought out minorities
C) Evidence that the employer treated all employees the same
D) Evidence that the test included goals for underused groups
E) Evidence that the test identified how hiring goals will be met
Answer: A
Explanation: A) Employment requirements such as test scores and other qualifications are
legally defined as having an adverse impact on minorities and women when such individuals
meet or pass the requirement at a rate less than 80 percent of the rate of majority group members.
Criteria that have an adverse impact on protected groups can be used only when there is solid
evidence that they effectively identify individuals who are better able than others to do the job.
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31) Which of the following is used to identify employment goals for underused groups, and how
those goals will be achieved?
A) Civil rights
B) Affirmative action plans
C) Equal employment
D) Adverse impact
E) Supply and demand
Answer: B
Explanation: B) Affirmative action plans spell out employment goals for underused groups and
how those goals will be met.
32) When must an employer have a written affirmative action plan that details how underused
groups will be pursued?
A) When the employer applies for a loan
B) When the employer wants to issue stock
C) When the employer holds government contracts
D) When the employer expands operations internationally
E) When the employer is privately held
Answer: C
Explanation: C) Several executive orders, however, require that employers holding government
contracts engage in affirmative action, intentionally seeking and hiring employees from groups
that are underrepresented in the organization. These organizations must have a written
affirmative action plan that spells out employment goals for underused groups and how those
goals will be met.
33) Who is defined as an older worker under the Age Discrimination in Employment Act?
A) Those over 30 years of age
B) Those over 40 years of age
C) Those over 50 years of age
D) Those over 60 years of age
E) Those over 70 years of age
Answer: B
Explanation: B) The Age Discrimination in Employment Act, passed in 1967 and amended in
1978 and 1986, is an attempt to prevent organizations from discriminating against older workers.
In its current form, it outlaws discrimination against people older than 40 years.
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34) The Age Discrimination in Employment Act requires passive nondiscrimination. How do
employers practice passive nondiscrimination?
A) By seeking employees who are protected by the act
B) By seeking minorities who are protected by the act
C) By providing special treatment to women and minorities
D) By treating all who apply fairly
E) By increasing salaries for workers covered by the Act
Answer: D
Explanation: D) Both the Age Discrimination in Employment Act and Title VII require passive
nondiscrimination, or equal employment opportunity. Employers are not required to seek out and
hire minorities, but they must treat all who apply fairly.
35) Which of the following Acts helps to ensure the financial security of pension funds?
A) Employee Retirement Income Security Act
B) Wagner Act
C) Age Discrimination in Employment Act
D) Equal Pay Act
Answer: A
Explanation: A) Employers who provide a pension plan for their employees are regulated by the
Employee Retirement Income Security Act (ERISA) of 1974. The purpose of this act is to help
ensure the financial security of pension funds by regulating how they can be invested.
36) What is the purpose of the Family and Medical Leave Act of 1993?
A) To extend the length of maternity leaves
B) To allow employees to take a leave of absence with pay
C) To allow employees to take a leave of absence for family or medical emergencies or when a
child is born
D) To increase the percentage of payroll spent on health care for workers
E) To ensure financial security for all employees, regardless of circumstance
Answer: C
Explanation: C) The Family and Medical Leave Act (FMLA) of 1993 requires employers to
provide up to 12 weeks of unpaid leave for family and medical emergencies.
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37) Which of the following set up procedures for employees to vote on their desire for union
representation?
A) Taft-Hartley Act
B) Labor-Management Relations Act
C) Occupational Safety and Health Act
D) Wagner Act
E) Patriot Act
Answer: D
Explanation: D) Union activities and management's behavior toward unions constitute another
heavily regulated area. The National Labor Relations Act (also known as the Wagner Act),
passed in 1935, sets up a procedure for employees to vote on whether to have a union.
38) Which Act established the National Labor Relations Board?

A) Taft-Hartley Act
B) Patriot Act
C) Labor-Management Relations Act
D) Occupational Safety and Health Act
E) National Labor Relations Act
Answer: E
Explanation: E) The National Labor Relations Act (also known as the Wagner Act ), passed in
1935, sets up a procedure for employees to vote on whether to have a union. If they vote for a
union, management is required to bargain collectively with the union. The National Labor
Relations Board (NLRB) was established by the Wagner Act to enforce its provisions.
39) Employers may require an AIDS test as a condition of an offer of employment.

Answer: FALSE
Explanation: Organizations must treat AIDS like any other disease covered by law; no employer
can legally require an AIDS or any other medical exam as a condition for making an offer of
employment.
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40) The Occupational Safety and Health Act of 1970 is the single most comprehensive piece of
legislation regarding workplace safety and health.
Answer: TRUE
Explanation: Further, OSHA holds that every employer has an obligation to furnish each
employee with a place of employment that is free from hazards.
41) In spite of employment at will, employees may not be fired for filing workers' compensation
claims.
Answer: TRUE
Explanation: Recently, the courts have ruled that employees who file workers' compensation
claims are protected by law.
42) It is illegal to use any pre-employment test that creates adverse impact.
Answer: FALSE
Explanation: Criteria that have an adverse impact on protected groups can be used only when
there is solid evidence that they effectively identify individuals who are better able than others to
do the job.
43) ERISA was designed to regulate how pension funds are invested.
Answer: TRUE
Explanation: The purpose of this act is to help ensure the financial security of pension funds by
regulating how they can be invested.
44) The Family and Medical Leave Act of 1993 requires employers to provide up to 12 weeks of
paid leave for family and medical emergencies or when a child is born.
Answer: FALSE
Explanation: The Act requires employers grant up to 12 weeks leave, but the leave is unpaid.
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45) The National Labor relations Board was established by the Wagner Act to enforce the
provisions of the Act.
Answer: TRUE
Explanation: National Labor Relations Board (NLRB) was established by the Wagner Act to
enforce its provisions.
46) The Patriot Act gives Human Resource Managers access to previously confidential personal
information on employees, such as health and financial records.
Answer: FALSE
Explanation: Government investigators have access to previously confidential personal and
financial records, not an employer's HR department.
47) Explain the role of equal employment opportunity and the Equal Employment Opportunity
Commission.
Answer: The basic goal of equal employment opportunity regulation is to protect people from
unfair or inappropriate discrimination in the workplace. Problems arise when distinctions among
people are not job related. Courts have determined that illegal discriminatory actions by an
organization or its managers cause members of a protected class to be unfairly differentiated
from other members of the organization. Discrimination is illegal when based on race, color,
religion, gender, age, national origin, disability status, and status as a military veteran. The Equal
Employment Opportunity Commission (EEOC) is a division of the Department of Justice. The
EEOC was created by Title VII of the 1964 Civil Rights Act and has specific responsibility for
enforcing Title VII, the Equal Pay Act, and the Americans with Disabilities Act.
48) What are the two types of sexual harassment as defined by the courts?
Answer: In cases of quid pro quo harassment, the harasser offers to exchange something of
value for sexual favors. In hostile work environment harassment, the workplace is tainted by off-
color jokes, lewd comments, or other actions that make employees uncomfortable. Companies
must deal with sexual harassment by warning, reprimanding, or firing the harasser.
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49) Describe the purpose of the Wagner Act, including how the Act is enforced.
Answer: Union activities and management's behavior toward unions constitute another heavily
regulated area. The National Labor Relations Act (also known as the Wagner Act), passed in
1935, sets up a procedure for employees to vote on whether to have a union. If they vote for a
union, management is required to bargain collectively with the union. The National Labor
Relations Board (NLRB) was established by the Wagner Act to enforce its provisions.
50) Discuss the implications of the Patriot Act for Human Resource Management.
Answer: In response to the terrorist attacks of September 11, 2001, the U.S. government passed
legislation that increases its powers to investigate and prosecute suspected terrorists. This
legislation, known as the Patriot Act, has several key implications for HRM. For instance, certain
restricted individuals (including ex-convicts and aliens from countries deemed by the State
Department to have repeatedly provided support for acts of international terrorism) are ineligible
to work with potentially dangerous biological agents. More controversial are sections granting
government investigators access to previously confidential personal and financial records.
51) Which selection technique is MOST likely to introduce bias?

A) Interview
B) Application forms
C) Aptitude tests
D) Drug testing
E) Polygraph tests
Answer: A
Explanation: A) The interview is sometimes a poor predictor of job success. Biases inherent in
the way people perceive and judge others on first meeting affect subsequent evaluations.
Objective: 10.3: Identify the steps in staffing a company and discuss ways in which
organizations recruit and select new employees.
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52) Which of the following is conducted to attract qualified persons to apply for available jobs?
A) Realistic job previews
B) Recruiting
C) Selection
D) Hiring
E) Interviews
Answer: B
Explanation: B) Recruiting is the process of attracting qualified persons to apply for the jobs that
are open.
53) What is the advantage of promoting from within when filling an opening within the
organization?
A) Less need for a realistic job preview
B) Increased influx of high quality employees
C) Increased employee morale
D) Reduced turnover
E) Increased diversity of employees
Answer: C
Explanation: C) Promotion from within can help build morale and keep high-quality employees
from leaving.
54) How can a firm help to ensure a new hire has a thorough understanding of a position before
accepting the position?
A) Allow the candidate to job shadow for a day.
B) Use team interviews comprised of employees from that department.
C) Institute a higher than standard compensation system.
D) Use realistic job previews.
E) Use a different application form for each type of position available.
Answer: D
Explanation: D) One generally successful method for facilitating a good person-job fit is the so-
called realistic job preview (RJP). As the term suggests, the RJP involves providing the applicant
with a real picture of what performing the job that the organization is trying to fill would be like.
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55) What is the most popular pre-employment test given?
A) Drug tests
B) Reference checks
C) Credit checks
D) Physical exams
E) Interviews
Answer: E
Explanation: E) Interviews are a popular selection device, although they are actually often a
poor predictor of job success.
56) Human resource managers need to forecast the internal and external supply of employees.
Answer: TRUE
Explanation: Forecasting labor involves two tasks: forecasting the internal and external supply
of labor.
Difficulty: Easy
57) When forecasting the internal supply of labor, planners must rely on information from
sources such as government reports and figures supplied by colleges on the number of students
in major fields.
Answer: FALSE
Explanation: These are sources used when forecasting the external supply of labor.
58) Companies often use internal recruitment to build morale and keep high-quality employees
from leaving.
Answer: TRUE
Explanation: Internal recruiting means considering present employees as candidates for
openings. Promotion from within can help build morale and keep high-quality employees from
leaving.
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59) When selecting someone to hire, the first step in selection is usually asking the candidate to
take a test.
Answer: FALSE
Explanation: The first step is to fill out an application or send a résumé.
60) Distinguish between internal and external recruiting.

Answer: Internal recruiting means considering present employees as candidates for openings.
External recruiting involves attracting people outside of the organization to apply for jobs. The
goal of each process is to attract the most qualified persons to apply for available jobs.
Difficulty: Easy
61) Describe how wages, salaries, incentives, and benefits programs help companies attract and
keep skilled workers.
Answer: A major factor in retaining skilled workers is a compensation system, the total package
that a firm offers employees in return for their labor. Wages are paid for time worked and a
salary is paid for discharging the responsibilities of a job. Incentive programs are designed to
motivate performance and include bonuses, merit salary systems, pay for performance, profit-
sharing, gainsharing, and pay-for-knowledge plans. Benefit programs include workers'
compensation insurance, retirement plans, and cafeteria benefit plans. Finding the right
combination of compensation elements is always complicated by the need to make employees
feel valued, while holding down company costs.
62) Which of the following links salary increases to performance levels in nonsales jobs?
A) Bonuses
B) Collective bargaining
C) Merit salary systems
D) Cafeteria benefit plans
E) Workers' compensation insurance
Answer: C
Explanation: C) An example is the rewarding of executives with stock options.
Difficulty: Easy
Objective: 10.4: Describe the main components of a compensation and benefits system.
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63) When a paycheck is calculated from the number of hours worked during the week times the
hourly rate, what type of system is being used to pay employees?
A) Gainsharing
B) Salary
C) Profit sharing
D) Wage
E) Incentive
Answer: D
Explanation: D) A wage is the dollar amounts paid to employees for their labor.
64) Which refers to compensation other than wages and salaries and other incentive pay offered
by a firm to its workers?
A) Profit-sharing
B) Gainsharing
C) Benefits
D) Pay-for-knowledge
E) Variable
Answer: C
Explanation: C) Benefits account for an increasing percentage of most compensation budgets.
Difficulty: Easy
65) What is the total package that a firm offers employees in return for their labor?
A) Wage
B) Salary
C) Benefits package
D) Compensation package
E) Retention plan
Answer: D
Explanation: D) In addition, the compensation package is a major factor in retaining skilled
workers.
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66) What do top executives often receive as incentives?
A) Merit salary systems
B) Workers' compensation insurance
C) Salaries
D) Stock options
E) Wages
Answer: D
Explanation: D) Though stock options are common incentives, such options have been at the
center of some of the recent accounting scandals plaguing some businesses today.
67) What type of pay system rewards middle managers for especially high output, often
exceeding the value of bonuses?
A) Variable pay
B) Merit raises
C) Profit-sharing
D) Gainsharing
E) Pay-for-knowledge
Answer: A
Explanation: A) Variable pay has proven to be a high motivator for work performance. The
popularity of variable pay programs has increased in the United States over the last decade.
68) Which of the following is considered to be more effective than merit raises in motivating
middle managers to increase output?
A) Wage inflation
B) A bonus system
C) A gainsharing plan
D) Pay for performance
E) Salary sacrifice
Answer: D
Explanation: D) Pay for performance (variable pay) goes to middle managers on the basis of
companywide performance, business unit performance, personal record, or all three factors.
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69) If a firm ends its fiscal year with profit, which plan can the firm use to distribute part of the
excess to employees?
A) Gainsharing plan
B) Profit-sharing plan
C) Cafeteria plan
D) Insurance plan
E) Salary-sharing plan
Answer: B
Explanation: B) Under profit-sharing plans, profits earned above a certain level are distributed
to employees.
70) Which of the following companywide incentive plans distribute bonuses to employees when
a company's costs are reduced through greater work efficiency?
A) Wage setting plans
B) Pay-for-performance plans
C) Profit-sharing plans
D) Gainsharing plans
E) Pay-for-knowledge plans
Answer: D
Explanation: D) Gainsharing plans distribute bonuses to employees when a company's costs are
reduced through greater work efficiency.
71) Some employers provide employees with a fixed dollar amount for benefits, allowing
employees to choose between various health insurance, life insurance, disability insurance, and
educational benefits. What is the name of this plan?
A) Gainsharing
B) Profit-sharing
C) Cafeteria benefits
D) Equal employment
E) Retention benefits
Answer: C
Explanation: C) With a cafeteria benefit plan, a certain dollar amount of benefits per employee
is set aside so that each employee can choose from a variety of alternatives.
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72) Wages refer to compensation usually expressed as an amount paid per year.
Answer: FALSE
Explanation: Wages are paid for time worked, such as per hour. A salary refers to compensation
usually expressed as an amount paid per year.
73) The number of variable pay programs in the United States has been consistently falling for
the last decade, and it is predicted that they will continue to decline in popularity.
Answer: FALSE
Explanation: The number of variable pay programs in the United States has been growing
consistently for the last decade, and most experts predict they will continue to grow in
popularity.
74) Many firms say that merit raises are a better motivator than variable pay.
Answer: FALSE
Explanation: Because the range between generous and mediocre merit raises is usually quite
small, variable pay is a better motivator.
75) In a company-sponsored pension plan, employees are not allowed or required to make
contributions.
Answer: FALSE
Explanation: In some cases, the company contributes all the money to the pension fund, and in
other cases, contributions are made by both the company and employees.
76) In recent years, some companies have run into problems because they have not set aside
enough money to cover the retirement funds they have agreed to provide.
Answer: TRUE
Explanation: Pension plans include plans in which the company only contributes and plans in
which both the company and the employees contribute.
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77) In setting wage and salary levels, a firm may start by looking at competitors' levels.
Answer: TRUE
Explanation: Competitor levels are not the only benchmark. Within a firm it is possible that a
person with more experience is paid more than a person with less experience doing the same job.
Difficulty: Easy
78) Explain commonly offered benefits and identify at least two benefits that are mandated by
the Federal government.
Answer: Benefits and compensation other than wages and salaries and other incentives offered
by a firm to its workers, account for an increasing percentage of most compensation budgets.
Most companies are required by law to pay tax for Social Security retirement benefits and
provide workers' compensation insurance. Most businesses also provide health, life, and
disability insurance for their workers, as well as paid time off for vacations and holidays. Many
also allow employees to use payroll deductions to buy stock at discounted prices. Counseling
services for employees with alcohol, drug, or emotional problems are also becoming more
common, as are on-site child-care centers.
79) Which of the following types of training occurs while the employee is at his or her place of
work?
A) On-the-job training
B) Vestibule training
C) Off-site training
D) Incentive training
E) Remote training
Answer: A
Explanation: A) On-the-job training occurs while an employee is at work; most of this training
is informal.
Difficulty: Easy
Objective: 10.5: Describe how managers develop the workforce in their organization through
training and performance appraisal.
24
80) A departmental manager is meeting with each of his subordinates to discuss their
performance over the past year. What process is he involved in?
A) Job description
B) Labor negotiations
C) Vestibule assessment
D) Performance appraisal
E) Financial remuneration
Answer: D
Explanation: D) In larger companies, performance appraisals are designed to show more
precisely how well workers are doing their jobs.
81) When does the appraisal process begin?

A) When the manager defines performance standards for an employee
B) After the manager observes the employee's performance
C) As soon as the employee begins working
D) When the employee leaves an organization
E) As soon as the employee requests direction
Answer: A
Explanation: A) The process begins when a manager defines performance standards for an
employee. After that, the manager observes the employee's performance.
82) A restaurant is undergoing a change in cuisine and style of service. It is important that new
staff is hired and existing staff retrained. Why might the HR manager recommend vestibule
training as being highly effective in this situation?
A) Prospective and present employees can be screened to see if they convey the restaurant's new
ethos.
B) Off-site training has great value for evaluating the effectiveness of performance appraisals.
C) Employees will be reluctant to undertake training removed from the workplace.
D) The owners can be more confident that the change to the restaurant will be popular with
customers.
E) Employees will see limited connections to everyday work in this type of training.
Answer: A
Explanation: A) Since vestibule training takes place in simulated environments, it offers
employees the chance to learn new skills or retrain in a realistic setting.
25
83) Which of the following will help a manager be more successful both now and at some point
in the future?
A) Training
B) Development
C) Cafeteria-style plans
D) Pay-for-knowledge plans
E) Vestibule training
Answer: B
Explanation: B) In HRM, training usually refers to teaching operational or technical employees
how to do the job for which they were hired. Development refers to teaching managers and
professionals the skills needed for both present and future jobs.
84) How can an organization determine if training has been successful?

A) Have employees fill out a survey on how well they liked the training.
B) Track how much time employees spent at the training program.
C) Monitor the waiting list for the training program.
D) Test job performance both before and after training has been complete.
E) Measure job performance after training has been completed.
Answer: D
Explanation: D) Typical evaluation approaches include measuring one or more relevant criteria
(such as attitudes or performance) before and after the training, and determining whether the
criteria changed. Trainees may say that they enjoyed the training and learned a lot, but the true
test is whether their job performance improves after their training.
85) Which of the following is used to aid in decision making about training, raises, and
promotions?
A) Judgments
B) Evaluation of training
C) Vestibule training
D) On-the-job training
E) Performance appraisals
Answer: E
Explanation: E) Performance appraisal is a formal assessment of how well employees are doing
their jobs. Administrative reason is to aid in making decisions about pay raises, promotions, and
training.
26
86) When conducting a performance appraisal that uses output as a basis for appraisal, what type
of method is being used?
A) Objective
B) Judgmental
C) Ranking
D) Comparison
E) Rating
Answer: A
Explanation: A) Objective measures of performance include actual output (number of units
produced), scrap rate, dollar volume of sales, and number of claims processed.
87) What is the advantage of using a rating method during the performance review process?
A) Each employee is compared to all other employees in the group.
B) Each employee is compared to a fixed standard.
C) The recency error is eliminated.
D) Managers do not need to utilize a 360-degree review.
E) Providing employee with meaningful feedback is easier.
Answer: B
Explanation: B) Rating differs from ranking in that it compares each employee with a fixed
standard rather than with other employees. A rating scale provides the standard.
88) What type of rating system incorporates feedback from customers, subordinates and peers,
among others?
A) Ranking
B) Recency
C) 360-degree feedback
D) Judgmental
E) Rating
Answer: C
Explanation: C) One interesting innovation in performance appraisal used in some organizations
today is called 360-degree feedback in which managers are evaluated by everyone around
them—their boss, their peers, and their subordinates.
27
89) Performance appraisals are designed to show workers how well they are doing their jobs.
Answer: TRUE
Explanation: Performance appraisals are designed to show workers precisely how well they are
doing their jobs. Typically, the appraisal process involves a written assessment issued on a
regular basis.
Difficulty: Easy
90) The best method of evaluating the success of training is to ask how the employees liked the
training and which aspects they feel will be most relevant to their job.
Answer: FALSE
Explanation: Trainees may say that they enjoyed the training and learned a lot, but the true test
is whether their job performance improves after their training.
91) How do organizations develop workers' skills?

Answer: The firm must acquaint new employees with the firm and their jobs. Managers train
employees and develop job skills. On-the-job training occurs while the employee is at work. Off-
the-job training takes place away from work.
92) What is the name given to an employee who is hired on something other than a permanent or
full-time basis?
A) Knowledge expert
B) Contingent worker
C) Technical employee
D) Supervisory manager
E) Managing director
Answer: B
Explanation: B) Contingent workers include independent contractors, on-call workers, and
leased employees.
Difficulty: Easy
Objective: 10.6: Discuss workforce diversity, the management of knowledge workers, and the
use of a contingent workforce as important changes in the contemporary workplace.
28
93) Workers such as computer scientists, engineers, and software developers who typically
require extensive and highly specialized training, are known as what?
A) Technical workers
B) Knowledge workers
C) Contingent workers
D) Labor relation workers
E) Union workers
Answer: B
Explanation: B) Employees who add value because of what they know are usually called
knowledge workers, and the skill with which they are managed is a major factor in determining
which firms will be successful.
94) Which term refers to employees hired to supplement a firm's permanent workforce?
A) Union workers
B) Contingent workers
C) Knowledge workers
D) Flextime workers
E) Remote workers
Answer: B
Explanation: B) A contingent worker is a person who works for an organization on something
other than a permanent or full-time basis.
95) What are independent contractors, on-call workers, temporary employees, contract
employees, and leased employees all examples of?
A) Union workers
B) Contingent workers
C) Migratory workers
D) Ancillary workers
E) International workers
Answer: B
Explanation: B) These are categories of contingent workers, all of whom work for an
organization on something other than a permanent or full-time basis.
29
96) What is the advantage for a firm who works to hire from a diverse workforce?
A) Greater social awareness among employees
B) Increased ability to institute cafeteria-style benefits
C) A higher quality labor force
D) More flexibility in schedules
E) Increased employee retention
Answer: C
Explanation: C) Today, organizations are recognizing that diversity can be a competitive
advantage. By hiring the best people available from every single group rather than hiring from
just one or a few groups, a firm can develop a higher-quality labor force.
97) In addition to increased flexibility, why do organizations use contingent workers?

A) There is less need for training.
B) Contingent workers can replace knowledge workers.
C) Contingent workers often represent a higher quality labor force.
D) Contingent workers are less expensive to hire.
E) The organization simply cannot find full time workers.
Answer: D
Explanation: D) Many employers use contingent and temporary workers to increase their
flexibility and, in most cases, lower their costs.
98) The range of workers' attitudes, values, beliefs, and behaviors that differ based on age,
gender, or ethnicity all represent workforce diversity.
Answer: TRUE
Explanation: One extremely important set of HR challenges centers on workforce diversity, the
range of workers' attitudes, values, beliefs, and behaviors that differ by gender, race, age,
ethnicity, physical ability, and other relevant characteristics.
Difficulty: Easy
30
99) The increased demand for knowledge workers will require firms to use extra measures, such
as higher salaries and signing bonuses, to attract qualified employees.
Answer: TRUE
Explanation: Attracting and retaining knowledge workers is especially critical in areas in which
demand is still growing, since even entry-level salaries for these employees are continuing to
escalate. Once the employee is hired, the employer must continue to invest in training and so on
for knowledge workers.
100) Explain the meaning of workforce diversity.

Answer: Workforce diversity is the range of workers' attitudes, values, beliefs, and behaviors
that differ by gender, race, age, ethnicity, physical ability, and other relevant characteristics. As a
result of affirmative action efforts, many U.S. organizations are now committed to creating more
diverse workforces.
Difficulty: Easy
101) How can diversity create competitive advantage?

Answer: Workforce diversity is the range of workers' attitudes, values, beliefs, and behaviors
that differ by gender, race, and ethnicity. By hiring the best people from every group rather than
hiring from just one or a few groups, a firm can develop a higher-quality labor force. A diverse
workforce can bring a wider array of information to bear on problems and can provide insights
on marketing products to a wider range of consumers.
102) When does the collective bargaining process begin?

A) When the contract is ratified by the members
B) When the bargaining zone is identified
C) When the union is recognized as the official bargaining agent
D) When union and management representatives agree to contract terms
E) When the employer establishes a maximum limit
Answer: C
Explanation: C) When a union has been legally certified, it assumes the role of official
bargaining agent for workers, and collective bargaining then begins. It only begins when a union
is formed and there is a negotiation going on.
Objective: 10.7: Explain why workers organize into labor unions and describe the collective
bargaining process.
31
103) What is the name given to a group of individuals working together to achieve shared job-
related goals such as higher pay, shorter working hours, greater benefits, or better working
conditions?
A) Management organization
B) Company hierarchy
C) Labor union
D) External organization
E) Permanent employees
Answer: C
Explanation: C) The percentage of American workers belonging to a labor union has been
declining over the last 15 years.
Difficulty: Easy
bargaining process.
104) Which term refers to a labor action in which employees temporarily walk off the job and
refuse to work?
A) Strike
B) Lockout
C) Boycott
D) Mediation
E) Bargaining
Answer: A
Explanation: A) Most strikes in the United States are economic strikes, triggered by stalemates
over mandatory bargaining items including such issues as working hours.
Difficulty: Easy
bargaining process.
105) Who are temporary or permanent replacements for striking workers?

A) Strikebreakers
B) Union busters
C) Union breakers
D) Contingent workers
E) Labor relation teams
Answer: A
Explanation: A) However, the law forbids the permanent replacement of workers who strike
because of unfair practices. In some cases, an employer can obtain legal injunctions that either
prohibit workers from striking or prohibit a union from interfering with its efforts to use
replacement workers.
bargaining process.
32
106) What is the process of working with employees who are represented by a union?
A) Labor relations
B) Human resource management
C) Negotiation
D) Arbitration
E) Contingency recruitment
Answer: A
Explanation: A) A company executive needs special skills in dealing and negotiating with labor
unions.
Difficulty: Easy
bargaining process.
107) What is the process by which union leaders and managers negotiate common terms and
conditions of employment for the workers represented by unions?
A) Striking
B) Picketing
C) Informational gathering
D) Collective bargaining
E) Compensation planning
Answer: D
Explanation: D) It is the process in which a labor contract can be drafted for union-represented
workers.
Difficulty: Easy
bargaining process.
108) Which of the following occurs when union members agree NOT to buy the products of a
targeted employer?
A) Lockout
B) Boycott
C) Mediation
D) Arbitration
E) Slowdown
Answer: B
Explanation: B) Workers may also urge consumers to boycott the firm's products.
Difficulty: Easy
bargaining process.
33
109) If negotiations fail, what can a company choose to use to prevent union employees from
coming to work?
A) Wildcat strike
B) Lockout
C) Strikebreaker
D) Economic strike
E) Bailout
Answer: B
Explanation: B) Lockouts are illegal if they are used as offensive weapons to give management
a bargaining advantage.
Difficulty: Easy
bargaining process.
110) What occurs when a neutral third party dictates a settlement between two sides that have
agreed to submit to outside judgment?
A) Mediation
B) Arbitration
C) Strikebreaker
D) Impasse
E) Picketing
Answer: B
Explanation: B) In arbitration, the neutral third party (the arbitrator) dictates a settlement
between the two sides, which have agreed to submit to outside judgment. In mediation, the
neutral third party (the mediator) can suggest, but cannot impose, a settlement on the other
parties.
Difficulty: Easy
bargaining process.
34
111) In a union contract, future wage increases are often tied to the Consumer Price Index and
provide for
A) economic strikes.
B) contract renegotiations.
C) wage reopener clauses.
D) pay tied to productivity.
E) cost of living adjustments.
Answer: E
Explanation: E) Compensation includes both current and future wages. One common tool for
securing wage increases is a cost-of-living adjustment (COLA). Most COLA clauses tie future
raises to the Consumer Price Index (CPI), a government statistic that reflects changes in
consumer purchasing power. Almost half of all labor contracts today include COLA clauses.
bargaining process.
112) What tactic could a unionized employee take to show why they are striking against an
employer?
A) Picketing
B) Boycotting
C) Work slowdowns
D) Mediation
E) Lockouts
Answer: A
Explanation: A) In picketing, workers march at the entrance to the employer's facility with signs
explaining their reasons for striking.
bargaining process.
113) Which alternative to striking encourages to work at a pace that results in significantly lower
productivity for the organization?
A) Work slowdown
B) Lock out
C) Sickout
D) Picket
E) Boycott
Answer: A
Explanation: A) Another alternative to striking is a work slowdown. Instead of striking, workers
perform their jobs at a much slower pace than normal. A variation is the sickout, during which
large numbers of workers call in sick.
bargaining process.
35
114) Labor relations refers to the dealing with employees who are not represented by a union.
Answer: FALSE
Explanation: Labor relations refers to dealing with unions.
Difficulty: Easy
bargaining process.
115) A solution to a long-term contract based solely on COLA is called a wage reopener clause
that does not allow wage rates to be renegotiated.
Answer: FALSE
Explanation: Wage reopener clauses allow wage rates to be renegotiated at preset times during
the life of the contract.
bargaining process.
116) Although millions of American workers still belong to unions, union membership as a
percentage of the total workforce has steadily declined.
Answer: TRUE
Explanation: In 2014, only 11.1 percent of U.S. workers belonged to a labor union, down from
20.1 percent in 1983, when the U.S. Department of Labor first began compiling data.
bargaining process.
117) Wage reopener clauses are not required by law.

Answer: FALSE
Explanation: Wage reopener clauses are now included in only 10 percent of all labor contracts.
bargaining process.
118) A work slowdown is an alternative to striking where large numbers of workers perform at a
much slower pace than normal.
Answer: TRUE
Explanation: Another alternative to striking is a work slowdown. Instead of striking, workers
bargaining process.
36
119) Describe the current trends in labor-management relations in the United States.
Answer: Since the mid-1960s, U.S. labor unions have experienced increasing difficulties in
attracting new members. Today, about 11 percent of all U.S. workers belong to a labor union.
Union membership took a jump in 2009, in part due to worker concerns about job security during
the 2008-2009 recession, but then resumed its downward trend. Another issue affecting trends in
unionism is the geographic shift in the U.S. economy. For the most part, unionism in the United
States started in the northern and midwestern regions and in cities like Detroit, Pittsburgh,
Cleveland, St. Louis, and Chicago. But over the past several decades there has been a
pronounced shift as businesses have moved their operations to the south and southwest, areas
that do not have a strong union heritage.
bargaining process.
120) Explain the difference between labor relations and a labor union.
Answer: Labor relations refers to the process of working with employees who are represented
by a union, while a labor union is a group of individuals working together to achieve shared job-
related goals. The goals of a labor union may include higher pay, shorter working hours, more
job security, greater benefits, or better working conditions.
bargaining process.
121) What options are available to the union when contract negotiations break down?
Answer: When contract negotiations break down, unions may strike (refuse to work), picket
(publicize grievances at the entrance to the employer's facility), boycott (refuse to buy the
products of the employer), or slowdown (perform jobs at a slower pace). These actions taken by
the labor union are tactics used to support their cause.
bargaining process.
122) What options are available to management when contract negotiations break down?
Answer: When contract negotiations break down, management may institute a lockout (workers
are denied access to the workplace) or use strikebreakers (hire nonunion workers as temporary
replacements for striking employees). Managers and workers both have a range of tactics that
they can use to advance their cause.
bargaining process.
37
123) Why is it important for the union to include a cost-of-living adjustment clause when
negotiating a union contract?
Answer: Compensation includes both current and future wages. One common tool for securing
wage increases is a cost-of-living adjustment (COLA). Most COLA clauses tie future raises to
the Consumer Price Index (CPI), a government statistic that reflects changes in consumer
purchasing power. Almost half of all labor contracts today include COLA clauses.
bargaining process.
124) A union can picket, boycott, or use a work slowdown to support strike efforts. Why would
the union choose one of these over the other?
Answer: To support a strike, a union faced with an impasse has recourse to additional legal
activities. In picketing, workers march at the entrance to the employer's facility with signs
explaining their reasons for striking. A boycott occurs when union members agree not to buy the
products of a targeted employer. Workers may also urge consumers to boycott the firm's
products. Another alternative to striking is a work slowdown. Instead of striking, workers
bargaining process.
38

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Business Essentials, 11e (Ebert/Griffin)

Chapter 10 Human Resource Management and Labor Relations

1) What is another name given to human resource managers?

3) What is the purpose of a skills inventory?

9) What is the systematic study of jobs within an organization?

38) Which Act established the National Labor Relations Board?

39) Employers may require an AIDS test as a condition of an offer of employment.

51) Which selection technique is MOST likely to introduce bias?

60) Distinguish between internal and external recruiting.

81) When does the appraisal process begin?

84) How can an organization determine if training has been successful?

91) How do organizations develop workers' skills?

97) In addition to increased flexibility, why do organizations use contingent workers?

100) Explain the meaning of workforce diversity.

101) How can diversity create competitive advantage?

102) When does the collective bargaining process begin?

105) Who are temporary or permanent replacements for striking workers?

117) Wage reopener clauses are not required by law.

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