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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? 
A. African-Americans
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.
C. consolidation.
D. joint venture.
E. strategic alliance.




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




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
C. Shared service centers
D. Business intelligence systems
E. Electronic performance support systems



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.
C. consolidation.
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? 


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