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9/17/14

Human Resource Management 12/E R. Solutions manual and test bank Wayne Mondy

Human Resource Management 12/E R. Solutions manual and test bank Wayne Mondy

Human Resource Management, 12e (Mondy)

Chapter 2: Business Ethics and Corporate Social Responsibility

Multiple-Choice Questions

1) Bernard Madoff was most likely able to accomplish his Ponzi scheme because ________.

A) politicians protected his securities firm

B) laws failed to regulate bond investments

C) investors did not question his high returns

D) police were unable to find sufficient evidence

Answer: C

Explanation: C) Madoff's case involved providing a consistent 10 percent to 12 percent annual returns in good markets and bad. People did not question him. Investors wanted to believe in the Holy Grail, so rational thoughts did not interfere with disbelief.

Diff: 2 Page Ref: 23

Chapter: 2

Skill: Concept

LO: 1

2) All of the following changes have been implemented by the SEC as a result of the Madoff scandal EXCEPT ________.

A) requiring investors to register each trade with the government

B) expanding the technology budget to improve enforcement

C) rewarding individuals for cooperating with investigations

D) establishing five specialized enforcement units

Answer: A

Explanation: A) As a result of the Madoff scandal, the SEC expanded its budget for use on key technology projects that will restructure vulnerable areas in its regulatory system and improve its enforcement division.The reforms include a so-called "Seaboard Memo for individuals" spelling out how they will be rewarded if they cooperate in investigations. There will also be five specialized enforcement units to tackle crimes such as Ponzi schemes, bribery, and insider trading.

Diff: 3 Page Ref: 24

Chapter: 2

Skill: Concept

LO: 1

3) Which term refers to the discipline that deals with what is good and bad or right and wrong?

A) morals and traditions

B) social responsibility

C) cultural norms

D) ethics

Answer: D

Explanation: D) Ethics is the discipline dealing with what is good and bad, or right and wrong, or with moral duty and obligation.

Diff: 1 Page Ref: 24

Chapter: 2

Skill: Concept

LO: 1

AACSB: Ethical Understanding

4) Which of the following firms has NOT been exposed for ethical and often illegal exploits?

A) Enron

B) Arthur Andersen

C) WorldCom

D) Charles Schwab

Answer: D

Explanation: D) Enron, Arthur Anderson, and WorldCom have been involved with ethical and illegal problems. Charles Schwab has a history of honesty and transparency.

Diff: 2 Page Ref: 22, 25

Chapter: 2

Skill: Concept

LO: 1

5) In a recent survey, what percent of investors said they would move their account if they discovered the company was involved in unethical behavior?

A) 17%

B) 37%

C) 67%

D) 97%

Answer: C

Explanation: C) CEOs have to be clear that unethical behavior is not acceptable. In one survey, 67 percent of investors said they would move their account if they discovered the company was involved in unethical behavior.

Diff: 2 Page Ref: 24

Chapter: 2

Skill: Concept

LO: 1

6) The CEO of GE begins and ends each annual meeting by ________.

A) introducing the firm's senior officials

B) reviewing the firm's financial details

C) stating the firm's integrity principles

D) asking stockholders for their opinions

Answer: C

Explanation: C) Jeff Immelt, GE's CEO, begins and ends each annual meeting of 220 officers and of its 600 senior managers by restating the company's fundamental integrity principles: "GE's business success is built on our reputation with all stakeholders for lawful and ethical behavior. Commercial considerations never justify cutting corners. Upholding this standard is the specific responsibility of the leaders in the room."

Diff: 3 Page Ref: 24

Chapter: 2

Skill: Concept

LO: 1

AACSB: Ethical Understanding

7) What do most of the 500 largest corporations in the United States have?

A) social responsibility audits

B) environmental audits

C) codes of ethics

D) podcasts

Answer: C

Explanation: C) Most of the 500 largest corporations in the United States now have a code of ethics, which encompasses written conduct standards, internal education, and formal agreements on industry standards, ethics offices, social accounting, and social projects.

Diff: 1 Page Ref: 24

Chapter: 2

Skill: Concept

LO: 1

8) With regards to ethics, most of the 500 largest corporations in the U.S. now have a code of ethics. Which of the following would LEAST likely be included in the codes?

A) ethics offices

B) social accounting

C) conduct standards

D) performance appraisals

Answer: D

Explanation: D) Most of the 500 largest corporations in the United States now have a code of ethics, which encompasses written conduct standards, internal education, and formal agreements on industry standards, ethics offices, social accounting, and social projects.

Diff: 2 Page Ref: 24

Chapter: 2

Skill: Concept

LO: 1

9) What ethical breaches in business today have involved hundreds of executives and led to numerous high-profile resignations?

A) stock-options-backdating

B) excessive severance pay

C) unethical salaries

D) insider trading

Answer: A

Explanation: A) Ethical breaches in business continue today. Stock-options-backdating has involved hundreds of executives and led to the resignations of some high-profile executives.

Diff: 2 Page Ref: 25

Chapter: 2

Skill: Concept

LO: 1

10) What was the primary focus of many financial firms involved in the 2008/10 financial crisis?

A) human resources

B) short-term profits

C) customer service

D) long-range returns

Answer: B

Explanation: B) Companies that focused on short-term profits seemingly to the exclusion of everything else were the culprits of the 2008/10 financial crisis. Other organizations had a steady moral compass and went safely through it. Charles Schwab & Co. and US Bancorp have largely avoided the financial disaster because they both focus on customer service, honesty, and transparency.

Diff: 2 Page Ref: 25

Chapter: 2

Skill: Concept

LO: 1

AACSB: Ethical Understanding

11) Which of the following is a strategy used by Costco?

A) outsourcing all administrative tasks to reduce HR costs

B) focusing on short-term profits to benefit stockholders

C) offering the CEO a high salary and few stock options

D) paying high wages to retain good employees

Answer: D

Explanation: D) For years, Wall Street analysts have criticized Costco's management for paying high wages and keeping employees around for a long time, but Costco's CEO believed that it was strategic for long term growth and success to keep good employees. The CEO gets a compensation package that includes a relatively low salary and bonus but a much larger amount in stock options.

Diff: 3 Page Ref: 25

Chapter: 2

Skill: Concept

LO: 1

12) The minimum standards of ethical behavior in a firm are based on ________, while higher standards are established by ________.

A) corporate policies; human resources

B) co-workers; mission statements

C) organizational culture; laws

D) laws; corporate leadership

Answer: D

Explanation: D) Compliance with the law sets the minimum standard of ethical behavior; ethics is much more, however. There must be leaders who are able and willing to instill ethics throughout the culture of the organization because laws are only the beginning of the solution.

Diff: 3 Page Ref: 25

Chapter: 2

Skill: Concept

LO: 1

AACSB: Ethical Understanding

13) According to the text, sources of ethical guidance and personal beliefs are the basis for ________.

A) the model of ethics

B) economic modeling

C) behavior modeling

D) the model of philosophy

Answer: A

Explanation: A) According to the model of ethics, a person or organization is ethical if two relationships are strong and positive. The two elements of the relationship are sources of ethical guidance and personal beliefs about right and wrong.

Diff: 2 Page Ref: 25-26

Chapter: 2

Skill: Concept

LO: 1

AACSB: Ethical Understanding

14) According to the text, what are the two key elements in the model of ethics?

A) moral background and cultural norms

B) sources of ethical guidance and personal moral beliefs

C) social awareness and cultural norms

D) sources of ethical guidance and education level

Answer: B

Explanation: B) According to the model of ethics, a person or organization is ethical if two relationships are strong and positive. The two elements of the relationship are sources of ethical guidance and personal beliefs about right and wrong.

Diff: 2 Page Ref: 25-26

Chapter: 2

Skill: Concept

LO: 1

AACSB: Ethical Understanding

15) Which of the following would LEAST likely be a source of ethical guidance?

A) holy books

B) laws

C) friends

D) tests

Answer: D

Explanation: D) One might use a number of sources to determine what is right or wrong, good or bad, moral or immoral. These sources include the Bible and other holy books. Another source of ethical guidance is the behavior and advice of our parents, friends, and role models. Laws also offer guidance to ethical behavior, prohibiting acts that can be especially harmful to others.

Diff: 2 Page Ref: 26

Chapter: 2

Skill: Concept

LO: 1

AACSB: Ethical Understanding

16) As a professional, what should be your primary source of ethical guidance in the workplace?

A) corporate HR policies

B) corporate code of ethics

C) corporate mission statement

D) corporate procedures

Answer: B

Explanation: B) For most professionals, there are codes of ethics that prescribe certain behavior. Without this conscience that has developed it might be easy to say, "Everyone does it," "Just this once won't hurt," or "No one will ever know."

Diff: 2 Page Ref: 26

Chapter: 2

Skill: Application

LO: 1

AACSB: Ethical Understanding

17) Which term refers to the strength of the relationship between what an individual or an organization believes to be moral and correct and what available sources of guidance suggest is morally correct?

A) Type I ethics

B) Type II ethics

C) Type III ethics

D) Type IV ethics

Answer: A

Explanation: A) The strength of the relationship between what an individual or an organization believes to be moral and correct and what available sources of guidance suggest is morally correct is Type I ethics. Type II ethics is the strength of the relationship between what one believes and how one behaves.

Diff: 1 Page Ref: 26

Chapter: 2

Skill: Concept

LO: 1

AACSB: Ethical Understanding

18) Jeff, a manager at Quik Electronics, believes it is acceptable to not hire minorities, despite the fact that almost everyone condemns this practice. Jeff is unethical based on ________.

A) Type I ethics

B) Type II ethics

C) Type III ethics

D) Type IV ethics

Answer: A

Explanation: A) The strength of the relationship between what an individual or an organization believes to be moral and correct and what available sources of guidance suggest is morally correct is Type I ethics. Type II ethics is the strength of the relationship between what one believes and how one behaves.

Diff: 2 Page Ref: 26

Chapter: 2

Skill: Application

LO: 1

AACSB: Ethical Understanding

19) The manager of a computer firm believes it is acceptable to bribe government officials, despite the fact that such actions are illegal. Which type of ethics suggest that the manager is unethical?

A) Type I

B) Type II

C) Type III

D) all of the above

Answer: A

Explanation: A) The strength of the relationship between what an individual or an organization believes to be moral and correct and what available sources of guidance, such as laws, suggest is morally correct is Type I ethics. Type II ethics is the strength of the relationship between what one believes and how one behaves.

Diff: 2 Page Ref: 26

Chapter: 2

Skill: Application

LO: 1

AACSB: Ethical Understanding

20) Type I ethics is best defined as the strength of the relationship between ________.

A) an individual's moral beliefs and the individual's behavior

B) morals presented by external sources and the punishment for unethical acts

C) an individual's moral beliefs and the morals presented by external sources

D) morals exhibited by most of society and the unethical actions of friends and role models

Answer: C

Explanation: C) The strength of the relationship between what an individual or an organization believes to be moral and correct and what available sources of guidance, such as laws, suggest is morally correct is Type I ethics. Type II ethics is the strength of the relationship between what one believes and how one behaves.

Diff: 3 Page Ref: 26

Chapter: 2

Skill: Concept

LO: 1

AACSB: Ethical Understanding

21) Type II ethics is best defined as the strength of the relationship between ________.

A) an individual's moral beliefs and the individual's behavior

B) morals presented by external sources and the punishment for unethical acts

C) an individual's moral beliefs and the morals presented by external sources

D) morals exhibited by most of society and the unethical actions of friends and role models

Answer: A

Explanation: A) The strength of the relationship between what an individual or an organization believes to be moral and correct and what available sources of guidance, such as laws, suggest is morally correct is Type I ethics. Type II ethics is the strength of the relationship between what one believes and how one behaves.

Diff: 3 Page Ref: 26

Chapter: 2

Skill: Concept

LO: 1

AACSB: Ethical Understanding

22) The strength of the relationship between what one believes and how one behaves is referred to as what type of ethics?

A) Type I

B) Type II

C) Type III

D) Type IV

Answer: B

Explanation: B) Type II ethics is the strength of the relationship between what one believes and how one behaves. The strength of the relationship between what an individual or an organization believes to be moral and correct and what available sources of guidance suggest is morally correct is Type I ethics.

Diff: 1 Page Ref: 26

Chapter: 2

Skill: Concept

LO: 1

AACSB: Ethical Understanding

23) What type of ethics is involved when a HR manager knows that it is wrong to discriminate but does so anyway?

A) Type I

B) Type II

C) Type III

D) Type IV

Answer: B

Explanation: B) Type II ethics is the strength of the relationship between what one believes and how one behaves. The strength of the relationship between what an individual or an organization believes to be moral and correct and what available sources of guidance suggest is morally correct is Type I ethics.

Diff: 2 Page Ref: 26

Chapter: 2

Skill: Application

LO: 1

AACSB: Ethical Understanding

24) What type of ethics is involved if a board of directors considers it wrong to pay excessive salaries to the CEO, yet pays executive salaries that are outrageous?

A) Type I

B) Type II

C) Type III

D) Type IV

Answer: B

Explanation: B) Type II ethics is the strength of the relationship between what one believes and how one behaves, such as in the example provided. The strength of the relationship between what an individual or an organization believes to be moral and correct and what available sources of guidance suggest is morally correct is Type I ethics.

Diff: 2 Page Ref: 26

Chapter: 2

Skill: Application

LO: 1

AACSB: Ethical Understanding

25) What type of ethics is involved if a manager knows that it is wrong to pay bribes yet decides to pay bribes anyway?

A) Type I

B) Type II

C) Type III

D) Type IV

Answer: B

Explanation: B) Type II ethics is the strength of the relationship between what one believes and how one behaves, such as in the example provided. The strength of the relationship between what an individual or an organization believes to be moral and correct and what available sources of guidance suggest is morally correct is Type I ethics.

Diff: 2 Page Ref: 26

Chapter: 2

Skill: Application

LO: 1

AACSB: Ethical Understanding

26) Generally, people are considered ethical if they possess ________.

A) either Type I or Type II ethics

B) either Type II or Type III ethics

C) both Type I and Type II ethics

D) both Type 1 and Type III ethics

Answer: C

Explanation: C) Generally, a person is not considered ethical unless the person possesses both types of ethics. The strength of the relationship between what an individual or an organization believes to be moral and correct and what available sources of guidance suggest is morally correct is Type I ethics. Type II ethics is the strength of the relationship between what one believes and how one behaves, such as in the example provided.

Diff: 2 Page Ref: 26

Chapter: 2

Skill: Concept

LO: 1

AACSB: Ethical Understanding

27) Which of the following laws was NOT enacted for the purpose of legislating business ethics?

A) Federal Sentencing Guidelines for Organizations Act

B) Procurement Integrity Act

C) Sarbanes-Oxley Act

D) Taft-Hartley Act

Answer: D

Explanation: D) The Taft-Hartley Act was enacted to monitor the power and activities of unions. The other three laws were three attempts made by the government to legislate business ethics.

Diff: 2 Page Ref: 27-28

Chapter: 2

Skill: Concept

LO: 2

 

CHAPTER 1

STRATEGIC HUMAN RESOURCE MANAGEMENT: AN OVERVIEW

CHAPTER DESCRIPTION

In the first part of this chapter, employer branding is discussed. Next, human resource management and the human resource management functions are described. Then the dynamic human resource management environment is presented and the many HR Uses of Social Networking are discussed. Next, the changing role of HR is described and human resource designations are discussed. The evolution of HRM and the evolving HR organization are described, and a description of the scope of this book is provided. The chapter concludes with a global perspective entitled “Managing Human Capital in a Borderless World.”

KEY TERMS

Employer branding: Firm’s corporate image or culture focused on attracting the type of employees the firm is seeking.

Human resource management (HRM): Utilization of individuals to achieve organizational objectives.

Staffing: The process through which an organization ensures, that it always has the proper number of employees with the appropriate skills in the right jobs at the right time is called Staffing. Staffing ensures that their organizational objectives can be achieved.

Human resource development (HRD): Major HRM function consisting not only of training and development but also of individual career planning and development activities, organization development, and performance management and appraisal.

External environment: Factors outside an organization’s boundaries that affect a firm’s human resources make-up.

Union: Comprised of employees who have joined together for the purpose of dealing with their employer.

Shareholders: Owners of a corporation.

Human resource information system (HRIS): Any organized approach for obtaining relevant and timely information on which to base human resource decisions.

Human resource managers: Individuals who normally act in an advisory (or staff) capacity when working with other (line) managers regarding human resource matters.

HR <P><LINK LINKEND="MN2.01.015"><KT>outsourcing (HRO):</KT><SIDEIND NUM="15" ID="MN2.01.015"/></LINK> Process of hiring external HR professionals to do the HR work that was previously done internally.

Shared service center (SSC): A c<DEF><P>enter that takes routine, transaction-based activities dispersed throughout the organization and consolidates them in one place.

Professional employer organization (PEO): Company that leases employees to other businesses.

Line managers: Individuals directly involved in accomplishing the primary purpose of the organization are called line managers.

Executive: Top-level manager who reports directly to a corporation’s chief executive officer or to the head of a major division.

Generalist: Person who may be an executive and performs tasks in a variety of HR-related areas.

Specialist: Individual who may be a HR executive, a human resource manager, or a nonmanager, and who is typically concerned with only one of the five functional areas of human resource management.

Country’s culture:<INST> </INST></KT><DEF><P>Set of values, symbols, beliefs, languages, and norms that guide human behavior within the country.

LECTURE OUTLINE

Employer Branding Helps Attract the Best and Make them Want to Stay

Employer branding is the firm’s corporate image or culture focused on attracting the type of employees the firm is seeking. Through employer branding, people get to know what the company stands for, the people it hires, the fit between jobs and people, and the results it recognizes and rewards.

Human resource management

HRM can be defined as the optimal utilization of individuals to achieve organizational objectives.

HUMAN RESOURCE MANAGEMENT FUNCTIONS

Five functional areas are associated with effective human resource management: staffing, human resource development, compensation, safety and health, and employee and labor relations.

STAFFING—Process through which an organization ensures that it always has the proper number of employees with the appropriate skills in the right jobs, at the right time, to achieve organizational objectives.

Job analysis: Systematic process of determining the skills, duties, and knowledge required for performing specific jobs in an organization.

Human resource planning: Systematic process of matching the internal and external supply of people with job openings anticipated in the organization over a specified period of time.

Recruitment: Process of attracting qualified individuals and encouraging them to apply for work with the organization.

Selection: Process through which the organization chooses, from a group of applicants, those individuals best suited both for open positions and the company.

HUMAN RESOURCE DEVELOPMENT—The most important HRM function consisting not only of training and development but also of career planning and development activities, organization development, and performance management and appraisal.


Training: Activities designed to provide learners with the knowledge and skills needed for their present jobs.

Development: Process that involves learning that goes beyond today’s job; it has a more long-term focus.

Career planning: Ongoing process whereby an individual sets career goals and identifies the means to achieve them.

Career development: Formal approach used by the organization to ensure that people with the proper qualifications and experiences are available when needed.

Organization development: Planned and systematic attempts to change the organization, typically to a more behavioral environment.

Performance management: Goal-oriented process that is directed toward ensuring that organizational processes are in place to maximize the productivity of employees, teams, and ultimately, the organization.

Performance appraisal: Formal system of review and evaluation of individual or team task performance.

COMPENSATION—All rewards that individuals receive as a result of their employment.

Direct Financial Compensation: Pay that a person receives in the form of wages, salaries, bonuses, and commissions.

Indirect Financial Compensation (Benefits): All financial rewards that are not included in direct compensation such as paid vacations, sick leave, holidays, and medical insurance.

Nonfinancial Compensation: Satisfaction that a person receives from the job itself or from the psychological and/or physical environment in which the person works.

SAFETY AND HEALTH—Employees who work in a safe environment and enjoy good health are more likely to be productive and yield long-term benefits to the organization.

Safety: Activities involved in protecting employees from injuries caused by work-related accidents.

Health: Activities involved in securing an employees’ freedom from illness and their general physical and mental well being.

EMPLOYEE AND LABOR RELATIONS— Businesses are required by law to recognize a union and bargain with it in good faith if the firm’s employees want the union to represent them. In the past, this relationship was an accepted way of life for many employers, but most firms today would rather have a union-free environment. When a labor union represents a firm’s employees, the human resource activity is often referred to as industrial relations, which handles the job of collective bargaining. Chapter 12 relates strictly to labor unions and collective bargaining; Chapter 13, internal employee relations, comprise the human resource management activities associated with the movement of employees within the organization such as promotions, demotion, termination, and resignation.

HUMAN RESOURCE RESEARCH—Pervades all HRM functional areas and the researcher’s laboratory is the entire work environment.

INTERRELATIONSHIPS OF HRM FUNCTIONS—All HRM functional areas are highly interrelated.

Dynamic Human Resource Management Environment
Many interrelated factors affect the five HRM functions. Factors outside an organization’s boundaries that affect a firm’s human resources make up the external environment.

LEGAL CONSIDERATIONS—Federal, state, and local legislation, and the many court decisions interpreting this legislation, in addition to, many presidential executive orders have had a major impact on human resource management.

LABOR MARKET—Potential employees located within the geographic area from which employees are normally recruited.

SOCIETY—Society may also exert pressure on human resource management.

Ethics: Discipline dealing with what is good and bad, or right and wrong, or with moral duty and obligation.

Corporate social responsibility: Implied, enforced, or felt obligation of managers, acting in their official capacity, to serve or protect the interests of groups other than themselves.

POLITICAL PARTIES— There are two major political parties in the United States. These parties often have differing opinions on human resource topics. Such was the case of the presidential election of 2008 in which the Democrats came to control both houses and the presidency and numerous laws and executive orders were signed into law over the objection of the Republican minority.


UNIONS—Employees who have come together for the purpose of dealing collectively with their employer are collectively called a Union. A Union is treated as an environmental factor because they become a third party when dealing with the company.

SHAREHOLDERS—Owners of a corporation are called shareholders. Because shareholders have invested money in a firm, they may at times challenge programs considered by management to be beneficial to the organization.

COMPETITION—Firms may face intense competition in both their product or service and labor markets.

CUSTOMERS—People who actually use a firm’s goods and services. Management has the task of ensuring that its employment practices do not antagonize the members of the market it serves.

The Many HR Uses of Social Networking

A social networking site is a “Web site that serves as a virtual community, where a group of people use the Internet to communicate with each other about anything and everything.” It is a broad term that encompasses wikis, blogs, LinkedIn, Facebook, and other tools such as Twitter. It is ideal for facilitating interactions between people who cannot easily meet in person.

HR <H2>Technology—The world has never before seen the rapid rate of technological change that is occurring today. The development of technology has created new roles for HR professionals but also places additional pressures on them to keep abreast of the technology.

With the increased sophistication of technology has come the ability to design more useful human resource information systems (HRIS). An HRIS is any organized approach for obtaining relevant and timely information on which to base human resource decisions. Think of an HRIS as an umbrella for merging the various subsystems discussed throughout this text.

ECONOMY—As a generalization, when the economy is booming, it is often more difficult to recruit qualified workers.

Unanticipated Events—Many of the human resource functions require modification when unanticipated events occur.

HR’s Changing STRATEGIC Role: Who Performs the Human Resource Management Tasks?

The person or units who perform human resource management tasks has changed dramatically in recent years.


HUMAN RESOURCE MANAGER— An individual who normally acts in an advisory (or staff) capacity when working with other (line) managers regarding human resource matters.

HR OUTSOURCING—Process of hiring an external provider to do the work that was previously done internally.

HR SHARED SERVICE CENTERS—Take routine, transaction-based activities that are dispersed throughout the organization and consolidate them in one place.

Professional Employer Organization (Employee Leasing)—Company that leases employees to other businesses. When a decision is made to use a professional employer organization, the company releases its employees who are then hired by the PEO.

LINE MANAGERS—Individuals directly involved in accomplishing the primary purpose of the organization. As the traditional work of HR managers diminishes, line managers are stepping up and performing some duties typically done by human resource professionals.

Human Resource Designations

EXECUTIVE— A top-level manager who reports directly to a corporation’s chief executive officer or to the head of a major division is called an executive.

GENERALIST— A person who may be an executive and performs tasks in a variety of HR-related areas is called a Generalist.

SPECIALIST—Individual who may be a HR executive, a human resource manager, or a nonmanager, and who is typically concerned with only one of the five functional areas of human resource management.

Evolution of Human Resource Management

Today, the person or persons who perform HR tasks is certainly different than it was even a decade ago. As more and more companies use alternative means to accomplish HR tasks, the role of the traditional HR manager is diminishing. HR must now enter into the business of strategic HR, focus more on the bottom line of the organization and leave the more administrative tasks to technology or others.

Evolving HR Organizations

Line managers, HR outsourcing, HR shared service centers, and professional employer organizations are now handling many more of the traditional HR tasks.


Managing Human Capital in a Borderless World

Cultural differences between countries will be identified as a major factor influencing global business. This borderless world adds dramatically to the difficulty of managing human capital. Cultural differences reveal themselves in everything from the workplace environments to very divergent concepts of time, space and social interaction. Culture differences are often the biggest barrier to doing business in the world market.<ENIND NUMBER="1"/><INST> </INST>

ANSWERS TO CHAPTER 1 QUESTIONS FOR REVIEW

1. Define human resource management. What human resource management functions must be performed regardless of the organization’s size?

Human resource management is the utilization of a firm’s human resources to achieve organizational objectives.

* Staffing: Process through which an organization ensures that it always has the proper number of employees with the appropriate skills in the right jobs, at the right time, to achieve organizational objectives.

* Human resource development: Major HRM function consisting not only of training and development but also of career planning and development activities, organization development, and performance management and appraisal.

* Compensation: Compensation includes all rewards individuals receive as a result of their employment. The reward may be one or a combination of the following:

* Direct financial compensation: Pay that a person receives in the form of wages, salaries, commissions and bonuses.

* Indirect financial compensation (Benefits): All financial rewards that are not included in direct compensation such as paid vacations, sick leave, holidays, and medical insurance.

* Nonfinancial compensation: Satisfaction that a person receives from the job itself or from the psychological and/or physical environment in which the person works.

* Safety and health: Safety involves protecting employees from injuries due to work-related accidents. Health refers to the employees’ freedom from illness, and their general physical and mental well-being.

* Employee and labor relations: Even with the projected decline in union membership, a business firm is required by law to recognize a union, and bargain with it in good faith, if the firm’s employees want the union to represent them. When a labor union represents a firm’s employees, the human resource activity is often referred to as industrial relations, which handles the job of collective bargaining. Chapter 12 relates strictly to labor unions and collective bargaining; Chapter 13, internal employee relations, comprise the human resource management activities associated with the movement of employees within the organization such as promotions, demotion, termination, and resignation.

2. What are the external environmental factors that affect human resource management? Describe each.

* Legal considerations: Another significant external force affecting human resource management relates to federal, state, and local legislation, and the many court decisions interpreting this legislation. In addition, many presidential executive orders have had a major impact on human resource management.

* Labor market: Potential employees located within the geographic area from which employees are normally recruited.

* Society: Society may also exert pressure on human resource management. If a firm is to remain acceptable to the general public, it must be capable of accomplishing its purpose in line with societal norms.

* Political Parties: There are two major political parties in the United States. These parties often have differing opinions on human resource topics.

* Unions: Group of employees who have joined together for the purpose of dealing collectively with their employer.

* Shareholders: Owners of a corporation. Because shareholders have invested money in a firm, they may at times challenge programs considered by management to be beneficial to the organization.

* Competition: For a firm to succeed, grow, and prosper, it must be able to maintain a supply of competent employees. Other organizations are also striving toward that objective.

* Customers: Because sales are critical to the firm’s survival, management has the task of ensuring that its employment practices do not antagonize members of the market it serves.

* HR <H2>Technology—The world has never before seen the rapid rate of technological change that is occurring today. The development of technology has created new roles for HR professionals but also places additional pressures on them to keep abreast of the technology. With the increased sophistication of technology has come the ability to design more useful human resource information systems (HRIS). An HRIS is any organized approach for obtaining relevant and timely information on which to base human resource decisions. Think of an HRIS as an umbrella for merging the various subsystems discussed throughout this text.

* Economy: The economy of the nation—on the whole—and of its various segments is a major environmental factor affecting human resource management. As a generalization, when the economy is booming, it is often more difficult to recruit qualified workers. On the other hand, when a downturn is experienced, more applicants are typically available.

* Unanticipated events: Occurrences in the external environment that could not be foreseen.

3. This chapter describes HR’s changing role in business. Describe each component that is involved in human resource management.

* Human resource manager: Individuals who normally act in an advisory (or staff) capacity when working with other (line) managers regarding human resource matters.

* HR outsourcing: Process of hiring an external provider to do the work that was previously done internally.

* HR shared service centers: Centers that take routine, transaction-based activities dispersed throughout the organization and consolidate them in one place.

* Professional employer organizations: Company that leases employees to other businesses.

* Line managers: Individuals directly involved in accomplishing the primary purpose of the organization. As the traditional work of HR managers diminishes, line managers are stepping up and performing some duties often done by human resources.

4. What are the various designations associated with human resource management?

* Executives: Top-level manager who reports directly to a corporation’s chief executive officer or to the head of a major division.

* Generalists: Person who may be an executive and performs tasks in a variety of HR-related areas.

* Specialist: Individual who may be a HR executive, a human resource manager, or a nonmanager, and who is typically concerned with only one of the five functional areas of human resource management.

5. What has been the evolution of human resource management?

Today, the person or persons who perform HR tasks is certainly different than it was even a decade ago. As more and more companies use alternative means to accomplish HR tasks, the role of the traditional HR manager is diminishing. HR must now enter into the business of strategic HR, focus more on the bottom line of the organization and leave the more administrative tasks to technology or others.


DISCUSSION OF TEXT HRM INCIDENTS

HRM Incident 1: HR after a Disaster

After Hurricane Rita struck Lake Charles, in southwest Louisiana, on September 24, 2005, many businesses wondered if they would ever return to their former selves. Massive destruction was everywhere. Lake Charles, know for its large and beautiful oak and pine trees, now had the job of removing those downed trees from homes, businesses, and lots. You could see for miles through what used to be thick forests. Huge trucks designed for removing massive tree trunks were everywhere. While driving down a street, downed trees could be seen stacked two stories high waiting to be picked up. The town grew rapidly in size because of the large number of debris and repair crews working on recovery operations. The noise created by chain saws could be heard from daylight until dark. The sounds of hammers were everywhere as homeowners scrambled to get their roofs repaired. Often repair crews would just find an empty lot and set up tents for the night because all motels were full. Traffic was unbelievably slow, and it appeared as if everyone was attempting to get on the road at the same time. Just driving from Point A to Point B could often be quite an adventure. As might be expected in conditions such as these, accidents were numerous. Often police did not have the resources to ticket every fender bender so unless there were injuries, insurance cards were exchanged and the police went on to the next accident.

Months after Hurricane Rita struck, large and small businesses were still frantically trying to find workers so they could start up again. It appeared that every business in the town had a “Help Wanted” sign out front. Individuals who wanted a job could get one and could command a premium salary. Wal-Mart, known for remaining open 24 hours a day, could only stay open on an abbreviated schedule. It even bussed in employees from Lafayette, Louisiana, 70 miles away, each morning and returned them at night because there were not enough workers available in the local area. Restaurants that normally remained open late into the evening closed at 6:00 p.m., if they opened at all. Compensation scales that were in use prior to the hurricanes had to be thrown out and new plans implemented. Minimum-wage jobs were nonexistent. Employees who earned minimum wage before the storm could now command $10 per hour just for being a flagger (a person who directs traffic). Fast-food restaurants that normally paid $6 per hour now paid $9 or $10. Burger King was even offering a $1,500 bonus for entry-level workers. Upscale restaurants that normally paid minimum wage plus tips now paid premium rate plus tips. Restaurants that remained open often had a much younger staff and it was evident that the managers and assistant managers were working overtime to train these new workers. Restaurant patrons had to learn patience because there would be mistakes by these eager, but largely untrained workers.


Questions

1. How were the human resource functions affected by Hurricane Rita?

Virtually every area of HR was affected when Hurricane Rita struck. Businesses were desperately trying to staff their business. Compensation systems had to be significantly altered. There were many untrained workers so the training function continued. Safety issues were everywhere and just getting from point A to Point B was often a challenge.

2. Do you believe that the HR situation described regarding Hurricane Rita would be typical in a disaster? Explain.

Certainly there can be some degree of planning for a disaster. But it is likely that all events cannot be anticipated. At times, managers just have to react to occurrences and hope that the proper decision is being made.

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