types of risk

Question 1

HRM initiatives can affect business strategy through the overall talent strategy, company culture, ethics, investments in people, and the implementation of change initiatives.

Answer 1

Strategic Risk

Question 2

HRM affects the speed and effectiveness of talent acquisition as well as the development of employees’ skills and the identification and retention of top performers. These and other HRM activities can directly influence the organization’s success or failure

Answer 2

Operational Risk

Question 3

HRM performance affects the organization’s workforce costs and productivity directly through compensation, benefits, turnover, overtime, and time-to-hire, and indirectly through errors, accidents, delays, and lost production.

Answer 3

Financial Risk

Question 4

Every employment-related decision can have legal ramifications, particularly in the areas of diversity, health and safety, union relations, whistleblowers, and harassment. SEC regulations mandate the board of directors’ responsibility for oversight of risk management policies. Boards must make known any material risks with the potential to affect company earnings. Because the acquisition, retention, and performance of talent have the potential to affect company earnings, it is essential that organizations identify and manage these risks through effective HRM.

Answer 4

Compliance Risk