Unit 1 - Business Mgmnt. Lead. & Strat

Question 1

Which HR costing activity would be ideal if a company wanted to evaluate the cost of a supervisor thoughtlessly criticizing an employee and the employee decided to quit?

Answer 1

Wayne Cascio framework ((44)

Question 2

In Cascio’s framework, what are the four major cost categories of turnover?

Answer 2

Separation costs; replacement costs; training costs; loss performance (45)

Question 3

In Cascio’s framework what are examples of separation costs?

Answer 3

Exit interviews, administrative functions, separation pay, and unemployment taxes (45)

Question 4

In the Cascio framework what do replacement costs include?

Answer 4

Cost of recruiting and hiring a replacement (45)

Question 5

The cost of orientation and on the job training are representative of what types of costs in the Cascio framework?

Answer 5

Training costs (45)

Question 6

The difference in performance between the person who leaves and their replacement reflects which cost category in the Cascio framework?

Answer 6

Lost performance (45)

Question 7

Using HR cost accounting frameworks to evaluate the impact of smoking on an organization can be useful when designing what?

Answer 7

Policies and employee assistance programs (45)

Question 8

What are key performance indicators (KPI)?

Answer 8

Specific measures of human resource activity that contribute to efficiency and effectiveness of a company (45)

Question 9

Why would an organization want to use key performance indicators (KPI)?

Answer 9

To provide quantitative measurements that can be used to monitor the events that contribute to long-term success (45)

Question 10

What is a leading indicator?

Answer 10

A measure that precedes, anticipates, or predicts future performance (45)

Question 11

In an organization, time to fill is an example of what kind of KPI?

Answer 11

Leading indicator (45)

Question 12

What is a lagging indicator?

Answer 12

The results of a process or a change, such as sales, profits, and customer service levels (45)

Question 13

The average number of units produced per employee is an example of what KPI?

Answer 13

Lagging indicator: this measures how well a company is increasing employee productivity (45)

Question 14

Which KPI reflects bottom line success of a company?

Answer 14

Lagging indicator – executives rely on this to gauge their success (45)

Question 15

In general, leading indicators are most useful when making what types of decisions?

Answer 15

Managerial decisions: since they predict future performance (45)

Question 16

Collecting HR metrics and presenting them to managers in a useful format is referred to as what?

Answer 16

HR score card or HR dashboard (45)

Question 17

HR score card includes what four perspectives?

Answer 17

Strategic, operational, financial, and customer (45-6)

Question 18

In an HR scorecard this perspective measures progress in achieving major strategic initiatives?

Answer 18

Strategic (45)

Question 19

In an HR scorecard operational perspective measures what?

Answer 19

Effectiveness of HR processes (45)

Question 20

On an HR scorecard a financial perspective measures what?

Answer 20

Financial contribution of HR activities (45)

Question 21

On an HR scorecard measuring how well HR activities serve both internal and External customers is which perspective?

Answer 21

Customer perspective(46)

Question 22

What is the primary benefit of an HR scorecard?

Answer 22

Allows managers to assess HR’s contribution to strategy implementation and to the bottom line (46)

Question 23

A useful HR scorecard reinforces the distinction between HR ____ and HR ____ and draws attention to results that HR activities are intended to produce?

Answer 23

Doable’s and deliverables (46)

Question 24

What is the formula to calculate revenue factor?

Answer 24

Revenue divided by total number of FTE (46)

Question 25

This metric is often used as a primary measure of effectiveness of a company representing how much revenue is generated by the average FTE?

Answer 25

Revenue factor (46)

Question 26

What is the formula to calculate revenue per labor costs?

Answer 26

Revenue divided by total labor costs (46)

Question 27

This metric is recommended as a better measure to track then revenue per FTE, motivating managers to reduce cost rather than FTEs?

Answer 27

Revenue per labor costs (46)

Question 28

Revenue factor views employees as a capital investment or an expense?

Answer 28

Capital investment (46) Part-time employees are included in the FTE count proportional to the hours they work

Question 29

What does the following formula calculate? | [revenue - (operating expense - (compensation cost + benefit cost))] divided by (compensation cost + benefit cost)

Answer 29

Human capital ROI (47)

Question 30

What does human capital ROI measure?

Answer 30

Return on investment ratio for employees – frequently mentioned as a prime measure for analyzing HR practices (47)

Question 31

What is the formula for calculating human capital value added?

Answer 31

[revenue - (operating expense - (compensation cost + benefit cost))] divided by total number of FTE (47)

Question 32

This HR metric is interpreted as the value of the workforce is knowledge, skills, abilities, and performance

Answer 32

Human capital value added (47) This metric also represents how much value is added to the company from the average employee

Question 33

Which HR metrics does the following formula calculate? HR expenses/Total Employees

Answer 33

HR Expense factor

Question 34

This popular HR metric reflects the average cost of providing human resource services to employees in a company?

Answer 34

HR expense factor (47) Fun fact: a study found that world-class HR organizations have a 23% lower cost of HR per employee and typical HR organizations

Question 35

Which HR metric does the following formula calculate? [(Number of days absent in the month)/(average number of employees during month)x(Number of work days)]x100

Answer 35

Absence rate (47)

Question 36

What does the HR metric absence rate measure?

Answer 36

The standard measure of absenteeism – this metric can track effects of changes in attendance policies, attendance incentive programs, and other interventions (47)

Question 37

Which HR metric does the following formula calculate? [Number of separations during the month/average number of employees during the month]x100

Answer 37

Turnover rate (47)

Question 38

This HR metric measures the rate that employees leave a company is usually divided into voluntary and involuntary reasons?

Answer 38

Turnover rate (47) - this magic is used to examine potential problems in HR policies

Question 39

This HR metric measures the costs associated with sourcing, Recruiting, and Staffing activities to fill open positions?

Answer 39

Cost per hire – CPH (47)

Question 40

What is the formula for calculating cost per hire (CPH)?

Answer 40

(external costs + internal costs) / Number of hires (48)

Question 41

When calculating cost per hire what are examples of external costs?

Answer 41

All recruiting costs: third-party agency fees, advertising costs, job fair costs, and travel costs (48)

Question 42

When calculating cost per hire what are examples of internal costs?

Answer 42

Salary and benefits of recruiting team plus fixed costs such as physical infrastructure(48)

Question 43

What does the following HR metric calculate? (separation costs + replacement costs + training costs + lost performance)/Number of replacements

Answer 43

Turnover costs per employee (48)

Question 44

This HR metric represents average cost of replacing an employee who quits or is fired and is significant motivation for examining and improving HR practices that reduce turnover?

Answer 44

Turnover costs per employee (48)

Question 45

What is the formula for calculating time to fill?

Answer 45

Total days elapsed to fill requisitions/Number hired (48)

Question 46

What is the purpose of tracking time to fill?

Answer 46

Measures average time required to fill job openings and efficiency of hiring practices (48) Yeah average time to fill is 42 days

Question 47

How do you calculate training investment factor?

Answer 47

Total training costs/Headcount (48)

Question 48

This HR metric represents the training cost per employee?

Answer 48

Training investment factor: changes to this metric should have corresponding changes to other metrics such as reductions in accidents following a safety training (48)

Question 49

What does the following HR metrics calculate? Total cost of healthcare/total employees

Answer 49

Healthcare costs per employee (48)

Question 50

In what instances would healthcare costs per employee be important in communication with employees?

Answer 50

During labor union negotiations. Generally employees need to know how this metric has changed over time and what they can do individually to reduce it (48-49)

Question 51

What HR metric does the following formula calculate? Total employer benefits payments/total gross payroll

Answer 51

Employee benefits as a percent of payroll – sometimes called total benefit cost (49)

Question 52

What HR metric does the following formula calculate? (total number of HR FTEs/total number of FTEs in the organization) x 100

Answer 52

HR-to-employee ratio (49)