Business Acumen Flashcards
Competencies
A company has entered a period of no growth or new business initiatives. What type of initiative is the HR director most likely to support during a budget meeting with the HR team?
Enhancement of work/life balance including compressed workweeks.
The company is entering the decline phase of its life cycle and will have fewer resources. The HR director will be interested in any way to retain current employees without significant resource or budget impact. Without incoming revenue, it cannot expand recruiting capabilities and does not need to. Reviewing policies will not enhance engagement and retention. A pay-for-performance system would require a significant investment in the payroll budget.
Which approach to offsetting a downturn is often used by companies in the decline phase of their life cycle?
Reducing costs
Decline occurs when an industry, organization, or product begins to experience a sustained drop in demand. When the decline is apparent, leadership often may introduce cost reduction measures.
An organization who moved to larger facilities and doubled its workforce is still experiencing problems with back orders, resulting in customer dissatisfaction. What phase of the organization/product life cycle is the organization likely in?
Growth
The growth phase is characterized by change and expansion in terms of facilities, marketing, and people. These resources are needed to keep up with the demand for products or services. This phase is often accompanied by backlogs and scheduling problems while the organization adjusts to increased demands.
The vice president of HR in a highly competitive industry has heard that the federal employee health and safety agency is considering increasing employee safety regulations. What would be the best action for the VP to take?
Provide testimony to the agency including recommendations including ensuring regulations apply to businesses of all sizes.
It is the responsibility of HR leaders to advocate for the interests of the employer and its employees, so providing testimony can be a powerful action. In this case, because of the organization’s competitive climate, the vice president of HR should emphasize the need for new regulations to be fair and not to favor some competitors over others. A discussion with peers is a good way to gather information and form ideas but not the strongest advocacy action. An advertisement arguing against a health and safety issue could imply the employer’s lack of interest in employee health and safety. Urging staff and employees to represent the interests of the business is probably permissible, but its possible effect on employee engagement must be considered.
An organization wants to increase its workforce. As part of the analysis, what macroeconomic information might be a red flag regarding this strategy?
Market prices for the organization’s products are high now but are projected to fall.
Supply refers to the availability of the good or service. When prices are high, supply will typically increase as organizations try to maximize profits. Falling profits typically result in less supply. Therefore, while there is an incentive to expand now, the trend indicates that the incentive to expand may be going away. While demand may rise as price falls, profit margins will be lower.
Marketing and IT are collaborating on a new system that will allow customer service representatives to access and change customer accounts directly. Which action should HR take to create value for this effort?
Facilitating process training for all users
The most logical contribution for HR is to provide appropriate training in the use of the new system. HR could also advise on data privacy issues. Technical issues, such as testing or design, are best left to those who are most familiar with the process. The project charter should be created by the project leader, who, in this case, will probably be from IT or marketing.
What is a key benefit to HR leaders of a business intelligence system?
Better evidence-based decisions
A business intelligence system is designed to provide leaders with more data and better means to analyze the data. This allows leaders to make better decisions that are based on actual data rather than on “instincts” or “best guesses.” It does not necessarily improve data security, especially since it gathers more data from more points. Nor does it necessarily provide access to all staff levels. Leaders may spend more time analyzing but may make better decisions.
What do leading indicators provide in an HR balanced scorecard?
A predictive measurement of future performance.
Leading indicators predict future performance. For example, improved customer loyalty (a customer measure) will translate into increased revenue and profits (a financial measure)
What tool allows individuals to access the online resources and data they need to process data and perform tasks?
HR portal
HR portals provide a point of entry to the organization’s data and applications. The portal can be customized to provide access to defined areas. Employee self-service uses a portal to provide access to its users. A self-service kiosk is hardware that allows users to log in to HR portals to perform specific tasks. HRIS is a general term for an information system that stores HR data and includes HR applications.
An HR manager reports to an HR director in a large, multinational organization that many of the employees enrolled in a career advancement program seem to have the same backgrounds. HR uses predictive analytics to identify high-potential individuals and invite them to apply to the program. What should the HR director do?
Assemble an expert HR team to examine the predictive analytics tool.
Artificial intelligence, such as a selection tool based on predictive analytics, can, in fact, be biased if its algorithms are biased. The tool’s premises should be closely examined. Relinquishing technology and inviting everyone to apply is inefficient and impractical. Analyzing previous graduates can result in perpetuating past biases.
A talent acquisition specialist needs to provide an analysis that explores hiring and turnover trends across demographics, performance levels, and promotion histories. Which is the best tool to obtain this information?
Online analytical processing (OLAP)
OLAP applications have the ability to produce a time series illustrating trends while also comparing multiple sets of data within one report. The other responses would provide only some of the necessary data, and additional analysis would be required.
On which financial statement is the gross profit margin found?
Income statement
The income statement contains both the gross profit margin and the net profit margin.
Money an organization owes its vendors and suppliers.
Accounts payable
Performance management tool that depicts an organization’s overall performance, as measured against goals, lagging indicators, and leading indicators.
Balanced scorecard
Applications that can analyze data faster and in more ways than traditional relational databases, offering a multidimensional analysis of business data.
Analytical processing
Statement of an organization’s ability to meet its current and short-term obligations, showing incoming and outgoing cash and cash reserves in operations, investments, and financing
Cash flow statement
Document that defines the output customers can expect
Service-level agreement
Statement that reports revenues, expenses, and profits for a specific period of time, for example, quarterly or annually
Income statement
Ability to use information to gain a deeper understanding of an organization and make sound business decisions.
Business intelligence
Presentation to management that establishes that a specific problem exists and argues for a proposed solution.
Business case
Amount of owners’ or shareholders’ portion of a business.
Equity
Organization’s debts and other financial obligations.
Liabilities
Money an organization’s customers owe the organization.
Accounts receivable
Ratio of net income (gross sales minus expenses and taxes) to net sales.
Net profit margin
The benefit created when an organization meets its strategic goals; measure of usefulness, worth, or importance.
Value
The process by which an organization creates the product or service it offers to the customer.
Value chain
Statement of an organization’s financial position at a specific point in time, showing assets, liabilities, and shareholder equity.
Balance sheet
Business management software, usually a suite of integrated applications, that a company can use to collect, store, manage, and interpret data from many business activities.
Enterprise resource planning (ERP)
Ratio of gross profit to net sales.
Gross profit margin
Financial, physical, and sometimes intangible properties an organization owns.
Assets
A health-care delivery organization has experienced significant and rather sudden growth in membership over the last year. Because this fast pace of growth is forecast to continue, HR and finance complete a labor demand analysis. They determine that the organization must increase its current employee base by approximately 30% in the next two years to properly manage the growth and to handle upcoming voluntary and involuntary separations.
The analysis also indicates that approximately 30% of the current employees are or will be eligible for retirement within 5 years. Many of those eligible for retirement have been in leadership roles for many years and are considered key employees. High-potential employees have been identified within the organization, but not all are aligned with the departments that will be impacted most by upcoming retirements.
The increase in the workload, along with managing the changing demographics of members, has placed a burden on employees across the organization. Morale has declined as employees are feeling more stress. The positive message of growth in the organization is being overshadowed by the discontent of overworked employees. The senior leadership team has decided to coordinate a strategy session with executives and regional leads to address the identified issues.
With the patient base growing so rapidly, how can HR best support the organization in maintaining customer satisfaction?
Ensure that candidates selected for consideration for open positions have a proven track record in customer service.
A health-care delivery organization has experienced significant and rather sudden growth in membership over the last year. Because this fast pace of growth is forecast to continue, HR and finance complete a labor demand analysis. They determine that the organization must increase its current employee base by approximately 30% in the next two years to properly manage the growth and to handle upcoming voluntary and involuntary separations.
The analysis also indicates that approximately 30% of the current employees are or will be eligible for retirement within 5 years. Many of those eligible for retirement have been in leadership roles for many years and are considered key employees. High-potential employees have been identified within the organization, but not all are aligned with the departments that will be impacted most by upcoming retirements.
The increase in the workload, along with managing the changing demographics of members, has placed a burden on employees across the organization. Morale has declined as employees are feeling more stress. The positive message of growth in the organization is being overshadowed by the discontent of overworked employees. The senior leadership team has decided to coordinate a strategy session with executives and regional leads to address the identified issues.
Based upon the potential human capital concerns outlined, which focus should HR leadership pursue?
Alignment of HR and organizational strategies and change management.
A health-care delivery organization has experienced significant and rather sudden growth in membership over the last year. Because this fast pace of growth is forecast to continue, HR and finance complete a labor demand analysis. They determine that the organization must increase its current employee base by approximately 30% in the next two years to properly manage the growth and to handle upcoming voluntary and involuntary separations.
The analysis also indicates that approximately 30% of the current employees are or will be eligible for retirement within 5 years. Many of those eligible for retirement have been in leadership roles for many years and are considered key employees. High-potential employees have been identified within the organization, but not all are aligned with the departments that will be impacted most by upcoming retirements.
The increase in the workload, along with managing the changing demographics of members, has placed a burden on employees across the organization. Morale has declined as employees are feeling more stress. The positive message of growth in the organization is being overshadowed by the discontent of overworked employees. The senior leadership team has decided to coordinate a strategy session with executives and regional leads to address the identified issues.
Which is the most immediate strategy the HR leadership should implement to improve morale in the organization?
Regularly communicate information about the recruiting status across the organization to employees.
A company operates in a very cost-focused environment, keeping its customers in the forefront of every decision they make. A recent merger has doubled the company size and expanded the product offerings to better serve customers. Each of the merged organizations had a significantly different approach to HR’s service delivery. However, despite these and a number of other differences, the merger went ahead.
The merged company recently hired a new senior director of HR, selected primarily due to their expertise and experience in mergers and acquisitions. The senior director reports to the CEO and the president of the newly merged company and has been tasked with leading the integration activities from an HR perspective.
The HR director recognizes immediately that, aside from needing to get the new HR organization established, HR service delivery is critical due to increasing cost pressures, a larger global workforce, and increasing internal and external customer expectations. They meet with their new HR team and key business stakeholders to obtain valuable feedback and proposals.
Given the organizational focus, how should the HR director best proceed with the design of the new HR structure?
The HR director should work with their team to identify the specific cultural, people, and communication issues inherent to a merger.
A company operates in a very cost-focused environment, keeping its customers in the forefront of every decision they make. A recent merger has doubled the company size and expanded the product offerings to better serve customers. Each of the merged organizations had a significantly different approach to HR’s service delivery. However, despite these and a number of other differences, the merger went ahead.
The merged company recently hired a new senior director of HR, selected primarily due to their expertise and experience in mergers and acquisitions. The senior director reports to the CEO and the president of the newly merged company and has been tasked with leading the integration activities from an HR perspective.
The HR director recognizes immediately that, aside from needing to get the new HR organization established, HR service delivery is critical due to increasing cost pressures, a larger global workforce, and increasing internal and external customer expectations. They meet with their new HR team and key business stakeholders to obtain valuable feedback and proposals.
Which is the best approach for the HR director to use to incorporate the lessons learned from their experience into the integration efforts at the company?
Take time to understand the company’s needs and determine if the HR director’s experience is applicable.
A company operates in a very cost-focused environment, keeping its customers in the forefront of every decision they make. A recent merger has doubled the company size and expanded the product offerings to better serve customers. Each of the merged organizations had a significantly different approach to HR’s service delivery. However, despite these and a number of other differences, the merger went ahead.
The merged company recently hired a new senior director of HR, selected primarily due to their expertise and experience in mergers and acquisitions. The senior director reports to the CEO and the president of the newly merged company and has been tasked with leading the integration activities from an HR perspective.
The HR director recognizes immediately that, aside from needing to get the new HR organization established, HR service delivery is critical due to increasing cost pressures, a larger global workforce, and increasing internal and external customer expectations. They meet with their new HR team and key business stakeholders to obtain valuable feedback and proposals.
How can the HR director demonstrate HR’s strategic value in the integration activities?
Identify ways of protecting core business functions while capturing synergies between the two organizations.
The HR director of a mid-sized retailer recently has begun participating in the business strategy sessions. The senior leadership team (SLT) has completed their SWOT (strengths, weaknesses, opportunities, threats) analysis and has identified mobile capabilities as one of the organization’s weaknesses. Specifically, they lack a sophisticated web presence. Customers often complain about their experience buying online, particularly via mobile phones. While many searches are initiated on the website, few result in purchases.
Currently, the sales department is responsible for mobile sales. However, the sales leader and the sales team are traditional face-to-face salespeople, and developing the website is not their priority. The website is managed by a team that includes a seasoned sales professional who is unfamiliar with technology, a recent college graduate with a computer science degree, and a summer intern who is the child of the CEO. They are doing their best but are not equipped to efficiently create and maintain a mobile-supported website.
The HR director recognizes this opportunity to build organizational capability and credibility as a strategic business partner. The HR director recommends to the SLT that HR take responsibility for this issue and return to the next strategy session with recommendations. The CEO welcomes this suggestion and puts “Building our mobile capability” on the agenda for the following month’s session.
The day after the meeting, the sales director calls the HR director and says that after a conversation, the CEO has decided that the sales director should take the lead with developing the recommendation on building mobile capability. Which approach should the HR director initially take to clarify accountability for the website?
Meet with the sales director to discuss a possible strategic partnership to develop a strong set of recommendations for the SLT.
The HR director of a mid-sized retailer recently has begun participating in the business strategy sessions. The senior leadership team (SLT) has completed their SWOT (strengths, weaknesses, opportunities, threats) analysis and has identified mobile capabilities as one of the organization’s weaknesses. Specifically, they lack a sophisticated web presence. Customers often complain about their experience buying online, particularly via mobile phones. While many searches are initiated on the website, few result in purchases.
Currently, the sales department is responsible for mobile sales. However, the sales leader and the sales team are traditional face-to-face salespeople, and developing the website is not their priority. The website is managed by a team that includes a seasoned sales professional who is unfamiliar with technology, a recent college graduate with a computer science degree, and a summer intern who is the child of the CEO. They are doing their best but are not equipped to efficiently create and maintain a mobile-supported website.
The HR director recognizes this opportunity to build organizational capability and credibility as a strategic business partner. The HR director recommends to the SLT that HR take responsibility for this issue and return to the next strategy session with recommendations. The CEO welcomes this suggestion and puts “Building our mobile capability” on the agenda for the following month’s session.
The operations director suggests to the HR director that the new mobile leader role should report into the operations function. What action should the HR director take?
Offer to facilitate a discussion with the operations director and the SLT to consider the various options for where mobile should sit in the organization.
The HR director of a mid-sized retailer recently has begun participating in the business strategy sessions. The senior leadership team (SLT) has completed their SWOT (strengths, weaknesses, opportunities, threats) analysis and has identified mobile capabilities as one of the organization’s weaknesses. Specifically, they lack a sophisticated web presence. Customers often complain about their experience buying online, particularly via mobile phones. While many searches are initiated on the website, few result in purchases.
Currently, the sales department is responsible for mobile sales. However, the sales leader and the sales team are traditional face-to-face salespeople, and developing the website is not their priority. The website is managed by a team that includes a seasoned sales professional who is unfamiliar with technology, a recent college graduate with a computer science degree, and a summer intern who is the child of the CEO. They are doing their best but are not equipped to efficiently create and maintain a mobile-supported website.
The HR director recognizes this opportunity to build organizational capability and credibility as a strategic business partner. The HR director recommends to the SLT that HR take responsibility for this issue and return to the next strategy session with recommendations. The CEO welcomes this suggestion and puts “Building our mobile capability” on the agenda for the following month’s session.
Given cost constraints, most of the SLT is inclined to train existing staff to fill the gap in mobile sales. The HR leader has done research on this topic, has benchmarked best practices, and is convinced that bringing in the right external talent would accelerate the development of this business competency. Which is the best first step for the HR leader to take in strategically aligning resources and capability for the mobile sales function?
Share the research and provide the data necessary to influence the SLT’s view on considering external hires.
A 30-year-old beverage company manufactures under its own label as well as private labels for a number of retailers that operate internationally. Slim margins and tight competition in the industry have caused the company to look at its operations and decide to merge with a competitor.
The newly formed company will operate under the banner of the original company, and the second company will operate as an enhanced product line.
Employees in the European locations are not pleased that the merger is going ahead. The senior vice president (SVP) of HR has heard that employees are trying to mobilize and are planning a European Day of Action, where they will hold demonstrations, pass out leaflets, and conduct media interviews to share why this merger is not in the best interests of the employees. Employees are also requesting to meet with key organizational leaders, including the SVP of HR.
The final hurdle that the organization is awaiting is regulatory approval. Once that is received, the newly merged entity will further review the combined operations and duplication of positions, roles, and responsibilities. They believe they can reduce the overall workforce by 15%.
Which is the best first step the SVP of HR should take in response to the request of the European employees to meet with the organization’s leaders?
Review the works council agreement to determine the best advice to provide management.
A 30-year-old beverage company manufactures under its own label as well as private labels for a number of retailers that operate internationally. Slim margins and tight competition in the industry have caused the company to look at its operations and decide to merge with a competitor.
The newly formed company will operate under the banner of the original company, and the second company will operate as an enhanced product line.
Employees in the European locations are not pleased that the merger is going ahead. The senior vice president (SVP) of HR has heard that employees are trying to mobilize and are planning a European Day of Action, where they will hold demonstrations, pass out leaflets, and conduct media interviews to share why this merger is not in the best interests of the employees. Employees are also requesting to meet with key organizational leaders, including the SVP of HR.
The final hurdle that the organization is awaiting is regulatory approval. Once that is received, the newly merged entity will further review the combined operations and duplication of positions, roles, and responsibilities. They believe they can reduce the overall workforce by 15%.
Which actions should the SVP of HR take first to respond to the news about the threatened work actions?
Review the business continuity plan with leaders and develop a short-term staffing plan.
A 30-year-old beverage company manufactures under its own label as well as private labels for a number of retailers that operate internationally. Slim margins and tight competition in the industry have caused the company to look at its operations and decide to merge with a competitor.
The newly formed company will operate under the banner of the original company, and the second company will operate as an enhanced product line.
Employees in the European locations are not pleased that the merger is going ahead. The senior vice president (SVP) of HR has heard that employees are trying to mobilize and are planning a European Day of Action, where they will hold demonstrations, pass out leaflets, and conduct media interviews to share why this merger is not in the best interests of the employees. Employees are also requesting to meet with key organizational leaders, including the SVP of HR.
The final hurdle that the organization is awaiting is regulatory approval. Once that is received, the newly merged entity will further review the combined operations and duplication of positions, roles, and responsibilities. They believe they can reduce the overall workforce by 15%.
Which action should the SVP HR take to effectively communicate information about the merger’s effect on the workforce to the employees?
Create a global communication plan, beginning with a description of high-level changes and advising that details will follow after a thorough review.
The VP of HR in a national construction and architectural firm is asked to develop a corporate social responsibility (CSR) strategy to present to the CEO and the board of directors. The firm is widely dispersed across the country, with multiple locations falling into regional groupings.
The VP’s presentation, which focuses on high-level goals and benefits, is well received by the CEO and board of directors, who discuss how to best implement the strategy across the company. They decide that the best option is to pilot the strategy in one region, and evaluate its success. If it proves to be successful, the VP will be tasked with implementing the CSR initiative in the other regions, after making any necessary adjustments that have been identified through the pilot program.
The VP asks for input from the HR team when drafting a detailed version of the strategy and implementing the pilot program.
Which action should the VP take when drafting the company’s CSR strategy?
Research opportunities in the community that align with the organization’s core business goals.
The VP of HR in a national construction and architectural firm is asked to develop a corporate social responsibility (CSR) strategy to present to the CEO and the board of directors. The firm is widely dispersed across the country, with multiple locations falling into regional groupings.
The VP’s presentation, which focuses on high-level goals and benefits, is well received by the CEO and board of directors, who discuss how to best implement the strategy across the company. They decide that the best option is to pilot the strategy in one region, and evaluate its success. If it proves to be successful, the VP will be tasked with implementing the CSR initiative in the other regions, after making any necessary adjustments that have been identified through the pilot program.
The VP asks for input from the HR team when drafting a detailed version of the strategy and implementing the pilot program.
The CEO asks the VP of HR to ensure that the initiative supports the community while enhancing the knowledge, skills, and abilities of the company’s employees. Which action should the VP of HR take?
Partner with community organizations that are affected by the company’s activities.
The VP of HR in a national construction and architectural firm is asked to develop a corporate social responsibility (CSR) strategy to present to the CEO and the board of directors. The firm is widely dispersed across the country, with multiple locations falling into regional groupings.
The VP’s presentation, which focuses on high-level goals and benefits, is well received by the CEO and board of directors, who discuss how to best implement the strategy across the company. They decide that the best option is to pilot the strategy in one region, and evaluate its success. If it proves to be successful, the VP will be tasked with implementing the CSR initiative in the other regions, after making any necessary adjustments that have been identified through the pilot program.
The VP asks for input from the HR team when drafting a detailed version of the strategy and implementing the pilot program.
If the pilot is successful, which action should the HR team take to ensure success when implementing it in the other regions?
Develop criteria and measurement tools to determine CSR success across the organization.
The IT department at a large university has historically hired temporary employees for its entry-level positions. These positions are often low-paying, which leads to high turnover and the loss of high-potential talent. Because of the IT department’s large size, the in-house HR staff spends a fair amount of time and resources working on filling these positions. The HR staff believes that the IT department should consider hiring for permanent positions and offering more competitive salaries. However, leadership of the university has resisted this idea because of budgetary concerns and the belief that the IT department can always find a new graduate willing to work in a temporary position to obtain experience. The HR manager is finding that the HR staff cannot fulfill their other responsibilities because they are spending too much time focusing on the needs of the IT department.
Which action should the HR manager take to convince leadership at the university to approve offering permanent positions with higher salaries for the IT department?
Present a comparison of the cost of offering permanent positions with higher salaries to the cost of continuing to fill temporary positions at the current rate.
The IT department at a large university has historically hired temporary employees for its entry-level positions. These positions are often low-paying, which leads to high turnover and the loss of high-potential talent. Because of the IT department’s large size, the in-house HR staff spends a fair amount of time and resources working on filling these positions. The HR staff believes that the IT department should consider hiring for permanent positions and offering more competitive salaries. However, leadership of the university has resisted this idea because of budgetary concerns and the belief that the IT department can always find a new graduate willing to work in a temporary position to obtain experience. The HR manager is finding that the HR staff cannot fulfill their other responsibilities because they are spending too much time focusing on the needs of the IT department.
IT managers are concerned about the effects of turnover on morale. The managers ask the HR manager to lead a meeting with all IT department staff. Which action should the HR manager take for this meeting?
Explain to the IT department staff the efforts that the HR staff is making to reduce turnover in the IT department.
The IT department at a large university has historically hired temporary employees for its entry-level positions. These positions are often low-paying, which leads to high turnover and the loss of high-potential talent. Because of the IT department’s large size, the in-house HR staff spends a fair amount of time and resources working on filling these positions. The HR staff believes that the IT department should consider hiring for permanent positions and offering more competitive salaries. However, leadership of the university has resisted this idea because of budgetary concerns and the belief that the IT department can always find a new graduate willing to work in a temporary position to obtain experience. The HR manager is finding that the HR staff cannot fulfill their other responsibilities because they are spending too much time focusing on the needs of the IT department.
The HR manager suspects that leadership’s beliefs prevent hiring the best talent. Which action should the HR manager take to show leadership that the university must do more to compete for talent?
Share IT department metrics regarding how turnover of temporary IT staff affects project completion.
A successful beverage company controls key activities in its value chain in order to maintain uninterrupted production; this is the key to their profitability. Which actions should HR recommend managers focus on to assist in the organization creating value?
Implementing cross-training and job rotation strategies.
When a company executes a cost leadership or operational excellence strategy, from an HR perspective they should focus on implementing cross-training and job rotation strategies. The other options focus on differentiation through innovation or customer service. Decentralizing may or may not increase efficiency.
A new HR leader has been recently hired as the chief human resources officer (CHRO) for a global organization. The CEO has indicated a need for HR to demonstrate its strategic value to the organization and has provided the CHRO with full support to make any necessary changes, including adjustments to HR staffing and, if necessary, a complete restructuring of the department. The CEO has requested an HR strategic plan within a six-month period.
To better understand HR in the organization and to identify gaps, the CHRO develops and administers a survey to measure the current effectiveness of the HR team as well as perceptions regarding HR’s contribution to the success of the organization. The survey yields the following key themes for the CHRO to consider:
Internal clients value HR business partners and maintain strong relationships with them.
The HR team does a good job overall, but clients wish HR understood their clients’ businesses better.
While clients trust their business partners, they sometimes doubt the information or advice provided by the HR team.
Clients appreciate that the HR team will go outside the scope of their roles to take on tasks such as meeting and event planning when needed.
After review of the survey results, what is the best action the CHRO should take to better understand the themes uncovered?
Select a sample group of managers and employees to meet and review the results and to develop preliminary actions.
A new HR leader has been recently hired as the chief human resources officer (CHRO) for a global organization. The CEO has indicated a need for HR to demonstrate its strategic value to the organization and has provided the CHRO with full support to make any necessary changes, including adjustments to HR staffing and, if necessary, a complete restructuring of the department. The CEO has requested an HR strategic plan within a six-month period.
To better understand HR in the organization and to identify gaps, the CHRO develops and administers a survey to measure the current effectiveness of the HR team as well as perceptions regarding HR’s contribution to the success of the organization. The survey yields the following key themes for the CHRO to consider:
Internal clients value HR business partners and maintain strong relationships with them.
The HR team does a good job overall, but clients wish HR understood their clients’ businesses better.
While clients trust their business partners, they sometimes doubt the information or advice provided by the HR team.
Clients appreciate that the HR team will go outside the scope of their roles to take on tasks such as meeting and event planning when needed.
Given the lack of trust in members of the HR team, which step should the CHRO take to best improve the perception of team members?
Task the HR business partners with facilitating interactions between stakeholders and other HR team members.
A new HR leader has been recently hired as the chief human resources officer (CHRO) for a global organization. The CEO has indicated a need for HR to demonstrate its strategic value to the organization and has provided the CHRO with full support to make any necessary changes, including adjustments to HR staffing and, if necessary, a complete restructuring of the department. The CEO has requested an HR strategic plan within a six-month period.
To better understand HR in the organization and to identify gaps, the CHRO develops and administers a survey to measure the current effectiveness of the HR team as well as perceptions regarding HR’s contribution to the success of the organization. The survey yields the following key themes for the CHRO to consider:
Internal clients value HR business partners and maintain strong relationships with them.
The HR team does a good job overall, but clients wish HR understood their clients’ businesses better.
While clients trust their business partners, they sometimes doubt the information or advice provided by the HR team.
Clients appreciate that the HR team will go outside the scope of their roles to take on tasks such as meeting and event planning when needed.
Which steps should the CHRO take first to effectively communicate the changes in HR strategy and structure that are being considered to the organization?
Develop a detailed communication plan, and review it with the senior leadership team.
An organization has mature products and services, and HR believes that the organization has grown somewhat complacent and is not learning or improving. What could HR recommend the organization adopt to get it out of the status quo?
Balanced scorecards
A balanced scorecard features a feedback and learning component. This provides organizations with more opportunities to learn from ongoing performance.
A domestic airline rapidly gains market share through an innovative business model, a charismatic leader, a unique work environment, and sound HR practices. This has led to a global strategic plan of aggressively acquiring small local airlines in neighboring countries.
The VP of HR has been with the airline for 15 years and is an active member of its leadership team. The VP of HR is a big believer in the benefits of an inclusive and multicultural workforce. This is the VP of HR’s first experience with globalizing HR practices. An immediate conflict between headquarters and local policies emerges when a country HR manager raises the issue of discounted tickets for exempt U.S. management in the total rewards package. In the headquarters country, exempt management is paid on a salary basis, but in some of the new countries of operation, management is paid contractually on an hourly basis. The VP of HR is concerned that expanding the benefit globally to all management will create excessive costs and has not taken action after several requests. Frustrated, a country HR manager writes directly to the CEO about the issue, arguing that limiting this benefit may lead to legal challenges or employee relations issues that could damage the company’s reputation, the work climate, and the ability to attract talent in the future.
How should the VP of HR approach the country HR manager who went around them and wrote directly to the CEO?
Meet with the manager virtually or in person as soon as possible and have a candid and open discussion of the matter.
A domestic airline rapidly gains market share through an innovative business model, a charismatic leader, a unique work environment, and sound HR practices. This has led to a global strategic plan of aggressively acquiring small local airlines in neighboring countries.
The VP of HR has been with the airline for 15 years and is an active member of its leadership team. The VP of HR is a big believer in the benefits of an inclusive and multicultural workforce. This is the VP of HR’s first experience with globalizing HR practices. An immediate conflict between headquarters and local policies emerges when a country HR manager raises the issue of discounted tickets for exempt U.S. management in the total rewards package. In the headquarters country, exempt management is paid on a salary basis, but in some of the new countries of operation, management is paid contractually on an hourly basis. The VP of HR is concerned that expanding the benefit globally to all management will create excessive costs and has not taken action after several requests. Frustrated, a country HR manager writes directly to the CEO about the issue, arguing that limiting this benefit may lead to legal challenges or employee relations issues that could damage the company’s reputation, the work climate, and the ability to attract talent in the future.
Which method should the VP of HR use to best communicate the final policy on this matter to the organization?
Distribution of the policy with a video message from the CEO to be played at staff meetings throughout the entire organization.
A domestic airline rapidly gains market share through an innovative business model, a charismatic leader, a unique work environment, and sound HR practices. This has led to a global strategic plan of aggressively acquiring small local airlines in neighboring countries.
The VP of HR has been with the airline for 15 years and is an active member of its leadership team. The VP of HR is a big believer in the benefits of an inclusive and multicultural workforce. This is the VP of HR’s first experience with globalizing HR practices. An immediate conflict between headquarters and local policies emerges when a country HR manager raises the issue of discounted tickets for exempt U.S. management in the total rewards package. In the headquarters country, exempt management is paid on a salary basis, but in some of the new countries of operation, management is paid contractually on an hourly basis. The VP of HR is concerned that expanding the benefit globally to all management will create excessive costs and has not taken action after several requests. Frustrated, a country HR manager writes directly to the CEO about the issue, arguing that limiting this benefit may lead to legal challenges or employee relations issues that could damage the company’s reputation, the work climate, and the ability to attract talent in the future.
How best can the VP of HR prevent the circumvention of authority issue from recurring?
Create HR communication responsiveness procedures focused on timely follow-up and tracking of items received.
The sales department of a company is in the midst of reorganization. An important factor in the decision to reorganize was the president’s concern over lagging sales and missed targets for the past two years and a desire to restructure the compensation plan for this group. Once the reorganization was announced, the director of the sales group resigned. This gave the company the opportunity to restructure the leadership of this area, resulting in a new vice president (VP) of sales being hired, replacing the former director.
As part of the new VP’s onboarding, the HR director updates the VP on the sales reorganizing activities to date and on employee performance in the area. The HR director also shares the proposed structural changes and indicates that the former VP sales leader may have shared these plans prematurely with the sales staff. The plans include possible staff reductions and ending unprofitable customer relationships.
What recommendation should the HR director make to influence the VP to focus on the retention of key salespeople?
Develop a bonus system to align with the mission, vision, and core values of the organization.
The sales department of a company is in the midst of reorganization. An important factor in the decision to reorganize was the president’s concern over lagging sales and missed targets for the past two years and a desire to restructure the compensation plan for this group. Once the reorganization was announced, the director of the sales group resigned. This gave the company the opportunity to restructure the leadership of this area, resulting in a new vice president (VP) of sales being hired, replacing the former director.
As part of the new VP’s onboarding, the HR director updates the VP on the sales reorganizing activities to date and on employee performance in the area. The HR director also shares the proposed structural changes and indicates that the former VP sales leader may have shared these plans prematurely with the sales staff. The plans include possible staff reductions and ending unprofitable customer relationships.
What should the HR manager do to ensure that the new incentive plan will drive behaviors that will result in increased sales?
Communicate to sales the reason why the plan is being implemented, including how individual performance drives incentives.
The sales department of a company is in the midst of reorganization. An important factor in the decision to reorganize was the president’s concern over lagging sales and missed targets for the past two years and a desire to restructure the compensation plan for this group. Once the reorganization was announced, the director of the sales group resigned. This gave the company the opportunity to restructure the leadership of this area, resulting in a new vice president (VP) of sales being hired, replacing the former director.
As part of the new VP’s onboarding, the HR director updates the VP on the sales reorganizing activities to date and on employee performance in the area. The HR director also shares the proposed structural changes and indicates that the former VP sales leader may have shared these plans prematurely with the sales staff. The plans include possible staff reductions and ending unprofitable customer relationships.
What actions should the HR director take to demonstrate and understanding of the priorities of both the sales function and the organization?
Listen to the VP’s needs and thoughts, and then offer ideas to create the appropriate sales structure.
A small non-profit organization has just hired a new CEO. Over the past few years under the previous CEO, the organization has struggled to remain in business as revenues have dropped. Morale and engagement have also dropped significantly. Based on the HR manager’s observations, this drop in morale and engagement was connected to the previous CEO’s leadership practices as well as the declining revenues. However, the HR director believes the low engagement also contributed to the continued decline in revenues. The new CEO, who has heard that morale and engagement are low in the organization, wants to make a quick impact on the organization by finding ways to increase morale and engagement rapidly. The CEO believes that HR is core to organizational success and that the current employees are the most important resource. The CEO calls a meeting with the HR director for an evaluation of the current state of the staff. During the presentation, the HR director shares data about hiring and turnover rates, benefit usage, and compensation ratios.
The new CEO feels that, for engagement to increase, employees must be united around a new, compelling strategy. The CEO has the basic idea of what the new strategy should be. How should the HR director advise the CEO to move forward?
Suggest that the CEO walk throughout the organization and informally chat with employees.
A small non-profit organization has just hired a new CEO. Over the past few years under the previous CEO, the organization has struggled to remain in business as revenues have dropped. Morale and engagement have also dropped significantly. Based on the HR manager’s observations, this drop in morale and engagement was connected to the previous CEO’s leadership practices as well as the declining revenues. However, the HR director believes the low engagement also contributed to the continued decline in revenues. The new CEO, who has heard that morale and engagement are low in the organization, wants to make a quick impact on the organization by finding ways to increase morale and engagement rapidly. The CEO believes that HR is core to organizational success and that the current employees are the most important resource. The CEO calls a meeting with the HR director for an evaluation of the current state of the staff. During the presentation, the HR director shares data about hiring and turnover rates, benefit usage, and compensation ratios.
What would be an effective next step?
Hold listening sessions with employees to obtain their feedback on the strategy before finalizing it.
A small non-profit organization has just hired a new CEO. Over the past few years under the previous CEO, the organization has struggled to remain in business as revenues have dropped. Morale and engagement have also dropped significantly. Based on the HR manager’s observations, this drop in morale and engagement was connected to the previous CEO’s leadership practices as well as the declining revenues. However, the HR director believes the low engagement also contributed to the continued decline in revenues. The new CEO, who has heard that morale and engagement are low in the organization, wants to make a quick impact on the organization by finding ways to increase morale and engagement rapidly. The CEO believes that HR is core to organizational success and that the current employees are the most important resource. The CEO calls a meeting with the HR director for an evaluation of the current state of the staff. During the presentation, the HR director shares data about hiring and turnover rates, benefit usage, and compensation ratios.
One of the symptoms of the low engagement is that employees do not work the requisite number of hours, often coming in late and leaving early. Managers are not sure what to do, as they are afraid that punishing the employees will further hurt engagement. What should the HR director do?
Visit with any such employees one-on-one to discuss the reason for their behavior and set goals for improvement.
A company has recently had a few highly competent, advanced-level salespeople turn over, causing some financial setback. Despite this, employees are still engaged, although occasionally expressing dissatisfaction with the amount of work requiring approval by managers. Another pressing issue has been the rising costs of health care. Currently, all employees are enrolled in the same health-care plan with great coverage. However, it has become difficult to maintain enrollment of all employees in this plan. Top management has assigned the HR director two major tasks: a) fix the turnover and engagement issues, and b) reduce expenditures on health-care benefits. Management has also made it clear that it does not want to sacrifice resources from other areas of the company to maintain the current health-care coverage and that it wants to keep its relationship with the current health-care provider. Aside from the current plan, the health-care provider offers a more affordable general plan that covers a wide range of conditions but with a high deductible, as well as a number of more affordable plans that each focus on a narrower range of conditions but with a low deductible.
Management wants the HR director to determine how the organization would be negatively impacted by switching to a more basic plan. Which response should the HR director choose?
Obtain information on plan usage from the health-care plan provider to quantify the impact of switching to a more basic plan.
A company has recently had a few highly competent, advanced-level salespeople turn over, causing some financial setback. Despite this, employees are still engaged, although occasionally expressing dissatisfaction with the amount of work requiring approval by managers. Another pressing issue has been the rising costs of health care. Currently, all employees are enrolled in the same health-care plan with great coverage. However, it has become difficult to maintain enrollment of all employees in this plan. Top management has assigned the HR director two major tasks: a) fix the turnover and engagement issues, and b) reduce expenditures on health-care benefits. Management has also made it clear that it does not want to sacrifice resources from other areas of the company to maintain the current health-care coverage and that it wants to keep its relationship with the current health-care provider. Aside from the current plan, the health-care provider offers a more affordable general plan that covers a wide range of conditions but with a high deductible, as well as a number of more affordable plans that each focus on a narrower range of conditions but with a low deductible.
Which should the HR director do regarding the turnover and engagement issues of high-level salespeople?
Conduct exit interviews with the salespeople who have left the company.
A company has recently had a few highly competent, advanced-level salespeople turn over, causing some financial setback. Despite this, employees are still engaged, although occasionally expressing dissatisfaction with the amount of work requiring approval by managers. Another pressing issue has been the rising costs of health care. Currently, all employees are enrolled in the same health-care plan with great coverage. However, it has become difficult to maintain enrollment of all employees in this plan. Top management has assigned the HR director two major tasks: a) fix the turnover and engagement issues, and b) reduce expenditures on health-care benefits. Management has also made it clear that it does not want to sacrifice resources from other areas of the company to maintain the current health-care coverage and that it wants to keep its relationship with the current health-care provider. Aside from the current plan, the health-care provider offers a more affordable general plan that covers a wide range of conditions but with a high deductible, as well as a number of more affordable plans that each focus on a narrower range of conditions but with a low deductible.
Which should the HR director do to reduce the risk of turnover of current salespeople?
Allow the salespeople more independence to make work-related decisions.
Management tells HR that it should budget for an increase in the hiring rate in the upcoming year but that HR head count cannot increase. How will this affect the HR budget?
The budget for variable cost items will increase.
The budget cannot remain the same because variable costs associated with hiring tasks (costs affected by the volume of activity) will increase. As long as function responsibilities, facilities, and staffing levels remain the same, fixed costs should stay the same. The increase in costs will be driven by the number of new hires; it will not be an incremental increase in the budget.
In a casual conversation, an operations manager expresses concern to an HR manager about operations’ ability to argue persuasively for funding to develop a new order fulfillment system in the upcoming budgeting cycle. Which approach should HR recommend to best demonstrate collaboration toward an effective solution?
Cost-benefit analysis of the new system’s strategic input.
HR can help operations conduct a cost-benefit analysis that includes labor-related costs and savings (e.g., savings in wages from increased efficiency, costs for training employees in the new system). This analysis can support the strategic impact of the investment and provide the basis for measuring strategic success in this area. Providing training and coaching will not address operations’ need to align its activity with the organization’s strategy.
On a balance sheet, what are considered liabilities?
What an organization owes.
Liabilities are what an organization owes. They can include items such as rent, loans or notes, and wages and benefits earned but not paid.
What financial document lists the revenues, expenses, and profits of an organization for a designated period of time?
Income statement
The income statement shows revenues, expenses, and profits for the organization. The balance sheet shows its assets, liabilities, and shareholders’ equity.
When would a return on investment (ROI) analysis be an effective metric?
When a function is seeking budget to hire new staff.
ROI analysis is used to evaluate an investment opportunity. The only investment scenario in the choices is hiring new staff. The ROI analysis would compare the value of the output of additional staff (the return) with the costs to hire and retain staff (the investment).
Which non financial performance measure is most likely to provide an idea of a company’s competitive strength?
Share of market
Share of market may signify the competitive strength of an organization in relation to its competitors. Another potential nonperformance measure which may indicate competitive strength is market position, which was not listed as an option.
Which situation would lead to a high debt to asset ratio in an organization’s financial performance?
Funding its growth strategy through borrowing.
The amount of exposure to risk from debt that an organization incurs is reflected in the debt to asset ratio. Payments would be reflected in accounts receivable turnover. The others are not related to debt.
As an organization grows, it finds that it needs to develop a more formalized sales pipeline to close more sales. How can HR use the sales pipeline to add organizational value?
Use benchmarked information on salespersons to identify training needs.
A benefit of using a sales pipeline is the opportunity to measure sales team performance. Performance information can be used to identify gaps in skills or suggest training that might be offered in order to lift up underperforming sales representatives. While the sales pipeline might be an input to a workforce size analysis, the pipeline is fairly short-term information and workforce planning requires longer-term forecasts.
An organization has transitioned to a model where most employees work from home. Several smaller regional offices are being planned, and the headquarters lease will be allowed to expire. What does HR need to update to ensure a smooth flow of business after the changes?
Organizational charts
Organizational charts illustrate the hierarchy within an organization. For dispersed organizations, the chart is an excellent tool for keeping track of where employees are located and how they fit into the structure and hierarchy.
