Business Acumen & Structure of the HR Function Flashcards
HR structural alternative in which centers with specific areas of expertise develop HR policies in those areas; each unit can then select what it needs from a menu of these services.
Shared services HR model
The common processes folded into shared service centers include payroll, procurement, accounts payable/receivable, travel expenses, health benefits enrollment, and pension administration.
Arrangement in which an enterprise and a vendor share different tasks within a larger complex, often strategic responsibility.
Cosourcing
HR structural alternative that allows organizations with different strategies in multiple units to apply HR expertise to each unit’s specific strategic needs.
Dedicated HR
HR structural alternative in which headquarters HR specialists craft policies and HR generalists located within divisions or other locales implement the policies, adapt them as needed, and interact with employees.
Functional HR
Systematic and comprehensive evaluation of an organization’s HR policies, practices, procedures, and strategies.
HR Audit
The most desired outcome of an audit would be a clear sense of where performance could be improved and an action plan for implementing these improvements.
Part of a service contract where the service expectations are formally defined.
Service-level agreement (SLA)
Ability to use information to gain a deeper understanding of an organization and make sound business decisions.
Business intelligence
The benefit created when an organization meets its strategic goals; measure of usefulness, worth, or importance.
Value
Ratio of gross profit to net sales.
Gross profit margin
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)
Processing applications that store data in a multidimensional “cube,” which enables users to analyze data quickly in a variety of different ways.
Online analytical processing (OLAP)
Financial, physical, and sometimes intangible properties an organization owns.
Assets
Statement that reports revenues, expenses, and profits for a specified period of time, for example, monthly, quarterly or annually.
Income statement (P&L statement)
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 process by which an organization creates the product or service it offers to the customer.
Value chain
Money an organization owes its vendors and suppliers.
Accounts payable
All HR personnel located within HR department; delivers services to entire organization.
Centralized HR
Three major roles of HR professional
strategic, operational, and administrative
- Example: Reconciling benefits is a transactional activity, which is an administrative task. Conducting interviews and ensuring compliance with laws and regulations are both operational tasks. Creating career development plans is a strategic function of HR.*
- The three major areas of HR’s involvement in strategy are participating in creating the organizational goals, aligning HR’s functional strategy with the organizational strategy, and then supporting other functions as they work to fulfill their own strategic goals.*
Human capital value-add metric
What is this and how is it calculated?
This metric shows growth in employee productivity.
It is calculated by subtracting nonemployment expenses (e.g., materials, rent, utilities) from revenue, and dividing the difference by the number of employees. A value should be established at the beginning of the initiative so that a later value can be compared with it to show effect.
The percentage of applicants who proceed to the next step of the selection process
Applicant yield ratio
demonstrates the effectiveness of recruiting methods
Cost per hire calculation
total costs of hiring divided by number hired
demonstrates increased efficiencies in the recruitment and hiring process
the proportion of selected applicants who are later judged to be successful on the job
Success ratio
indicates the effectiveness of the recruiting, selection, and orientation methods
the ratio of lost days to number of employees
Absence ratio
It can reflect the benefits of a change in workplace conditions.
What are the 4Ps of marketing?
Price (how much to charge), product (what to offer), promotion (how to reach potential customers), and place (where or how to sell).
Marketing strategies are often characterized as “push” or “pull.”
Used to identify their key performance indicators (KPIs) and to make sure that the objectives used to measure performance are strategically aligned to the various sources of value to the organization and are balanced.
Balanced scorecard approach
Examples: finance, customers, internal business processes, learning & growth
SMARTER acronym
Specific. Focused on a narrowly defined activity rather than a generalization.
Measurable. Capable of objective measurement. (Note that even intangibles can be measured objectively once a measurement system is established.)
Attainable. Requiring effort but within reach given effort and the right tools and support.
Relevant. Producing an outcome that is in the line of sight with the goal.
Timebound. Subject to evaluation within a reasonable and defined time frame.
Evaluated. Assessed at the designated time or interval, often continuously in the form of progress or pulse checks.
Revised. Changed to reflect what has been learned. The objective-setting process is repeated to make sure that the activities chosen are still the right activities and that the targets for results are attainable but also push performance to higher levels.
Stages of a company’s life cycle
Introduction, growth, maturity, decline/stagnancy/continued growth
Balance sheet concepts
Porter’s “Five Forces” a strategic evaluation
Budgeting considerations
4 steps to a business case
Cash flow statement concepts
Examples of nonfinancial metrics
Examples of financial ratios
Financial ratios
4 budgeting types + their characteristics
Understanding the financial statements helps the HR professional:
4 workforce issues that result from M&A changes
Structural, technological, financial, legal
HR Due Diligence Topics for M&A Strategies
