Chapter 2 - HR Strategy and Planning

Question 1

Define “Strategy”.

Answer 1

-A plan an organization follows for how to compete successfully, survive, and grow.
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Question 2

Define “Strategic Planning.”

Answer 2

-The process of defining organizational strategy, or direction, and allocating resources toward its achievements.
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Question 3

Define “Organizational Mission”.

Answer 3

-The core reason for the existence of the organization and what makes it unique.
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Question 4

Define “Organizational Core Values”.

Answer 4

-Principles that create the operating philosophy for organizational decisions.
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Question 5

Define the acronym “VUCA”.

Answer 5

-Volatile
-Uncertain
-Complex
-Ambiguous
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Question 6

Define “Triple Bottom Line”.

Answer 6

It considers the organization’s impact on three major areas:
-economic
-social
-environmental
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Question 7

Define “Strategic HR Management”.

Answer 7

-The appropriate use of HR management practices to gain or keep a competitive advantage.
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Question 8

Define “Multinational Corporation” (MNC).

Answer 8

-An organization that has facilities and other assets in at least one country other than its home country.
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Question 9

Define “Offshoring”.

Answer 9

-A company’s relocation of a business process or operation from one country to another.
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Question 10

Define “Human Resource Planning”.

Answer 10

-The process of analyzing and identifying the need for and availability of people so that the organization can meet its strategic objectives.
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Question 11

Define “Environmental Scanning”.

Answer 11

-The assessment of external and internal environmental conditions that affect the organization.
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Question 12

Define “Succession Planning”.

Answer 12

-The process of identifying a plan for the orderly replacement of key employees.
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Question 13

Define “Forecasting”.

Answer 13

-Using information from the past and present to predict future conditions.
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Question 14

What are the lengths of time for short range, intermediate range, and long range forecasting plans?

Answer 14

-Short range: 6-12 months
-Intermediate range: 1-3 years
-Long rang: over 3 years
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Question 15

What are the two types of forecasting methods?

Answer 15

-Qualitative and quantitative

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Question 16

What are five effective ways that can make layoffs effective?

Answer 16

1. Identify core jobs
2. Identify KSAs needed for business strategy
3. Protect bottom line and corporate brand
4. Constantly communicate with employees
5. Pay attention to the survivors
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Question 17

Define “Severance Benefits”.

Answer 17

-Temporary payments made to laid-off employees to ease the financial burden of unemployment.
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Question 18

Define “Outsourcing”.

Answer 18

-Transferring the management and performance of business function to an external service provider.
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Question 19

Define “Alternative Work Arrangements”.

Answer 19

-Nontraditional schedules that provide flexibility to employees.
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Question 20

What does the abbreviation “M&A” stand for?

Answer 20

-Mergers and Acquisitions

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Question 21

Define “Due Diligence”.

Answer 21

-A comprehensive assessment of all aspects of the business being acquired.

Question 22

During M&A integration, what are four important factors in changing culture?

Answer 22

1. Define the desired behavior
2. Deploy role models
3. Provide meaningful incentives (for role models, etc.)
4. Provide clear and consistent messages (Do what you say you’ll do)
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Question 23

Define “Effectiveness”, with relevance to measuring HR and human capital.

Answer 23

-The ability of a program, project, or task to produce a specific desired effect or result that can be measured.
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Question 24

Define “Efficiency”.

Answer 24

-The degree to which operations are carried out in an economical manner.
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Question 25

What does the abbreviation “KPI” stand for?

Answer 25

-Key performance indicators

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Question 26

Define “HR Metrics”.

Answer 26

-Specific measures of HR practices

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Question 27

Define “HR Analytics”.

Answer 27

-An evidence-based approach to making HR decisions on the basis of quantitative tools and models.
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Question 28

Define “Benchmarking”.

Answer 28

-The process of comparing an organization’s business results to industry standards or best practices.
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Question 29

Define “Balanced Scorecard”.

Answer 29

-A framework that organizations use to report on a diverse set of performance measures.
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Question 30

What four areas of performance do balanced scorecards measure?

Answer 30

1. Financial measures
2. Internal business processes
3. Customer relations
4. Learning and growth activities
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Question 31

Define “TCOW”.

Answer 31

-“The Total Cost of Work”
-A comprehensive measure that takes into account the full cost for all people that contribute work to the organization.
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Question 32

With regard to TCOW, what formula is used to calculate revenue per employee?

Answer 32

Revenue / head count (FTE)

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Question 33

What formula is used to calculate Return on Investment?

Answer 33

ROI = C / A+B
A = Operating costs for a new or enhanced sys. for the time period
B = One-time cost of acquisition and implementation
C = Value of gains from productivity improvements for the time period
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Question 34

What is “HCVA”?
What is it used to calculate?
What is the formula used to calculate it?

Answer 34

-Human Capital Value Added
-Used to calculate operating profit per FTE
Revenue - (Operating expenses [Compensation + Benefit costs]) / FTE
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Question 35

What is HCROI?
What does it calculate?
How is it calculated?

Answer 35

-Human Capital Return on Investment
-Used to calculate the amount of profit derived from investments in labor.
Revenue - (Operational expenses - [compensation + benefit costs]) / (compensation + benefit costs)
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Question 36

What does “HEVA” stand for?
What is it used to calculate?
What is the formula used to calculate it?

Answer 36

-“Human Economic Value Added”
-Used to calculate wealth created per employee
Net profit after taxes - Cost of capital / FTE
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Question 37

Define “HR Audit”.

Answer 37

-A formal research effort to assess the current state of an organization’s HR practices.
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Question 38

What are some types of HR audits?

Answer 38

-Compliance audit
-Benefit programs audit
- I-9 audit
-Specific program audit
-Full HR audit
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