HR Competencies Flashcards
Levels of Law
National, Sub-national, Extraterritorial
Nationl
laws enacted by the highest or federal legislative bodies of a country, intended to apply across the entire nation.
Subnational
Example: municipalities, states, provinces, or regions within a nation. In the U.S. national law supersedes state laws. Canada is opposite of the U.S.
Extraterritorial
Laws that extend the power of a country’s laws over its citizens outside that country’s sovereign national boundaries. This is important for HR professionals, affects assignee’s or employees traveling for work.
Regional/Superanational
Binding agreements amount nations of a region. Example: European Union. Regional or Supranational rules may supersede conflicting national laws among participants; this is referred to as primacy or supremacy.
International
Involves both the relationships between nations and the treatment of individuals within national boundaries. International laws generally apply in a country when that country has ratified a related treaty or agreement.
Civil Law
Legal system based on written codes approved by legislative bodies.
Common law
Legal system based on legal precedent-previous judicial decisions.
Religious Law
Legal system based on religious beliefs and conventions.
Rule of law
No individual is beyond the reach of the law; authority is exercised in accordance with written and publicly disclosed laws.
Due process
Laws are enforced only through accepted, codified procedures, thus avoiding arbitrary treatment and abuse of power
Jurisdiction
The right of a legal body to exert judicial authority over a region, subject matter, or individual.
Conflict of laws
A situation in which the laws of two or more jurisdictions differ and may exert a different result on a legal case depending on which system is deemed to have jurisdiction.
Forum or jurisdiction shopping
The Practice of taking complaints to jurisdictions sympathetic to the complainants’ case.
Business Acumen
KSAOs needed to understand the organization’s operations, functions and external environment, and to apply business tools and analyses that inform HR initiatives and operations consistent with the overall strategic direction of the organization.
Value
Refers to an organization’s success in meeting its strategic goals.
Value Chain
Represents the process by which an organization creates the product or service it offers to the customer. AKA business model.
Strategy
Plan of action for accomplishing an organization’s long-range goals to create value.
strategy must look inward, toward the strengths and vulnerabilities of the organization
The strategy must look outward, toward possible external influences, opportunities, and obstacles.
Strategic Planning
A process of setting goals and designing a path toward a competitive position.
Strategic Management
Actions that leaders takes to move their organizations toward those goals and create value for all stakeholders.
3 levels of strategy
Organizational, Business Unit, Operational
Organizational Strategy
Focuses on the future of the organization as a single unit- a general vision of the future it seeks and the long-term goals
Business Unit
Address questions of how and where the organization will focus to create value.
Operational Strategy
Reflects the way in which organizational and business unit strategies are translated into action at the functional level through functional strategies.
Measuring Strategic Performance
Measuring performance helps organizations determine whether strategic initiatives have been implemented as planned, the initiative is having the intended effect, Investment in the initiative is returning benefits to the organization.
Performance data is gathered and compared to performance objectives.
Effectiveness, Efficiency, impact
Effectiveness
Is the initiative accomplishing the objective? For example, has a new recruiting program resulted in an increase in candidates?
Efficiency
Is the initiative producing results that exceed the investment in it? Requires finding the most time-and cost-effective processes to achieve the objectives. Example - The new recruitment program must return sufficient economic benefits (through improved retention and productivity) to recoup the investment.
Impact
Is the initiative helping to move the organization toward its strategic goals? Is it making a difference?
Key Performance Indicators (KPIs)
Quantifiable measures of performance used to gauge progress toward strategic objectives or agreed standards of performance. Example - KPIs could be the number of manufacturing defects in each completed product or the number of supervisors trained in a quality improvement process.
Customer
Defines value in terms of their needs, which may include economy, convenience, reliability, or innovation.
Suppliers
Value economic stability, fair treatment, and control over their businesses.
Employees
Generally seeking economic stability, fair and transparent treatment, safe conditions, fulfilling work, and opportunities for development.
Life Cycle: Introduction
Revenue is low because there is little market awareness
Life Cycle: Growth
As time proceeds, revenue begins to increase. Rate of growth will vary by industry, enterprise, or product.
Life Cycle: Maturity
The market is saturated and growth occurs only through introduction of new products or customer groups.
Michael Porter’s 5 Forces
Bargaining power of suppliers, threat of substitution, threat of entry, bargaining power of buyers.
Threat of substitution
How easy is it for a competitor to capture customers by offering a similar product or a product that satisfies the same need but perhaps in a different way.
Threat of entry
How easy is it for a new competitor to enter the industry? How much capital investment is required? How much time does it generally take for a new entry to become a threat to market share?
Bargaining Power of Suppliers
How vulnerable are organizations in this industry to the actions of upstream supply chain partners? Are there few suppliers or many? What would happen if a supplier went out of business or was bought by a competitor?
Bargaining power of buyers
How vulnerable are organizations to actions by customers? Do consumers view products as valued brands or as commodities to be shopped for and purchased at the lowest price?
Rivalry among existing competitors
All of the other forces have the potential to increase the intensity of competition within the industry. A concentration of suppliers or buyers will trigger competition.
4 Commonly used budgeting methods
Zero-based, incremental, formula, activity-based
Zero-based
All objectives and operations are given priority ranking and funds are given in order. All expenditures must be justified for each new period, and budgets start at zero.
Incremental
AKA line-item budgeting and traditional. Prior budget is the basis for the next budget. Additional funds must be requested based on need and objectives.
Formula
Different units or operations receive varying percentages of the budget.
Activity-based
The basis for budgeting is not how much to divide a set amount of money, but how much it costs to perform different enterprise activities. Funding may be allocated based on the strategic significance of the activities.
Business case
A presentation to management that establishes that a specific problem exists and argues that the proposed solution is the best way to solve the problem in terms of time, cost efficiency and probability of success.
HR Business Case: Statement of need
This is the condition or change impelling the function’s action.
HR Business Case:Recommended Solution
The objectives of an ideal solution are defined, and the proposed action is described in sufficient detail to show how it meets these objectives.
Business Case: Risks and opportunities
Outcomes that could decrease the project’s chance for success, outcomes that could present new opportunities that would require action.
Business Case: Estimated Costs and time frame
Project budget should include all forseeable elements (labor, equipment, fees, travel, and so on) plus a reserve for the unforeseeable based on the project’s risk.
Create an effective business case by
Research your proposal carefully, gather facts, investigate alternatives, consider risks, Align your proposal with organizational strategy. get early buy-in from key decision makers and influencers. Explain the issue and needs by using facts not emotion
Business Intelligence
Process is greatly improved when an organization has a central database and a business intelligence application that allows analysts to retrieve timely, accurate, and complete data and transform that data into “actionable intelligence” that can be used to make organizational decisions.
Business Intelligence
Applications support analysis of historical performance, forecasts of future performance and needs, and simulations that show the effect of actions on defined variables. BI tools can be used to generate simple spreadsheets as well as dashboards that graphically present current data on prioritized metrics.
Balance Sheet
Indicator of the organization’s financial health.
Assets=
Liabilities + Equity
Assets
What an organization owns. They can be tangible (cash or cash equivalents, inventory of finished product of materials, property, and equipment.) or intangible (copyrights and patents, proprietary knowledge).
Accounts Receivable
the money an organization’s customers owe the organization. Doubtful accounts-probably long overdue and uncollectible-are deducted from AR.
Liabilities
What an organization owes. These are items such as rent, loans or notes, wages and benefits that have been earned but not paid.
Equity
Combined with liabilities in the balance sheet because it represents what a company owes to either its owners or its shareholders. Equity is what is left of a company’s assets after its liabilities have been discharged.
Stockholder Equity
Value of all stock held by investors.
Income Statement
Compares revenues, expenses, and profits over a specified period of time-usually a year or a quarter
Revenues - Expenses
Net Income
Gross profit
Sales revenue - the costs of producing what is sold.
Gross profit margin
compares gross profit with sales
Gross profit margin
gross profit/net sales
Net income
What a business has after paying interest and taxes. It is available for reinvestment or for distribution to owners and stockholders.
Net profit margin
Net income/net sales=net profit margin
Cash flow statement
Illustrates the effect of all organizational activities. Activities that both consume value (production & administration) and produce value(sales & investments) on how much cash or cash equivalents the organization has on hand.
Cash flow statement shows how money is following into and out of the organization through
operations, investing, and financing over a defined period of time. Financial data for the cash flow statement comes from the income statement and the balance sheet.
Current Liquidity Ratio
Indicates level of working capital. Creditors prefer a higher current ratio
Current Liquidity Ratio forumla
Current assets/current liabilities
Debt to asset
Leverage ratio reflecting the amount of exposure to risk from debt that an organization has assumed. A number greater than 1 indicates that an organization has more debt than assets
Debt to asset formula
Total Liabilities/total assets
Debt to equity
Leverage ratio reflecting how an organization is funding its growth. This varies by industry and strategy type.
Debt to equity formula
Total debt/ shareholders’ equity
Accounts Receivable turnover
Activity ratio that measures the efficiency of debt collection. A higher ratio is preferable, but a ratio that is too high could indicate excessively tight credit policies that could hurt sales.
Accounts Receivable Turnover Ratio Formula
Net credit sales/average AR
Gross Margin
Profitability ratio showing the percentage of total sales revenue after incurring the direct costs of producing goods and services sold. The higher the percentage, the more the company retains on each dollar of sales to service its other costs and obligations.
Earnings before interest, taxes, depreciation, and amortization (EBITDA) margin.
Profitability ratio often used as measure of management performance.
Gross margin ratio formula
Total sales-Cost of goods sole (COGS)/Total Sales
Earnings before interest, taxes, depreciation, and amortization (EBITDA) margin formula
earnings before interest, tax, and depreciation/total sales
Profit Margin
Profitability after all expenses have been deducted, expressed as a percentage of revenue (sales)
Profit Margin Formula
Total sales-total costs/total sales
Return on investment (roi)
Profitability ratio for a specific investment, such as a capital expense project. It is usually used to compare options. Threshold for investment is usually above 1.
ROI Formula
Gain from investment-cost of investment/cost of investment
Earnings per share (EPS)
Profitability ratio used by equity holders as a standard expression of earnings
Earnings per share (EPS) formula
Net income/number of outstanding shares
Price to earnings (P/E)
Market value ratio that indicates market confidence in the organization’s ability to maintain or increase earnings.
Price to earnings (P/E) Formula
Stock price per share/earnings per share
Common Nonfinancial Organizational Performance metrics
Share of market, which may signify competitive strength : Reputation among investors, consumers, governments, and political groups : Level of brand awareness among consumers : recognizable employer brand (useful in recruiting and hiring) : Achievements in social responsibility
Performance affected through McKinsey 7-s framework
For an organization to achieve its goals, seven elements must be aligned
7 Elements of McKinsey 7-s Framework
Structure, the way work is divided : Strategy, the plan to improve its competitive position : Systems, the procedures the organization uses to operate : Style, the orientation of leaders and managers: Staff, the way talent is managed and developed : Skills, current competencies : Superordinate goals, the organization’s values or guiding concepts.
Dreaded j curve
HR professionals must understand how changs - both large strategic shifts in culture and goals as well as small changes in structure and processes - can affect employee productivity and engagement.
Reasons why people will consider or try a new way of doing things
Share purpose, reinforcement systems, Skills required for change, Consistent role models
3 General Stages of the Lewin change process
Unfreezing: Gets people to accept that the change will occur, Moving: Gets people to accept the new, desired state, Refreeze the new state: Make the new idea a regular part of the organization.
John Kotter (Leading Change)
Create a sense of urgency, assemble a strong guiding team, provide a clear vision, over-communicate, empower action, ensure short-term successes, sustain progress and build on achievements, institutionalize.
Several ?s you should consider before accepting data in a print or online publication
Does the source have authority? A govt agency: What are the source’s possible biases: Are the sources for data used in a publication clearly cited?: Are the facts relevant?: Is the data current?
Focus group
Is a small group (normally 6 to 12) invited to actively participate in a structured discussion with a facilitator. Often used to follow up on a survey, providing a more in-depth look at specific issues raised during the survey.
When HR professionals plan focus groups they should consider the following
The importance of planning,the context in which a focus group might occur, Importance of the facilitator.
Nominal group technique (NGT)
technique proceeds through rounds in which participants each suggest ideas. The rounds continue until no further ideas are proposed.
Delphi Technique
Technique collects information from a group on a preselected issue. After the coordinator identifies the issue and participants, each participant lists his/her ideas about the issue and returns the list anonymously to the coordinator. No attempt should be made to evaluate or justify the ideas at this stage. Designed to avoid “group think”
Focus Group Advantages
Provides a format that is flexible and relatively comfortable for discussion, Allows for group brainstorming, decision making, and prioritization, can provide group consensus, HR can learn about employee needs, attitudes, and opinions in a direct format, gives employees direct input
Focus Group Challenges
Tends to foster “group think” conformity, may be difficult to control; can become a forum where participants go off on tangents, Generally do not allow for deep discussions due to time constraints and the number of participants, can provide skewed or biased results if participants are not representative,
Challenges with surveys: Obtaining a valid sample
Researchers must make sure that survey results are truly representative - that the number of returned surveys is sufficiently large to be representative and the group responding accurately reflects the attributes of the entire group.
Challenges with surveys: Designing the survey with analysis in mind
Questions should be asked in a way that makes compiling and comparing responses easier.
Challenges with surveys: Asking the right questions
Experts often turn to questions that are based on organizational models that map various internal and external environmental factors that can affect attitudes and work.
Survey/Questionnaire Advantages
Efficient way to gather a lot of data from a large dispersed group: Easier to quantify data for analysis and reporting.
Survey/Questionnaire Challenges
Can be difficult to obtain an acceptable response rate: Difficult to follow up on data from anonymous sources: Relies on self-reporting, which can be biased: requires time and statistical expertise to assess sample and compile and analyze data.
Observation Advantages
Provides firsthand and immediate data rather than self-reported data, which can be affected by memory and selectivity: Time-efficient for subject
Observtion Challenges
Requires skill to be unseen. When the group is very aware of the observer, the data becomes less reliable: Requires vigilance to remove personal bias from observations: Requires experience to note significant behaviors: Observations may not be representative of the entire body of data
Advantages of using existing data
Eliminates the effects of observation and involvement and possible bias of facilitator/interviewer/ observer: Rich, multi-perspective source of data
Challenges of using existing data
Can be time-intensive: Requires experience to extract key data: May require ingenuity to find data
Reliability
Reflects the ability of a data-gathering instrument or tool, such as a survey or a rater’s observation or a physical measurement, to provide results that are consistent.
Errors of Reliability
A failure to maintain the same conditions or correct for differences. For example, giving a cognitive skills test at different times of the day may product difference results: Cultural differences that create different interpretations of questions: Bias in using the tool to gather data
Validity
The ability of an instrument to measure what it is intended to measure. EX: Skills test administered to job applicants must produce valid performance data, which measure skills that are necessary requirements for the job.
Statistical Sampling
Used when the population to be analyzed is very large or when data cannot be obtained from the entire population.
Measurement Bias
Occurs when people consciously or unconsciously evaluate data in an irrational manner.
Types of measurement bias: Stereotyping
Applying to a specific situation generalized opinions about how people of a given gender, race, religion, age, education level, job type, or national origin look, think, act, feel, or respond.
Types of Measurement Bias: Inconsistency
Varying a data-gathering approach or tool so that data is selective rather than representative
Types of Measurement Bias: First-impression error
Allowing a first positive or negative opinion to cloud subsequent evaluation.
Types of Measurement Bias: Negative emphasis
Weighting a small negative reaction (dress) more than it objectively means
Types of Measurement Bias: Halo/horn effect
Allowing one highly valued point to overshadow all other information, either positively (the halo effect), or negatively (the horn effect)
Types of Measurement bias: Nonverbal bias
Placing undue emphasis on unrelated nonverbal cues
Types of Measurement bias: Contrast effect
A tendency to enhance or diminish the strength or credibility of a statement or person based on one’s impression of a preceding statement or person
Types of measurement bias: Similar-to- me error
Judging based on shared (or not shared) personal characteristics.
Cultural Noise
Failure to recognize that an individual is providing answers that the interviewer wants to hear.
Central Tendency
mean (average), median, mode, and quartiles and percentiles
mean (average)
Average score or value
Mean is calculated in two ways
Unweighted average - raw average, gives equal weight to all values, with no regard for other factors.
Weighted average- weighted mean, adds factors to reflect the importance of different values
Median
The middle number in a range of values.
Mode
Most frequently occurring value
Variance Analysis
Difference between planned and actual performance.
Ratio Analysis
Using relationships between data in financial statements to measure the financial health of an organization (current ratio) The ratio that is obtained is compared to a benchmark of performance, (organization’s own previous performance or industry standards)
Trend Analysis
Examines data from different points in time to determine if a variance is an isolated even or if it is part of a longer trend.
Regression Analysis
Statistical method used to determine whether a relationship exists between variables and the strength of the relationship.
Root-cause Analysis
Starts with a result and then works backward. Each cause is analyzed to identify a preceding cause.
Scenario analysis/ what-if analysis
Used to test the possible effects of altering the details of a strategy to see if the likely outcome can be improved.
Pie Chart
Graphically depicts as portions or slices of a circle the constituents that comprise 100% of a data group.
Histrogram
Graphically depicts the sorting of data into groups arranged in the shape of a statistical distribution,showing a central tendency and dispersion around that tendency. Appears as columns of varying heights and lengths.
Trend Diagram
Plots data points on two axes. The horizontal axis usually represents time, while the vertical axis represents volume. Used to test for presence of cycles or developing trends
Pareto Chart
Applies the Pareto principle (80% of effects come from 20% of causes) in the form of a histogram. Categories of data are ranked, usually from left to right along the x axis, according to size. The y axis shows reference ranges (number or % of occurrences).
Scatter Diagram
Plots data points against two variables that form the chart’s x and y axes. The tightness of clustering indicates the probable strength of the correlation.
4 tasks to strategic planning
Formulation, development, implementation, evaluation
Formulation
Leaders gather and analyze internal and external information to determine the organization’s current position and capabilities, opportunities, and constraints.
Development
development of strategic goals and tactics that will optimize success given the environment, opportunities, and constraints - the strategic plan.
Implementation
Process of strategic management - Requires clear communication of objectives to teams, coordination and support of their efforts and control of resources.
Evaluation
Make sure that activities maintain strategic focus and are effective - and at designated intervals to determine the effectiveness of the strategy itself and the need for improvement.
Alignment of effort
Maintain organizational focus on a defined mission and goals. Make sure each unit aligns it’s plan with the organization’s strategic goals.
Control of drift
A phenomenon in which an organization fails to recognize and respond to changes in its environment that necessitate strategic change. Drift is often caused by an organizational culture that is too deeply rooted in the past, in the ways things have always been done.
Focus on core competencies
Core competencies are usually unique advantages an organization possesses, abilities that are integral to creating customer value and are difficult for competitors to imitate.
