Unit 1 - Business Mgmnt. Lead. & Strat Flashcards
Which HR costing activity would be ideal if a company wanted to evaluate the cost of a supervisor thoughtlessly criticizing an employee and the employee decided to quit?
Wayne Cascio framework ((44)
In Cascio’s framework, what are the four major cost categories of turnover?
Separation costs; replacement costs; training costs; loss performance (45)
In Cascio’s framework what are examples of separation costs?
Exit interviews, administrative functions, separation pay, and unemployment taxes (45)
In the Cascio framework what do replacement costs include?
Cost of recruiting and hiring a replacement (45)
The cost of orientation and on the job training are representative of what types of costs in the Cascio framework?
Training costs (45)
The difference in performance between the person who leaves and their replacement reflects which cost category in the Cascio framework?
Lost performance (45)
Using HR cost accounting frameworks to evaluate the impact of smoking on an organization can be useful when designing what?
Policies and employee assistance programs (45)
What are key performance indicators (KPI)?
Specific measures of human resource activity that contribute to efficiency and effectiveness of a company (45)
Why would an organization want to use key performance indicators (KPI)?
To provide quantitative measurements that can be used to monitor the events that contribute to long-term success (45)
What is a leading indicator?
A measure that precedes, anticipates, or predicts future performance (45)
In an organization, time to fill is an example of what kind of KPI?
Leading indicator (45)
What is a lagging indicator?
The results of a process or a change, such as sales, profits, and customer service levels (45)
The average number of units produced per employee is an example of what KPI?
Lagging indicator: this measures how well a company is increasing employee productivity (45)
Which KPI reflects bottom line success of a company?
Lagging indicator – executives rely on this to gauge their success (45)
In general, leading indicators are most useful when making what types of decisions?
Managerial decisions: since they predict future performance (45)
Collecting HR metrics and presenting them to managers in a useful format is referred to as what?
HR score card or HR dashboard (45)
HR score card includes what four perspectives?
Strategic, operational, financial, and customer (45-6)
In an HR scorecard this perspective measures progress in achieving major strategic initiatives?
Strategic (45)
In an HR scorecard operational perspective measures what?
Effectiveness of HR processes (45)
On an HR scorecard a financial perspective measures what?
Financial contribution of HR activities (45)
On an HR scorecard measuring how well HR activities serve both internal and External customers is which perspective?
Customer perspective(46)
What is the primary benefit of an HR scorecard?
Allows managers to assess HR’s contribution to strategy implementation and to the bottom line (46)
A useful HR scorecard reinforces the distinction between HR ____ and HR ____ and draws attention to results that HR activities are intended to produce?
Doable’s and deliverables (46)
What is the formula to calculate revenue factor?
Revenue divided by total number of FTE (46)
This metric is often used as a primary measure of effectiveness of a company representing how much revenue is generated by the average FTE?
Revenue factor (46)
What is the formula to calculate revenue per labor costs?
Revenue divided by total labor costs (46)
This metric is recommended as a better measure to track then revenue per FTE, motivating managers to reduce cost rather than FTEs?
Revenue per labor costs (46)
Revenue factor views employees as a capital investment or an expense?
Capital investment (46)
Part-time employees are included in the FTE count proportional to the hours they work
What does the following formula calculate?
[revenue - (operating expense - (compensation cost + benefit cost))] divided by (compensation cost + benefit cost)
Human capital ROI (47)
What does human capital ROI measure?
Return on investment ratio for employees – frequently mentioned as a prime measure for analyzing HR practices (47)
What is the formula for calculating human capital value added?
[revenue - (operating expense - (compensation cost + benefit cost))] divided by total number of FTE (47)
This HR metric is interpreted as the value of the workforce is knowledge, skills, abilities, and performance
Human capital value added (47)
This metric also represents how much value is added to the company from the average employee
Which HR metrics does the following formula calculate?
HR expenses/Total Employees
HR Expense factor
This popular HR metric reflects the average cost of providing human resource services to employees in a company?
HR expense factor (47)
Fun fact: a study found that world-class HR organizations have a 23% lower cost of HR per employee and typical HR organizations
Which HR metric does the following formula calculate?
[(Number of days absent in the month)/(average number of employees during month)x(Number of work days)]x100
Absence rate (47)
What does the HR metric absence rate measure?
The standard measure of absenteeism – this metric can track effects of changes in attendance policies, attendance incentive programs, and other interventions (47)
Which HR metric does the following formula calculate?
[Number of separations during the month/average number of employees during the month]x100
Turnover rate (47)
This HR metric measures the rate that employees leave a company is usually divided into voluntary and involuntary reasons?
Turnover rate (47) - this magic is used to examine potential problems in HR policies
This HR metric measures the costs associated with sourcing, Recruiting, and Staffing activities to fill open positions?
Cost per hire – CPH (47)
What is the formula for calculating cost per hire (CPH)?
(external costs + internal costs) / Number of hires (48)
When calculating cost per hire what are examples of external costs?
All recruiting costs: third-party agency fees, advertising costs, job fair costs, and travel costs (48)
When calculating cost per hire what are examples of internal costs?
Salary and benefits of recruiting team plus fixed costs such as physical infrastructure(48)
What does the following HR metric calculate?
(separation costs + replacement costs + training costs + lost performance)/Number of replacements
Turnover costs per employee (48)
This HR metric represents average cost of replacing an employee who quits or is fired and is significant motivation for examining and improving HR practices that reduce turnover?
Turnover costs per employee (48)
What is the formula for calculating time to fill?
Total days elapsed to fill requisitions/Number hired (48)
What is the purpose of tracking time to fill?
Measures average time required to fill job openings and efficiency of hiring practices (48)
Yeah average time to fill is 42 days
How do you calculate training investment factor?
Total training costs/Headcount (48)
This HR metric represents the training cost per employee?
Training investment factor: changes to this metric should have corresponding changes to other metrics such as reductions in accidents following a safety training (48)
What does the following HR metrics calculate?
Total cost of healthcare/total employees
Healthcare costs per employee (48)
In what instances would healthcare costs per employee be important in communication with employees?
During labor union negotiations.
Generally employees need to know how this metric has changed over time and what they can do individually to reduce it (48-49)
What HR metric does the following formula calculate?
Total employer benefits payments/total gross payroll
Employee benefits as a percent of payroll – sometimes called total benefit cost (49)
What HR metric does the following formula calculate?
(total number of HR FTEs/total number of FTEs in the organization) x 100
HR-to-employee ratio (49)
