CHAPTER 7—ASCERTAINING HR SUPPLY

MULTIPLE CHOICE

1. Why do organizations prefer to hire an employee from within the organi-

zation rather than from outside the organization?
a. to select candidates with new ideas and skills
b. to stabilize the HR supply with external sources
c. to maintain a ratio of internal to external candidates
d. to reinforce employee loyalty and performance

ANS: D BLM: HIGHER ORDER REF: Page 167

2. What type of probability is associated with an individual’s movement

behaviours in a specific job, given the Markov model?
a. stochastic probability
b. movement probability
c. transitional probability
d. promotion probability

ANS: C BLM: HIGHER ORDER REF: Page 174

3. What is another name for the vacancy model?

a. renewal
b. probabilistic
c. stochastic
d. readiness

ANS: A BLM: REMEMBER REF: Page 181

4. Why is succession planning critical for effective HR planning?

a. It helps to develop employees with new experiences and jobs in case they are laid
off.
b. It helps employees to stay motivated because it promotes them for their perfor-
mance.
c. It helps an organization to stabilize its organizational structures and flexibility.
d. It saves time and money and helps employees to smooth their movement for
external hiring.

ANS: B BLM: HIGHER ORDER REF: Page 168

 5. What type of HR supply planning application relies on a complex
mathematical procedure commonly used for project analysis in engineering and business
applications?
a. Markov modelling
b. vacancy analysis
c. succession table
d. linear programming

ANS: D BLM: HIGHER ORDER REF: Page 173

6. In the Markov model, how many possible movement options does an

employee have?
a. two
b. three
c. four
d. five

ANS: D BLM: REMEMBER REF: Page 174

7. What is the first step in a HR supply analysis?

a. To examine skills and management inventories.
b. To determine the HR demand available.
c. To calculate the ratio of hires to retires.
d. To analyze the external environment.

ANS: A BLM: HIGHER ORDER REF: Page 167

8. What type of model utilizes a series of matrices that detail the various
patterns of movement to and from the various jobs in an organization?
a. recency
b. Markov
c. probabilistic
d. vacancy

ANS: B BLM: HIGHER ORDER REF: Page 174

9. According to the textbook, which of the following is NOT typically

included in a skills inventory?
a. hobbies and interests
b. work history
c. gender
d. education
ANS: C BLM: REMEMBER REF: Page 167

10. If the organization’s goal is to monitor and control absenteeism and

employee turnover, what is another term for this HR strategy called?
a. attrition
b. succession
c. absenteeism
d. retention

ANS: D BLM: HIGHER ORDER REF: Page 185

11. Which of the following is a hard cost associated with replacing workers?
a. lost customer contacts
b. increased turnover
c. lost production
d. orientation and training time

ANS: C BLM: HIGHER ORDER REF: Page 185

12. What is another name for the upward mobility rate?

a. promotion rate
b. adaptation rate
c. retention rate
d. growth rate

ANS: A BLM: HIGHER ORDER REF: Page 183

13. When the Taiwanese Ministry of Communications applied the Markov

model to its maritime shipping companies, it confirmed a labour shortage. Which of the
following groups is NOT included in this labour shortage?
a. chief officers
b. lower-ranking positions
c. deck officers
d. shipping officers

ANS: A BLM: HIGHER ORDER REF: Page 176

14. If you wanted to know the best technique for tracking the number of
individuals who move annually between various job levels in an organization, which one
would you choose?
a. Markov model
b. Delphi technique
c. succession planning
d. ripple effect
ANS: A BLM: HIGHER ORDER REF: Page 174
 15. What is the normal planning time horizon for a movement analysis?
a. one month
b. one quarter
c. one operating cycle
d. one year

ANS: D BLM: REMEMBER REF: Page 177

16. Which of the following has greater predictive capacity than the Markov
model for short-term and long-term periods?
a. succession table
b. vacancy model
c. Delphi technique
d. movement analysis

ANS: B BLM: HIGHER ORDER REF: Page 181

17. Which of the following is NOT included in the additional information

provided in a management inventory?
a. duties
b. deficiencies
c. responsibilities
d. accountabilities

ANS: B BLM: HIGHER ORDER REF: Page 167

18. According to the textbook, which of the following is NOT one of the
options that employees have in the Markov model?
a. termination
b. layoff
c. absenteeism
d. resignation

ANS: C BLM: HIGHER ORDER REF: Page 174

19. If the assumption of linearity does NOT hold, what needs to be done in
linear programming to determine supply requirements?
a. Use probabilistic programming techniques.
b. Use stochastic programming techniques.
c. Use quadratic programming techniques.
d. Use graphic programming techniques.

ANS: C BLM: HIGHER ORDER REF: Page 177

 20. The IBM Global Human Capital Study determined that leadership talent
needed to be built due to a lack of leadership capability in 400 organizations. Which of
the following would NOT result in the development of successful future leaders?
a. Apply stretch assignments and formal education.
b. Determine if an employee has early leadership potential.
c. Analyze leadership talent pools and talent gaps.
d. Use internal talent review process and assessments.

ANS: B BLM: HIGHER ORDER REF: Page 186

21. According to a study cited in the textbook, what is the reason stated by
Deloitte & Touche for why the majority of Canada’s family businesses are facing a
leadership crisis?
a. lack of business planning
b. lack of environmental scanning
c. lack of organizational goals
d. lack of succession planning

ANS: D BLM: REMEMBER REF: Page 171

22. Which of the following is NOT a reason that links succession planning to
effective HR planning?
a. It enables smooth internal employee movement and continuity.
b. It improves employee opportunities for management.
c. It supports new organizational structures and flexibility.
d. It motivates employees and promotes them for performance.

ANS: B BLM: HIGHER ORDER REF: Page 168

23. What is another term for succession analysis?

a. chain effect analysis
b. replacement analysis
c. HR supply analysis
d. movement analysis

ANS: B BLM: REMEMBER REF: Page 168

24. Which country first used worksharing?

a. Germany
b. Japan
c. United States
d. Sweden
ANS: A BLM: REMEMBER REF: Page 187

25. According to the IBM Global Human Capital Study, what is one initiative
for the successful development of leadership?
a. Identify talent pools and talent gaps.
b. Use third parties to assess leadership.
c. Utilize external hires whenever possible.
d. Practice top leadership talent hoarding.

ANS: A BLM: HIGHER ORDER REF: Page 186

26. According to the article “Developing Effective Employee Retention

Policies,” what are two strategies that should typically be included in a retention policy?
a. Form retention task force; and promote from within.
b. Measure turnover; and enforce employee loyalty.
c. Review compensation; and measure job ineffectiveness.
d. Hold line managers responsible; and ensure attrition.

ANS: A BLM: HIGHER ORDER REF: Page 184

27. Which of the following is NOT a condition for worksharing programs in

Canada?
a. The organization must have consent from employees and unions.
b. The organization must be in business for at least two years.
c. The organization must show that the work shortage is temporary.
d. The organization must have at least twenty employees.

ANS: D BLM: HIGHER ORDER REF: Page 187

28. Which of the following is NOT typically a column found in a vacancy

model chart?
a. annual losses
b. promotions to level
c. level inflows
d. internal hiring

ANS: D BLM: REMEMBER REF: Page 183

29. Calculate the promotion rate for Level Four, if 7 individuals in Level
Three were promoted, and the total number of personnel in Level Four is 63? Round to
the nearest whole number.
a. 10 percent
b. 11 percent
c. 12 percent
d. 13 percent

ANS: B BLM: HIGHER ORDER REF: Page 183

 30. What does the term “labour wastage” mean?
a. excessive labour supply
b. productivity inefficiencies
c. absenteeism and turnover
d. high cost labour

ANS: C BLM: HIGHER ORDER REF: Page 185

TRUE/FALSE

1. A skills inventory is an individualized personnel record held on each

employee including those currently in management or professional positions.

ANS: F BLM: REMEMBER REF: Page 167

(excluding management or professionals positions)

2. Succession readiness codes state what the employee’s level of perfor-

mance will be in the future.

ANS: F BLM: REMEMBER REF: Page 170

(level of performance in current job)

3. Many of the methods used to forecast HR demand can also be used to

determine personnel supply.

ANS: T BLM: REMEMBER REF: Page 166

4. In the Markov model, the employee has five possible movement options.

ANS: T BLM: REMEMBER REF: Page 174

5. Linear programming is a complex mathematical procedure commonly

used for project analysis in engineering and business applications.

ANS: T BLM: REMEMBER REF: Page 176

6. Another name for the vacancy model is the renewal model.

ANS: T BLM: REMEMBER REF: Page 181

7. Linear programming is defined as a technique used to analyze personnel

supply specifically the chain or ripple effect that promotions or job losses have on the
movements of other personnel in the organization.

ANS: F BLM: HIGHER ORDER REF: Page 176

(definition for movement analysis)

8. When an individual is transferred or promoted, the resulting changes are

referred to as chain effects.

ANS: T BLM: REMEMBER REF: Page 171

(also known as ripple effects)
 9. The Markov model uses projected patterns of movement between jobs in
the organization.

ANS: F BLM: HIGHER ORDER REF: Page 174

(historical patterns of movement)

10. Until organizations begin to work hard to rebuild trust and mutual
commitment, they will continue to have HR supply and retention problems.

ANS: T BLM: HIGHER ORDER REF: Page 187

11. The upward mobility rate is also known as the promotion rate.

ANS: T BLM: HIGHER ORDER REF: Page 183

12. When an organization is planning on hiring additional employees, the

growth percentage is negative.

ANS: F BLM: HIGHER ORDER REF: Page 183

(positive)

13. Transitional probabilities in the Markov model refer to the likelihood that
an individual in a specific job will exhibit one of five movement behaviours.

ANS: T BLM: REMEMBER REF: Page 174

14. A linear model is an analysis of the flow of personnel throughout the

organization by examining inputs and outputs at each hierarchical or compensation level.

ANS: F BLM: REMEMBER REF: Page 181

(vacancy model)

15. A management inventory is used for professional or technical personnel.

ANS: T BLM: HIGHER ORDER REF: Page 167

16. In the vacancy model, personnel supply requirements are considered for
many levels simultaneously.

ANS: F BLM: HIGHER ORDER REF: Page 181

(one level at a time)
 17. When personnel supply requirements are approached at using a “top-
down” fashion, the level with the highest relevant authority level is the starting point in
the vacancy model.

ANS: T BLM: HIGHER ORDER REF: Page 181

18. The Movement model is a series of matrices that detail the various
patterns of movement to and from the various jobs in the organization

ANS: F BLM: REMEMBER REF: Page 174

(Markov model)

19. A renewal model can also be referred to as a probabilistic or stochastic

model.

ANS: F BLM: HIGHER ORDER REF: Page 174

(Markov model)

20. In the opening vignette entitled “Trends in the Canadian Labour Force,”
the only designated group not mentioned is visible minorities.

ANS: F BLM: HIGHER ORDER REF: Page 166

(disabled persons)

21. Linear programming has similar assumptions to those in regression

analysis.

ANS: T BLM: HIGHER ORDER REF: Page 177

22. In his study of U.S. churches, researcher White referred to the length of a
vacancy chain as its multiplier effect.

ANS: T BLM: HIGHER ORDER REF: Page 175

SHORT ANSWER

1. Although most organizations devote considerable time and resources to

the process of attracting new workers, a great many fall short by not placing enough
emphasis on retaining the high-quality personnel they currently employ. Identify five
specific strategies organizations can employ to help retain existing staff.

ANS:
(5 of the following)

• All managers should be held responsible for the retention of their personnel, and
managerial performance evaluation should incorporate specific measurable goals in
this regard.
• Greater emphasis should be placed on high-performing and high-potential employees
by offering training and development opportunities, special assignments, transfers,
and promotions, etc.
• Form a “retention task force” comprised of HR personnel, line managers, and senior
executives to examine specific practices and programs that can be implemented to
increase retention.
• Reinforce employee loyalty by promoting from within wherever possible.
• Review and address compensation and working conditions before they become issues
for dissatisfaction that prompt employees to leave the organization.
• Measure turnover on an ongoing basis at a corporate, divisional, and local level.

BLM: HIGHER ORDER REF: Pages throughout the chapter

2. Using the Markov model, what are the five possible movements/changes
that an employee can make in an organization?

ANS:
1) Remaining in the current job
2) Promotion to a higher classified job
3) A lateral transfer to a job with a similar classification level
4) Exit from the job
a) termination
b) lay-off
c) voluntary leaving by the employee
5) Demotion

BLM: REMEMBER REF: Page 174

 3. What is succession planning, and what are three of its benefits to
organizations?

ANS:
Succession planning is the process of training and work experience to enable individuals
to assume higher-level job appointments in the future. Some of its benefits include:
• It enables the organization to respond appropriately and stay on track when inevitable
changes occur;
• It provides for continuity and future direction in the midst of significant change;
• It helps develop people as they prepare for new experiences and jobs, and this
development can also help improve their performance in current positions;
• Employees are positively motivated when succession planning takes into account
employees’ performance;
• It supports new organization structures and flexibility by explicitly providing back-up
for various positions, thereby reducing organizational dependency on one employee;
• It saves time and money by having plans in place to enable smooth transition of
employees.

BLM: HIGHER ORDER REF: Pages 168–172

4. What is the difference between a skills inventory and a management

inventory?

ANS:
A skills inventory is an individualized personnel record held on each employee except
those currently in management or professional positions. A typical skills inventory will
include the following:
1) Personal information
a) Name
b) Employee number
c) Job classification
d) Compensation band
e) Emergency notification
f) Telephone number
2) Education, training, and skill competencies
a) Certificates
b) Licences
c) Diplomas
d) Degrees
e) Areas of specialization
f) Dates of attendance
g) Names of institutions
3) Work history
a) Date of hire
 b) Seniority
c) Current job and supervisor
d) Previous jobs held in the company and dates employed
4) Performance ratings
5) Career information – potential future jobs desired by the employee and recommended
by the supervisor
6) Hobbies and interests
a) Community and volunteer associations
b) Interest to relocate

A management inventory is an individualized personnel record for managerial, profes-

sional, or technical personnel that includes all elements in the skills inventory with the
addition of information on specialized duties, responsibilities, and accountabilities.
Management inventories are enhanced skills inventories and typically include the
following information:
1) History of management or professional jobs held
2) Record of management or professional training courses and their dates of completion
3) Key accountabilities for the current job
a) Organizational resources
b) Size of budget controlled
c) Number of subordinates
d) Important organizational outcomes for which the incumbent is responsible
4) Assessment centre and appraisal data
5) Professional and industry association memberships

BLM: REMEMBER HIGHER ORDER REF: Pages 167–168

5. Why do many organizations give preference to internal supply?

ANS:
• Selecting employees for training and development, and subsequent promotion,
enables the organization to reinforce employee loyalty and performance.
• Employees are already socialized to the rules, norms, and procedures of the
organization.
• Employee motivation and commitment to the organization may increase when you
reinforce their past loyalty and performance.
• Employers possess knowledge (e.g., HRMS files) on their performance and
knowledge, skills, and abilities (KSAs) (e.g. work history and experience).

BLM: HIGHER ORDER REF: Page 167