Mastering Risk Management for SHRM-CP Exam

A comprehensive set of vocabulary flashcards created for students preparing for the SHRM-CP Exam, focused on risk management concepts.

Risk

The effect of uncertainty on objectives, which can be positive (opportunity) or negative (threat).

Risk Management

Coordinated activities to direct and control an organization with regard to risk.

Risk Position

The organization's desired gain or acceptable loss in value.

Duty of Care

The employer's obligation to ensure employee health, safety, and well-being.

Risk Appetite

A high-level qualitative statement of acceptable risk.

Risk Tolerance

A specific quantifiable range of acceptable deviation from a target.

Moral Hazard

When one party engages in risky behavior knowing another party will bear the consequences.

Principal-Agent Problem

When an agent's personal incentives do not align with the principal's interests.

Conflict of Interest

A situation where an individual or organization has competing interests.

ISO 31000 Risk Management Process

A foundational, continuous, and iterative cycle for strategic risk management.

PAPA Model

A tool for prioritizing risks based on likelihood and speed of change.

Exam Trigger

Look for scenarios involving uncertainty, potential loss, and strategic opportunities.

Key Risk Indicators (KRIs)

Early warning signals indicating increasing risk exposure.

Single Loss Expectancy (SLE)

Expected monetary loss each time a risk occurs, calculated as Asset Value multiplied by Exposure Factor.

Annualized Loss Expectancy (ALE)

Expected monetary loss for an asset over one year, calculated as SLE multiplied by Annualized Rate of Occurrence.

Risk Register

A central log of identified risks including category, owner, and controls.

Business Continuity Plan

Identifies and plans for the continuation of essential HR processes.

Workplace Violence Prevention Policy

A formal policy stating the organization's zero-tolerance stance on violence.

Whistleblower Policy

Establishes a safe channel for reporting violations without retaliation.

Absenteeism

Frequent absence from work, which can signal potential risks like drug use.

Black Swan

Unknown unknowns that can blindside an organization.

Empirical Analysis

Analyzing data to understand risks and make informed decisions.

Strategic Risks

Risks that affect the organization’s ability to achieve objectives.

Operational Risks

Risks that affect how an organization creates value, such as poor leadership.

Hazard Risks

Risks related to potential physical harm to individuals or property.

Decision Rule

Guidelines for making choices based on specific factors in risk management scenarios.