Principles of Management Exam Study Guide

Comprehensive practice flashcards formatted as question-and-answer pairs covering Human Resource Management, federal labor regulations, strategic analysis, planning frameworks, and decision-making concepts.

What is Human Resource Management (HRM) and how has its role shifted?

HRM is the function that plans for, finds, hires, trains, rewards, and keeps a company's employees. It has shifted from tactical "personnel" paperwork to a strategic role because people are now seen as a company's biggest source of value.

What four elements are covered in a strategic HR plan (purposeful staffing)?

1. HR administration (handbook and policies), 2. Crafting jobs (using job analysis to write job descriptions), 3. Training and development, and 4. Determining staffing needs (conducting an employee census, determining turnover rate, planning for separated staff, accounting for internal movement, and planning for future growth).

What five numbers are contained within a strategic HR staffing plan?

The current census, estimated transfers and promotions, predicted turnover, budgeted growth, and anticipated skill, knowledge, and expertise needs.

What is the primary distinction between a job analysis and a job description?

A job analysis is a formal evaluation that observes and analyzes basic functions, tasks, equipment, working conditions, and KSAOs across jobs. A job description is a written document specific to one job detailing its summary, assigned responsibilities, and minimum requirements.

What are the three parts of a job description identified in the notes?

1. Job summary (one-paragraph overview used for advertising), 2. Task or assigned responsibilities (identifies functions and communicates performance requirements), and 3. Minimum job requirements (absolute minimum physical, educational, and knowledge skills; used to comply with the ADA).

What do the acronyms KSA and KSAO stand for?

KSA stands for Knowledge, Skills, and Abilities. KSAO adds Other traits (or characteristics).

What is a Bona Fide Occupational Qualification (BFOQ)?

A qualification that is truly necessary to perform the job (such as a minimum physical requirement) and can legally be required even though it screens out certain individuals.

What is job crafting?

An individual employee modifying their own job tasks, which may involve doing work outside the formal description, ignoring assigned tasks, or altering task requirements, with or without supervisor approval.

What are four common job design techniques?

Job rotation (moving between jobs), job enlargement (adding more tasks of the same level), job enrichment (adding more responsibility and control), and job simplification (breaking work into simple steps).

What does the Age Discrimination in Employment Act (ADEA, 1967) mandate?

It prohibits employment discrimination against individuals aged 40 or older and ended federal mandatory retirement.

What does the Americans with Disabilities Act (ADA, 1990) require and what does it NOT do?

It protects disabled and chronically ill individuals from discrimination and requires employers to provide reasonable accommodations. It does not guarantee anyone a job.

What areas are regulated under the Fair Labor Standards Act (FLSA)?

Minimum wage, overtime pay, equal pay, record-keeping, and child labor. It is enforced by the Wage and Hour Division of the Department of Labor.

Which common benefits and workplace practices are NOT required by the FLSA?

Vacation, holiday, severance, or sick pay; meal or rest periods; premium pay for weekend/holiday work; pay raises or fringe benefits; or a discharge notice/reason for firing.

What are the core provisions of the Family and Medical Leave Act (FMLA, 1993)?

It grants eligible employees up to 12 weeks of unpaid, job-protected leave for specific family and medical reasons.

What does the National Labor Relations Act (NLRA) protect?

It protects employees' rights to organize, join labor unions, and bargain collectively; it is enforced by the National Labor Relations Board.

What requirement is imposed by the Worker Adjustment and Retraining Notification Act (WARN)?

It requires larger employers to provide 60 days advance notice before plant closings or mass layoffs.

What classes are protected from discrimination under Title VII of the Civil Rights Act of 1964?

Race, sex, religion, color, and national origin in all employment decisions.

What is the key difference between disparate treatment and adverse impact?

Disparate treatment is intentional discrimination where qualified individuals are treated differently based on a protected trait. Adverse impact is unintentional discrimination where a neutral-looking practice disproportionately harms a protected group.

How is adverse impact mathematically evaluated using the 4/5ths (80%) rule?

Adverse impact may have occurred if the selection rate for a protected group is less than 4/5 ($80\%$) of the selection rate for the dominant group.

What are the three general requirements for a sexual harassment claim?

1. Unwelcome verbal or physical conduct of a sexual nature, 2. The affected individual clearly communicates that the behavior is unacceptable, and 3. The behavior is repeated.

What is the difference between quid pro quo and hostile work environment sexual harassment?

Quid pro quo ("this for that") involves a supervisor or power figure offering a benefit or threatening a penalty in exchange for sexual favors. A hostile work environment involves pervasive, severe, unwelcome sexual conduct that makes the workplace intimidating or offensive.

What are the 10 steps of the textbook hiring process in sequential order?

1. Verify job task, 2. Recruitment, 3. Screening, 4. Information, 5. Job interview, 6. Reference checking and resume verification, 7. Testing, 8. Hiring, 9. Orientation, and 10. Probation.

How does a structured interview differ from a behavioral interview?

A structured interview asks every applicant the same planned questions to minimize bias. A behavioral interview asks about past actions in real situations and is approximately $54\%$ reliable at predicting performance.

What is the rule regarding questions about criminal history during applicant hiring?

An employer can always ask whether an applicant has been convicted of a felony. A misdemeanor conviction may only be inquired about if it directly relates to the job duties.

How do orientation, training, and development differ from one another?

Orientation is the initial training introducing company culture and goals to reduce turnover; training targets distinctive skills or abilities needed for current work; development focuses on long-term career path advancement.

What is the difference between mentoring and coaching?

Mentoring is long-term guidance, support, and professional networking provided by an experienced colleague. Coaching is constructive direction and focused feedback to fix a specific performance issue.

What is a Behavioral Observation Scale (BOS)?

A performance rating tool where the evaluator records the observed frequency of specific, critical job-related behaviors.

How do leniency, strictness, and halo effect review errors occur?

Leniency rates all employees high regardless of performance; strictness rates all employees low; the halo effect occurs when a high rating in one specific trait inflates the ratings across all traits.

What is the difference between procedural justice and distributive justice?

Procedural justice is the perceived fairness of the processes and methods used to allocate rewards. Distributive justice is the perceived fairness of the actual amount of rewards received.

What is 360-degree feedback?

A performance evaluation technique that collects feedback from everyone the employee regularly interacts with (managers, co-workers, subordinates, customers, vendors) to reduce individual evaluator bias.

What is forced ranking?

A performance management system (popularized by Jack Welch at General Electric) where employees are graded against peers to eliminate the bottom $10\%$ of performers and promote the top $10\%$.

What are the four human drives in Four-Drive Theory and how do companies satisfy them?

1. Drive to Acquire (fair pay and recognition systems), 2. Drive to Bond (culture of teamwork and belonging), 3. Drive to Comprehend (meaningful, challenging jobs), and 4. Drive to Defend (fair, transparent policies and job security).

What is the difference between piece-rate pay and commission?

Piece-rate pay compensates workers a set amount per physical unit produced. Commission compensates employees as a percentage of generated sales revenue.

What is broadbanding in compensation?

Consolidating and reducing the number of pay grades by grouping similar job levels and skills together.

What distinguishes progressive discipline from positive discipline?

Both begin with coaching and warnings, but positive discipline replaces standard punitive steps with a paid day off for reflection followed by counseling and contracting.

What are the three Hot Stove rules for administering discipline fairly?

1. Immediate (punishment follows the infraction promptly), 2. Warning (employees receive clear advance notice of expectations and consequences), and 3. Consistent (punishment is applied identically to all offenders).

What is a sustainable competitive advantage and in which four areas must a firm stay ahead to maintain it?

An advantage retained even when rivals attempt to copy or challenge it. A company maintains it by staying ahead in: 1. Responsiveness to customers, 2. Innovation, 3. Quality, and 4. Effectiveness.

What are the primary differences between an organization's vision and its mission?

A vision is broader, aspirational, and answers "Where do we want to be in the future?" A mission is narrower, practical, and answers "What do we do, for whom, and why today?"

Which elements of a SWOT analysis are internal versus external?

Strengths (S) and Weaknesses (W) are internal factors controlled by the firm. Opportunities (O) and Threats (T) are external factors originating from the market, competitors, or environment.

What is Michael Porter's Five Forces model designed to evaluate?

It is used to assess the competitive pressures and overall attractiveness of an entire industry, rather than a single firm.

What are the five forces in Porter's Five Forces framework?

1. Threat of new entrants, 2. Bargaining power of suppliers, 3. Bargaining power of buyers, 4. Threat of substitute products or services, and 5. Character/intensity of rivalry among existing firms.

What are the three grand strategies in strategic management?

Growth (expansion in markets, products, or headcount), Stability (maintaining current course and size), and Retrenchment (reducing operations and sticking to core competencies).

What are Porter's three positioning strategies?

1. Cost leadership (being the lowest-cost producer), 2. Differentiation (offering unique, superior value customers pay extra for), and 3. Focus or niche (serving a narrow target segment extremely well).

How does the BCG Matrix classify business units?

By market growth rate and relative market share into four categories: Stars (high growth, high share), Cash Cows (low growth, high share), Question Marks (high growth, low share), and Dogs (low growth, low share).

What are the planning horizons for strategic, tactical, and operational planning?

Strategic planning is long-term ($5\text{ years}$ in lecture notes), tactical planning is medium-term (one to a few years), and operational planning is short-term (up to about one year).

What are the distinct differences between a policy, a procedure, and a rule?

A policy is a broad corporate-wide guideline; a procedure is a routine sequence of steps for handling an activity (SOP); a rule is a specific required course of conduct with explicit penalties for noncompliance.

What is Management by Objectives (MBO) and who establishes the goals?

A structured planning and goal-setting process to boost productivity where goals are mutually negotiated and agreed upon by managers and employees together, rather than imposed top-down.

What is the concept of "the tyranny of the present" in scenario planning?

The psychological tendency to be heavily constrained by current social influences and assumptions, making it difficult to envision alternative future possibilities.

What is the difference between a programmed and a non-programmed decision?

Programmed decisions are repetitive, routine choices made using established policies and rules (e.g., inventory reorders). Non-programmed decisions are novel, infrequent choices requiring judgment, intuition, and tolerance for ambiguity (e.g., entering new markets).

What are the six steps of the rational decision-making process?

1. Identify and diagnose the real problem, 2. Develop creative alternatives, 3. Evaluate alternative solutions, 4. Choose one alternative solution, 5. Implement the solution, and 6. Evaluate and control.

How do the classical and administrative models of decision making differ?

The classical model is normative (how managers should make ideal, rational, economic choices). The administrative model is descriptive (how managers actually decide under conditions of uncertainty, bounded rationality, and satisficing).

What is Herbert Simon's concept of bounded rationality and satisficing?

Bounded rationality acknowledges that human cognitive limits and time prevent finding the optimal choice. Satisficing is selecting the first alternative that is "good enough" and meets basic requirements.

What is the distinction between sunk-cost bias and escalation of commitment?

Sunk-cost bias is justifying continuing a project because of money already spent. Escalation of commitment focuses on continuing or increasing investment because of time spent and perceived worth despite bad news.

What is anchoring bias in decision making?

The cognitive bias where an individual relies too heavily on the initial piece of information received (e.g., the first price quoted) to make subsequent judgments.

What does each letter represent in the A-B-C-D-E model of irrational thinking?

A = Activating event (what happened), B = Belief system (what was thought), C = Emotional consequence (what was felt), D = Disputing (challenging irrational thoughts), and E = New emotional consequence (helpful, rational thoughts).

What are the four basic irrational thinking processes identified in class notes?

Demandingness (inflexible rules/"musts"), awfulizing (viewing things as catastrophic), human worth ratings (labeling global self-worth based on actions), and low frustration tolerance (believing one cannot endure discomfort).