1. An HR manager is asked by a senior manager to select an employee who has been mentored by the senior manager for an open position. This employee was not the manager's first choice for the job. What would be the most useful question for the manager to ask in sorting out the ethical implications of this situation?

A) What will my peers think of me when I change my mind?
B) Is this action fair to everyone involved?
C) Am I sure of my original assessments of the candidates' qualifications?
D) Is this?ÿan ethical or a political question?



2. Which situation best illustrates conflict of interest?

A) Rewarding senior leaders for a company's long-term performance through a granting of stock
B) Opposing viewpoints expressed by the CEO toward a board recommendation of an acquisition
C) Visiting local operations and being given small gifts by plant managers
D) Encouraging a manager to hire the child of the manager's director



3. Refer to the following scenario for the next 3 questions. An HR manager is scheduled to receive a salary merit increase that is significantly above average compared to peers in similar positions. The employee's manager decides?ÿto implement?ÿthe increase but fails to consult?ÿthe corporate compensation function, who reviews?ÿsuch decisions. The increase is effective in the next performance cycle. The manager has not notified the employee. The issue arises during the annual salary merit review and performance appraisal process. All employees are reviewed for possible merit increases in accordance with merit budget guidelines and applicable compensation policy. Each manager is expected to comply with the guidelines before communicating salary increase decisions to employees. Should the merit increase be implemented, it will create a negative salary equity impact based on race, gender, length of service, and scope of responsibilities of other HR managers. In the context of HR policy and practice, this action reflects a poor management decision, lacking the collegial and collaborative behavior expected of senior managers at this level. The senior manager of corporate compensation is a member of the HR leadership team and is responsible for the application of compensation policy. His team identifies this issue and is awaiting instructions on how to proceed. Which immediate step should the senior manager take to address his team's concerns?

A) A. Permit the increase to go through, but inform the employee and the manager that no further salary increases will be approved for the cycle.
B) B. Request an immediate meeting with the responsible manager to discuss the concerns about this decision and explore options to resolve the problem.
C) C. Inform the affected employee that he is ineligible to receive the authorized increase because his manager violated organizational policy and practice.
D) D. Permit the increase to go through, but request that the manager responsible for creating this issue be more careful next time.



4. Which approach should the senior manager take to address the issues of greater consistency and equity in adhering to compensation policies and procedures?

A) A. Review the current policy to determine whether it is clear enough in conveying organizational expectations, and modify it as necessary to ensure consistent compliance.
B) B. Install an automated computer system that monitors significant salary increases compared to budget and notifies corporate compensation to review them prior to implementation.
C) C. Encourage managers to review the policy periodically and consult with corporate compensation before attempting to implement actions that are outside the guidelines.
D) D. Stipulate the compensation policy as a condition of employment in offer letters to all newly hired managers and require signed acceptance.



5. The corporate compensation team oversees the performance appraisal process. Which action should the senior manager take to identify and prevent excessive or inequitable salary increases from occurring in the future?

A) A. Add alternative pay plans for rewarding exemplary performance, such as stock options or performance grants.
B) B. Engage an outside consultant to review the performance appraisal process in order to suggest possible improvements or changes.
C) C. Form a company-wide project committee to evaluate the performance appraisal process and make recommendations for improvements or changes.
D) D. Review proposed salary increases tied to performance appraisals for compliance with guidelines prior to communicating them to employees.