Nelson, the HR Director of a Large Organization, Is Concerned

question 10

Multiple Choice

Nelson, the HR Director of a large organization, is concerned about the lack of a large internal pool of talent for middle and upper management jobs. He feels there may be employees with high management potential in lower-level jobs who have not been identified and selected for development. To most accurately identify such employees, Nelson should:

• A) ask employees in middle management to supervise their managers for one fiscal quarter.
• B) review the performance appraisals of employees in upper management.
• C) ask all the employees in middle management to take extensive psychological tests.
• D) establish an assessment center that allows employees to nominate themselves.

---

Definitions:

Price-Earnings Ratios

A valuation ratio of a company's current share price compared to its per-share earnings, used to evaluate if a stock is over or undervalued.

S&P 500 Index

An American stock market index based on the market capitalizations of 500 large companies listed on stock exchanges in the United States.

Operating Leverage

A measure of how sensitive a company's operating income is to a change in revenues, highlighting the impact of fixed versus variable costs.

Profits

The financial gain achieved when the revenue generated from a business activity exceeds the expenses, costs, and taxes needed to sustain the activity.