Page 1 of 60
MANAGING HUMAN CAPITAL OBJECTIVE
ASSESSMENT EXAM QUESTIONS AND
VERIFIED ANSWERS () / A+
GRADE
Question 1
The stock of skills, knowledge, and productive knowledge
embodied in an organization’s employees is best defined as:
A) Human resources
B) Human capital
C) Labour supply
D) Competitive advantage
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Answer: B
Rationale: Human capital is precisely the stock of skills and
productive knowledge embodied in human beings. It aligns with
the economic definition provided by human capital theory,
distinguishing it from the broader category of human resources.
Question 2
Which statement best summarizes human capital theory?
A) Individuals and society derive economic benefits from
investments in people, similar to investments in physical
capital.
B) Employees are primarily motivated by job security and
should be managed as a stable workforce.
C) The primary purpose of HR is to ensure compliance with
labour laws.
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D) Human capital is fully mobile and can be transferred
easily between organizations.
Answer: A
Rationale: Human capital theory suggests that individuals and
society derive economic benefits from investments in people (e.g.,
education, training, health). It treats people as assets that can
appreciate in value with investment, much like physical capital.
Question 3
When Human Resource Management (HRM) is strategically
aligned with business goals and embedded in organizational
routines, it becomes a source of:
A) Operational efficiency
B) Sustainable competitive advantage
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C) Increased administrative burden
D) Enhanced employee turnover
Answer: B
Rationale: When HRM is strategically aligned with business
goals, it transforms from a support function into a strategic
partner that can create a unique, difficult-to-imitate source of
sustainable competitive advantage, as highlighted in the SHRM
literature.
Question 4
According to the SHRM model, which of the following is a key
competency area for an HR professional to be successful as a
manager?
A) Financial accounting
MANAGING HUMAN CAPITAL OBJECTIVE
ASSESSMENT EXAM QUESTIONS AND
VERIFIED ANSWERS () / A+
GRADE
Question 1
The stock of skills, knowledge, and productive knowledge
embodied in an organization’s employees is best defined as:
A) Human resources
B) Human capital
C) Labour supply
D) Competitive advantage
,Page 2 of 60
Answer: B
Rationale: Human capital is precisely the stock of skills and
productive knowledge embodied in human beings. It aligns with
the economic definition provided by human capital theory,
distinguishing it from the broader category of human resources.
Question 2
Which statement best summarizes human capital theory?
A) Individuals and society derive economic benefits from
investments in people, similar to investments in physical
capital.
B) Employees are primarily motivated by job security and
should be managed as a stable workforce.
C) The primary purpose of HR is to ensure compliance with
labour laws.
,Page 3 of 60
D) Human capital is fully mobile and can be transferred
easily between organizations.
Answer: A
Rationale: Human capital theory suggests that individuals and
society derive economic benefits from investments in people (e.g.,
education, training, health). It treats people as assets that can
appreciate in value with investment, much like physical capital.
Question 3
When Human Resource Management (HRM) is strategically
aligned with business goals and embedded in organizational
routines, it becomes a source of:
A) Operational efficiency
B) Sustainable competitive advantage
, Page 4 of 60
C) Increased administrative burden
D) Enhanced employee turnover
Answer: B
Rationale: When HRM is strategically aligned with business
goals, it transforms from a support function into a strategic
partner that can create a unique, difficult-to-imitate source of
sustainable competitive advantage, as highlighted in the SHRM
literature.
Question 4
According to the SHRM model, which of the following is a key
competency area for an HR professional to be successful as a
manager?
A) Financial accounting
